Princeton Vanguard, LLC v. Frito-Lay N. Am., Inc.

Decision Date15 May 2015
Docket NumberNo. 2014–1517.,2014–1517.
Citation114 U.S.P.Q.2d 1827,786 F.3d 960
PartiesPRINCETON VANGUARD, LLC, Appellant v. FRITO–LAY NORTH AMERICA, INC., Appellee.
CourtU.S. Court of Appeals — Federal Circuit

David Hal Bernstein, Debevoise & Plimpton LLP, New York, N.Y., argued for appellant. Also represented by Jeremy N. Klatell, Lauren E. Kapsky.

William G. Barber, Pirkey Barber LLP, Austin, TX, argued for appellee. Also represented by Paul Joseph Thomas Madrid.

John W. Crittenden, Cooley LLP, San Francisco, CA, for amicus curiae Counsel of American Survey Research Organizations Incorporated. Also represented by Vincent James Badolato, Morgan Ayn Champion, Washington, DC.

Before LOURIE, O'MALLEY, and REYNA, Circuit Judges.

Opinion

O'MALLEY, Circuit Judge.

Princeton Vanguard, LLC (Princeton Vanguard) appeals from the final decision of the Trademark Trial and Appeal Board (“the Board”) cancelling its registration of the mark PRETZEL CRISPS for pretzel crackers on the Supplemental Register and denying its application to register PRETZEL CRISPS on the Principal Register. Frito–Lay N. Am., Inc. v. Princeton Vanguard, LLC, 109 U.S.P.Q.2d 1949 (T.T.A.B. Feb. 28, 2014) (“Board Decision ”). Because the Board applied the incorrect legal standard in evaluating whether the mark is generic, we vacate and remand for further proceedings.

Background

On April 21, 2004, Princeton Vanguard filed U.S. Trademark Application Serial No. 78/405,596, seeking to register PRETZEL CRISPS in standard character format for “pretzels” on an intent-to-use basis under § 1(b) of the Lanham Act, 15 U.S.C. § 1051. The trademark examining attorney refused registration on the Principal Register on grounds that the proposed mark was merely descriptive under 15 U.S.C. § 1052(e)(1). In response, Princeton Vanguard: (1) amended its identification of goods from “pretzels” to “pretzel crackers;” (2) disclaimed the exclusive right to use the term “pretzel” apart from the mark as a whole; and (3) requested registration on the Supplemental Register. Board Decision, 109 U.S.P.Q.2d at 1950 & n. 1. Princeton Vanguard subsequently obtained Registration No. 2,980,303 for the PRETZEL CRISPS mark on the Supplemental Register.

Several years later, Princeton Vanguard filed U.S. Trademark Application Serial No. 76/700,802, seeking to register PRETZEL CRISPS in standard character format for “pretzel crackers” on the Principal Register. In its application, Princeton Vanguard identified October 6, 2004 as its first use of the mark in commerce, disclaimed the exclusive right to use the term “pretzel” apart from the mark as shown, and claimed acquired distinctiveness in the mark as a whole. Id. at 1950 n. 2.

On July 2, 2010, Frito–Lay North America, Inc. (Frito–Lay) filed a notice of opposition to Princeton Vanguard's Application Serial No. 76/700,802 to register PRETZEL CRISPS on the Principal Register. In its opposition, Frito–Lay argued that the term PRETZEL CRISPS is generic for pretzel crackers and thus is not registrable. In the alternative, Frito–Lay asserted that PRETZEL CRISPS is highly descriptive of a type of cracker product and has not acquired distinctiveness. Id. at 1950. Frito–Lay subsequently filed a petition to cancel Supplemental Registration No. 2,980,303 on the same grounds. The petition for cancellation was consolidated with the opposition proceeding and both parties filed motions for summary judgment.

In denying Frito–Lay's motion for summary judgment that the mark is generic, the Board found that Princeton Vanguard's submissions, including survey evidence and news articles, “give[ ] rise to a genuine dispute regarding the element of whether the public understands ‘pretzel crisps' as the generic wording for pretzel crackers, or as designating applicant as the source of pretzel cracker products bearing the mark.” Frito–Lay N. Am., Inc. v. Princeton Vanguard, LLC, Opp'n Nos. 91190246 & 91195552, Canc'n No. 92053001, slip op. at 8 (T.T.A.B. Feb. 9, 2011). The Board likewise denied Princeton Vanguard's later motion for summary judgment, finding a genuine dispute as to whether the mark is generic for pretzel crackers and whether it has acquired distinctiveness. Frito–Lay N. Am., Inc. v. Princeton Vanguard, LLC, Opp'n No. 91195552, Canc'n No. 92053001, slip op. at 3–4 (T.T.A.B. Sept. 5, 2012). The parties agreed to proceed to trial on the summary judgment record, as well as supplemental expert declarations. That record included, among other things, testimony in the form of declarations with attached exhibits, media references, third party use in the food industry, use by the parties themselves, and expert survey evidence. Board Decision, 109 U.S.P.Q.2d at 1951. Both parties filed trial briefs and, pursuant to Princeton Vanguard's request, the Board conducted oral argument.

