In In re Spirits International, N.V., 2009 LEXIS U.S. App. 9413 (Fed. Cir. April 29, 2009), the Federal Circuit reviewed a decision of the Trademark Trial and Appeal Board (“TTAB”) in connection with the registration of the mark MOSKOVSKAYA for vodka. In reversing the decision of the TTAB and remanding the case for further proceedings, the Federal Circuit concluded that when evaluating whether a mark is geographically deceptively misdescriptive, the proper inquiry should be whether a significant portion of the relevant consuming would be deceived in connection with their decision to purchase the product or service sold under the mark.

Spirits International involved an intent-to-use application to register the mark MOSKOVSKAYA for vodka. The Trademark Examining Attorney had refused registration of the mark on the ground that the mark – which the Examining Attorney, applying the doctrine of foreign equivalents, concluded roughly translates to “of or from Moscow” – was primarily geographically misdescriptive under 15 U.S.C. §1052(e)(3), Lanham Act Section 2(e). The Examining Attorney’s reasoning was that Moscow was a well-known city; that there was a goods/place association between vodka and Moscow such that the public was likely to believe that the goods were from Moscow; and that such a belief would be “material” to a decision to a consumer’s decision to purchase the vodka. Because the applicant admitted that the vodka to be sold under the mark would “not be manufactured, produced or sold in Moscow and [would] not have any other connection with Moscow”, the Examining Attorney concluded that the mark met the criteria for being geographically misdescriptive, and thus refused registration. On appeal from the refusal to register, the TTAB agreed with the Examining Attorney and held that there is a “presumption that a word in one of the common, modern languages of the world will be spoken or understood by an appreciable number of U.S. consumers for the product or service at issue.” As such, and in view of evidence showing that based on the 2000 Census Russian is spoken by more than 700,000 people in the United States, the TTAB found that the Examining Attorney had made a prima facie showing of deception under 15 U.S.C. §1052(e)(3), which Applicant had not rebutted.

On appeal, the Federal Circuit began its analysis by explaining that sub-section (e)(3) of 15 U.S.C. §1052 was added to the statute in connection with the NAFTA amendments of 1993, and that the subsection prohibits the Trademark Office from registering a mark in connection with goods if that mark is “primarily geographically deceptively misdescriptive” of such goods. The court further explained that the “deceptiveness” must be material, and held that “the appropriate inquiry for materiality purposes is whether a substantial portion of the relevant consumers is likely to be deceived, not whether any absolute number or particular segment of the relevant consumers (such as foreign language speakers) is likely to be deceived.”

In an effort to better understand the origin of the materiality requirement for geographic misdescriptiveness, the court examined it in light of the materiality requirement of 15 U.S.C. §1052(a) (barring registration of marks that are immoral, deceptive or scandalous), the requirement under the false advertising section of the Lanham Act, and the requirement under the common law. The court concluded that consistent will each of those areas of the law, the materiality requirement in the deceptively misdescriptive context should also be one that affects a significant portion of the relevant consuming public. As to the composition of the “relevant consuming public”, the court held that it would often be the entire U.S. population interested in purchasing a particular product or service. Nonetheless, the court recognized that there may be situations where the use of a non-English mark is evidence that the product sold under the mark is targeted to a community composed of consumers who understand the particular foreign language. In those cases, however, the court explained that “the relevant consuming public will be composed of those who are members of that targeted community, and, as a result, people who speak the non-English language could comprise a substantial portion of the relevant consumers.”

Turning to the facts of the case at hand, the Federal Circuit concluded that by not considering whether Russian speakers composed a “substantial portion of the intended audience” for vodka purchasers, the Board mis-applied the materiality test. Instead of assessing whether a substantial portion of vodka purchasers were Russian speakers, the TTAB focused on the fact that Russian is a “common modern language” and that more than 700,000 people in the U.S. speak or understand that language. Although the Federal Circuit specifically stated that it was “express[ing] no opinion on the ultimate question of whether a substantial portion of the intended audience would be materially deceived”, it did point out that if only about 700,000 people, or .25%, of the U.S. population speaks Russian, and thus “if only one quarter of one percent of the relevant consumers was deceived”, the this would not be a substantial portion. The Federal Circuit thus vacated the decision of the TTAB and remanded the case for further consideration in light of the appropriate materiality test.

For applicants seeking to register foreign words as U.S. trademarks it is important to understand that whether a mark is likely to be considered geographically misdescriptive is in large part going to be based upon whether the word, when viewed by the universe of appropriate U.S. consumers, is likely to be considered deceptive by a large proportion of the relevant consumer population. If a foreign word is used in connection with goods directed to a relatively small target audience, then the fact that a large number of those consumers would likely be deceived could lead to an appropriate refusal to register under 15 U.S.C. §1052(e)(3). On the other hand, a different result is likely to arise in a situation where the same number of potentially deceived consumers makes up a smaller proportion of the relevant consumer population.