In an eight-page opinion, the CAFC upheld the TTAB's decision in In re North Carolina Lottery, Serial No. 86411401 (July 12, 2016) [TTABlogged here], finding the mark FIRST TUESDAY to be merely descriptive of "lottery cards; scratch cars for playing lottery games" and of "lottery services." The court ruled that the Board did not err in considering the explanatory text appearing on applicant's specimens of use (see below) in determining the issue of descriptiveness. In re North Carolina Lottery, Appeal No. 2016-2558 (Fed Cir. August 10, 2017) [precedential].
North Carolina's specimens of use included explanatory text such as "[n]ew scratch-offs the first Tuesday of every month." The examining attorney found that, in the context of applicant's promotional materials, the mark "merely describes a feature of [its] goods and services, namely, new versions of the goods and services are offered the first Tuesday of every month." The Board agreed, concluding that "[n]o mental thought or multi-step reasoning is required to reach a conclusion as to the nature of the involved goods and services."
North Carolina argued that that the Board's reliance on the explanatory text of the specimens to supplement the meaning of the mark was improper, and that the inquiry should be limited to what a consumer with "only general knowledge" of the goods and services, and without additional context from the explanatory text, would immediately understand the mark to mean. Accordingly, the applicant maintained, the mark is merely suggestive because nothing in the mark itself conveys the understanding that the USPTO assigns to the mark, and therefore some imagination is needed to connect the mark to the goods and services.
North Carolina conceded that the USPTO is allowed to consider the specimens of use to discern how a mark is used, but it argued that explanatory text on the specimens cannot supply additional meaning when the mark itself does not convey that meaning." When pressed, North Carolina "had difficulty articulating the significance of the explanatory text in this case if not to serve as evidence of the significance of FIRST TUESDAY in the commercial context." The court declined to "carve out" explanatory text from the USPTO's consideration of the commercial context in which a mark is used.
That is not to say, however, that the use of explanatory text with a mark necessarily renders that mark merely descriptive. “Placement of a term on the continuum [of distinctiveness] is a question of fact.” In re Dial-A-Mattress Operating Corp., 240 F.3d 1341, 1344 (Fed. Cir. 2001). The distinctiveness of a mark in the context of explanatory text remains a case-specific analysis. As a legal matter, however, the TTAB did not err by considering the explanatory text of the specimens in the descriptiveness inquiry.
North Carolina further argued that the fact that it had to explain the meaning of the mark showed that the mark is not descriptive. The court, distinguishing several decisions from other circuits, found that the connection between the explanatory text, the mark, and the goods/services was not complicated: "That text simply uses the same two words as the mark—'first Tuesday'—along with words like 'new' and 'every month' to describe the relevant feature or characteristic of N.C. Lottery’s scratch-off lottery games."
The commercial context here demonstrates that a consumer would immediately understand the intended meaning of FIRST TUESDAY. In other words, the evidence shows that the mark is less an identifier of the source of goods or services and more a description of a feature or characteristic of those goods or services. Substantial evidence therefore supports the TTAB’s finding that FIRST TUESDAY is a merely descriptive mark.
And so the CAFC affirmed the Board's decision.