On February 28, 2014, the Board sustained Frito–Lay's opposition to Princeton Vanguard's application and granted its petition for cancellation. Id. at 1960.1 At the outset, the Board found that “pretzel crisps” is a compound term, not a phrase, and analyzed the terms individually. Id. at 1953 (noting that “compound words that do not add new meaning may be analyzed by their constituent terms”). Specifically, the Board found that the term “pretzel” in PRETZEL CRISPS is generic for pretzels and pretzel snacks, and the term “crisps” is generic for crackers. In reaching this conclusion, the Board cited: (1) media references and third-party use of the term “crisps” to identify crackers; (2) registrations disclaiming the term “crisps”; (3) dictionary definitions of the word “crisp”; (4) Princeton Vanguard's admission that its packages for its PRETZEL CRISPS products provide nutritional facts for a serving size of a stated number of “crisps”; (5) a few generic references to the combined term “pretzel crisps;” and (6) the surveys of two of the parties' experts: Dr. Alex Simonson for Frito–Lay and Dr. E. Deborah Jay for Princeton Vanguard.

Dr. Simonson's survey found that 41% of respondents thought PRETZEL CRISPS was a brand name, 41% thought it was a category name, and 18% answered “don't know” or “not sure.” Id. at 1957. Dr. Jay noted several problems with Dr. Simonson's methodology, including that “the universe of survey participants was underinclusive,” the two options of giving no opinion—“don't know” and “not sure”—may have caused confusion, and Dr. Simonson failed to conduct a “mini-test” to determine whether participants understood the difference between brand names and category (generic) names. Id. at 1957–58. The Board agreed with Dr. Jay's criticisms of Dr. Simonson's survey, and thus gave Frito Lay's survey little probative weight. As to Dr. Jay's survey—which found that 55% of respondents thought that PRETZEL CRISPS was a brand name, while 36% thought it was a common or generic name—the Board noted Dr. Simonson's objection to the screening criteria, but did not adopt it. Id. at 1958.

The Board indicated that it considered the entire record, including the surveys, but gave “controlling weight to the dictionary definitions, evidence of use by the public, including use by the media and by third-parties in the food industry, and evidence of use by defendant itself.” Id. at 1960. On this record, the Board found “PRETZEL CRISPS” is generic for “pretzel crackers.” Id. The Board explained that its conclusion would be the same if it had analyzed PRETZEL CRISPS as a phrase instead of a compound term, because “the words strung together as a unified phrase also create a meaning that we find to be understood by the relevant public as generic for ‘pretzel crackers.’ Id. Given the Board's finding of genericness, it did not address whether the term PRETZEL CRISPS, when used in connection with pretzel crackers, has acquired distinctiveness. Id. at 1960 n. 13.

Princeton Vanguard timely appealed to this court. We have jurisdiction pursuant to 28 U.S.C. § 1295(a)(4)(B).

Discussion

We review the Board's legal conclusions de novo and its factual findings for substantial evidence. In re Pacer Tech., 338 F.3d 1348, 1349 (Fed.Cir.2003). Whether the Board applied the correct legal standard in assessing the mark is a question of law we review de novo. See In re Dial–A–Mattress Operating Corp., 240 F.3d 1341, 1345 (Fed.Cir.2001). Whether an asserted mark is generic is a question of fact. In re Hotels.com, LP, 573 F.3d 1300, 1301 (Fed.Cir.2009). Accordingly, [o]n appellate review of the Board's factual finding of genericness, we determine whether, on the entirety of the record, there was substantial evidence to support the determination.” Id. at 1302. Substantial evidence requires “more than a mere scintilla” and is ‘such relevant evidence as a reasonable mind would accept as adequate’ to support a conclusion.” Pacer Tech., 338 F.3d at 1349 (quoting Consol. Edison v. NLRB, 305 U.S. 197, 229, 59 S.Ct. 206, 83 L.Ed. 126 (1938) ).

On appeal, Princeton Vanguard argues that the Board erred in its genericness analysis when it assessed the PRETZEL CRISPS mark as a compound term instead of a phrase. Specifically, Princeton Vanguard contends that the Board “took the short-cut of analyzing whether the words ‘pretzel’ and ‘crisps' are each generic for a pretzel and a cracker, and then it merely assumed the public would understand the combined mark PRETZEL CRISPS to be generic for ‘pretzel crackers' without due consideration of the actual evidence of record.” Appellant Br. 9. According to Princeton Vanguard, by focusing solely on the mark's constituent parts, the Board: (1) deviated from this court's precedent, which requires consideration of the mark it its entirety; and (2) failed to consider the evidence of record, which shows that the purchasing public understands the term PRETZEL CRISPS to be a brand name.

For the reasons explained below, we agree with Princeton Vanguard that the Board applied the incorrect legal standard when it failed to consider the relevant public's understanding of the PRETZEL CRISPS mark in its entirety.

A. The Board Applied...

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