Consumer protection concerns about the increasing practice of making misleading or false claims that a product or service is eco-friendly is now subjecting brand owners to heightened scrutiny when seeking to register trademarks that contain the term “green.” This so-called “greenwashing” has grown rapidly in light of marketers’ desire to capitalize on increased consumer demand for environmentally friendly products. In response to the propagation of such misleading claims, the Federal Trade Commission and the Trademark Trial and Appeal Board have taken stronger stances against greenwashing, and recent U.S. Supreme Court jurisprudence has given non-competitors standing to bring a Lanham Act claim. The climate is changing around “green” trademarks, and it is important for brand owners to understand the potential implications of trademarks that have environmentally friendly connotations.
Potential Hurdles at PTO
In light of the dramatic increase in “green” marks filed, and as environmental claims have been subject to closer examination, “green” trademarks face several potential hurdles in the trademark prosecution process. In 1992, when the FTC first released its advisory Green Guides, roughly 200 “green” trademark applications were filed with the U.S. Patent and Trademark Office. Now, as of September 2014, the USPTO’s trademark database contains over 10,000 active applications and registrations for “green” trademarks.
A “green” trademark may be refused registration for several reasons, including descriptiveness or, increasingly, deceptiveness absent an express statement that the associated product or service is eco-friendly.
A refusal to grant registration on descriptiveness grounds will issue when a mark merely “describes an ingredient, quality, characteristic, function, feature, purpose, or use of the specified goods or services.”1 Where the identification of goods or services identifies a product as eco-friendly or environmentally friendly, it is unsurprising that the PTO would find the mark to be descriptive.
The PTO has refused to register numerous “green” marks; examples include ALLERGY GREEN, deemed to be descriptive of bedding,2 and GREEN-KEY found to be generic for paper key cards “[i]n view of the worldwide emergence of environmentally friendly or “green” products.”3 In fact, prior to the issuance of the most recent Green Guides, some applicants were advised to remove claims of eco-friendliness from trademark applications to avoid descriptiveness refusals, because “[t]he PTO does not require that such claims be included in a description of goods and services and its determination regarding whether a mark is descriptive focuses on the manner in which the goods or services are described in the application for registration.”4
More recently, a trend has emerged to refuse registration to “green” trademarks on the basis of deceptiveness. While the PTO has not formally issued policy statements on greenwashing, applicants and practitioners have noticed an increase in deceptiveness refusals of “green” trademarks, particularly following the release of the FTC’s updated Green Guides in 2012.5 Unlike descriptive marks, which may be registered with a showing of acquired distinctiveness, deceptive marks are barred from registration even where public association of the mark with a single source is proven.
According to the U.S. Court of Appeals for the Federal Circuit, a mark is deceptive if: (1) the term misdescribes the character, quality, function, composition or use of the goods; (2) prospective purchasers are likely to believe that the misdescription actually describes the goods; and (3) the misdescription is likely to affect a significant portion of the relevant consumers’ decision to purchase.6 In support of its deceptiveness refusals, the TTAB has asserted that the term “green” is used so widely and consistently in certain areas of the marketplace that consumers have become conditioned to believe that “green” identifies environmentally friendly products or services.7 For a “green” mark to overcome a deceptiveness refusal, the PTO has recommended that applicants expressly identify products or services associated with “green” trademarks as environmentally friendly. However, such an amendment must be made with caution, as it could open the door to a subsequent descriptiveness refusal from the PTO, and possibly a demand for substantiation by the FTC, a competitor, or now, any entity with Lanham Act standing pursuant to the Supreme Court’s 2014 Lexmark decision.
The FTC’s Green Guides
The FTC’s Green Guides, officially titled Guides For The Use Of Environmental Marketing Claims, were first issued in 1992. Since their initial release, the guides were revised and updated in 1996, 1998, and most recently, in 2012, after five years of commentary. The purpose of these guidelines is to provide information on how to avoid making environmental claims that would be unfair and deceptive under Section 5 of the FTC Act. According to the FTC, the Guides “outlin[e] general principles that apply to all environmental marketing claims and provid[e] specific guidance about how reasonable consumers are likely to interpret particular claims, how marketers can substantiate them, and how they can qualify those claims to avoid consumer deception.”8
The FTC’s Green Guides apply to explicit and implicit claims on marketing materials for products, services, and all types of product packaging. The Green Guides apply broadly, but, among the enumerated categories, specifically identify “words, symbols, logos, depictions, [and] product brand names” as potential subjects of greenwashing scrutiny.9 Even if the product or service to be sold under the mark is not intended to be environmentally friendly, marketers must be aware of “all reasonable interpretations” of their brand.
While the Green Guides do not constitute law or federal regulation, they are frequently invoked in the FTC’s enforcement actions, and comprise a key element of its “ongoing crackdown on false and misleading environmental claims.”10
Additionally, the National Advertising Division (NAD), a self-regulatory body in the advertising industry, uses the Green Guides in evaluating disputes between competitors regarding contested environmental claims. As such, before making use of a “green” trademark, brand owners must be aware of any potential environmental implications of their mark, and be prepared to provide substantiation for any environmental claims.
Lanham Act and ‘Lexmark’
Additionally, in light of recent Supreme Court jurisprudence, entities seeking to use a “green” trademark face potential Lanham Act liability from a wider range of opposers. The Lanham Act prohibits advertising that “misrepresents the nature, characteristics, qualities, or geographic origin of…goods, services, or commercial activities.”11 While Section 43(a) has typically only provided a means for competitors to bring claims of false and misleading advertising, the Supreme Court recently broadened the statute’s standing requirements.
In March 2014, the Supreme Court handed down its decision in Lexmark International v. Static Control Components, unanimously holding that a party may have standing to bring suit for false advertising under 15 U.S.C. §1125(a) even if that party and the accused are not direct competitors. In Lexmark, Static Control had brought claims challenging Lexmark’s environmental marketing language, which were dismissed by the district court for lack of standing. Now, to have standing under the statute, a party must plead only “an injury to a commercial interest in reputation or sales” and show that the alleged injury flows “directly from the deception wrought by the defendant’s advertising.” AfterLexmark, even non-competitors may question the veracity of environmental claims—including trademarks—in federal court.
The climate for registering “green” marks has changed dramatically over the past several years, and will continue to evolve in light of stricter enforcement of advertising regulations. Although there are numerous commercial and environmental benefits stemming from eco-friendly products and services, marketers must be careful to ensure that environmental claims and marks are factually accurate and not misleading.