The U.S. Court of Appeals for the Federal Circuit affirmed the TTAB's ruling in In re Cordua Restaurants LP, 110 USPQ2d 1227 (TTAB 2014) [precedential] [TTABlogged here], finding the term CHURRASCOS, in the stylized from shown below, to be generic for restaurant services. The fact that Applicant Cordua owns a registration for the mark CHURRASCOS in standard character form for the same services ("restaurant and bar services; catering") was irrelevant because each trademark application must be examined on its own merits. In re Cordua Restaurants, Inc., Appeal No. 2015-1432 (May 13, 2016) [precedential].
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The question of whether a term is generic is a question of fact. The CAFC applies the "substantial evidence" standard in reviewing the TTAB's determination.
The court first pointed out that Cordua's ownership of a registration for the CHURRASCOS word mark did not preclude a finding of genericness for the stylized version of the mark. Cordua argued that the Board should have fully considered its "intcontestable registration," but the court observed that a mark's incontestability under Section 14 is not a shield against genericness. Section 14 states that a registered mark that has become generic may be cancelled at any time.
In any event, this proceeding does not involve the earlier registration, and the Section 7(b) presumption of validity of that registration does not carry over to the new application for registration of a different mark. The Board must evaluate the present record to determine whether the stylized mark is ineligible for registration, and the USPTO must establish genericness by clear evidence. The Board applied that standard here.
The court noted that the Board's genericness analysis addressed Cordua's own restaurant services (stating that "'Churrasco' steak is clearly one of the primary items applicant's CHURRASCOS restaurants serve"). However, that error was harmless, because the Board properly determined that the involved genus of services was "restaurant services," and Cordua agreed with that determination.
The question, then, was whether "churrascos" is generic for restaurant services generally. The Board's findings that "churrascos" is a generic term for a type of grilled meat, and that "churrascos" is a generic term for a restaurant featuring churrasco steaks, was supported by substantial evidence.
Cordua maintained that "churrascos" refers to a style of grilling meat and not to restaurant services, but the court observed "[i]f the relevant public would understand a term denoting a specialty dish to refer to a key aspect of restaurant services, then the term is generic for restaurant services." Substantial evidence supported the finding that "churrascos" refers to a "key aspect" of a class of restaurants because those restaurants are commonly referred to as "churrasco restaurants." The Board found no error in the Board's conclusion that "there is a class of restaurants that have churrascos as a centeral focus of their services, and both competitors in the field and consumers use the term 'Churrasco" to refer to this type of restaurant."
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Cordua contended that even if "churrascos" is generic as to "churrasco restaurants" (also known as "churrascarias"), it is not generic for all restaurant services. However, a term is generic if relevant consumers understand the term to refer to part of the claimed genus, even if the public does not understand the term to refer to the broad genus as a whole. For example, "pizzeria" is generic for restaurant services, even though it refers only to a sub-group or type of restaurant rather than to all restaurants.
[R]egistration of the stylized form of CHURRASCOS on the Principal Register would give Cordua rights that it could enforce against all others providing restaurant services, including operators of traditional Latin American churrascarias (churrasco restaurants) that specialize in meat grilled in the churrasco style
And so the CAFC held that the TTAB did not err in its decision.
TTABlog comment: In footnote 2 of its opinion, the CAFC dismissed the notion that the USPTO's determination that the CHURRASCOS word mark was eligible for registration is binding in this case as a matter of issue preclusion under B&B Hardware. The CAFC found no suggestion in B&B Hardware that an examining attorney's decision to register or refuse to register a mark satisfies the traditional requirements of issue preclusion. See Restatement (Second) of Judgments Sec. 27 (1982) (requiring that an issue be "actually litigated" between parties for issue preclusion to apply).