In re Mbna America Bank, N.A.

• Decision Date: 15 August 2003
• Docket Number: No. 02-1558.,No. 74/538.,No. 74/908.,No. 74/472.,No. 74/417.,02-1558.,74/472.,74/417.,74/908.,74/538.
• Citation: 340 F.3d 1328
• Parties: In re MBNA AMERICA BANK, N.A.
• Court: U.S. Court of Appeals — Federal Circuit

340 F.3d 1328

In re MBNA AMERICA BANK, N.A.

No. 02-1558.

No. 74/472.

No. 74/417.

No. 74/908.

No. 74/538.

United States Court of Appeals, Federal Circuit.

Decided August 15, 2003.

COPYRIGHT MATERIAL OMITTED

Michael A. Grow, Arent, Fox Kintner Plotkin & Kahn, PLLC, of Washington, DC, argued for appellant. With him on the brief was Evan S. Stolove.

Linda Moncys-Isacson, Associate Solicitor, Office of the Solicitor, United States Patent and Trademark Office, of Arlington, Virginia, argued for appellee. With her on the brief were John M. Whealan, Solicitor; and Thomas Krause, Associate Solicitor. Of counsel was Nancy C. Slutter, Associate Solicitor.

Before MAYER, Chief Judge, MICHEL, and RADER, Circuit Judges.

Opinion for the court filed by MICHEL, Circuit Judge. Dissenting opinion filed by MAYER, Chief Judge.

MICHEL, Circuit Judge.

MBNA America Bank, N.A. ("MBNA") appeals the June 11, 2002, decision of the United States Patent and Trademark Office's Trademark Trial and Appeal Board ("the Board") affirming the Examining Attorney's refusal to register the word marks MONTANA SERIES and PHILADELPHIA CARD because Section 2(e)(1) of the Lanham Act, 15 U.S.C. § 1052(e)(1) (2000), precludes registration of marks that are "merely descriptive." In re MBNA Am. Bank, N.A., 2002 WL 1285938, 2002 TTAB LEXIS 355 (June 11, 2002). Because the Board committed no legal error, and more than substantial evidence supports the Board's finding that the two service marks in issue are merely descriptive of a feature or characteristic of the services, i.e., according to the amended applications, "credit card services featuring credit cards depicting scenes or subject matter of, or relating to," the state of Montana or the city of Philadelphia, we affirm.

I.

In 1993, MBNA filed two intent-to-use applications, pursuant to 15 U.S.C. § 1051(b), to register the marks MONTANA SERIES and PHILADELPHIA CARD for "credit card services." The recitation of services for the two marks was later amended to read: "credit card services featuring credit cards depicting scenes or subject matter of, or relating to," the state of Montana, or the city of Philadelphia, respectively. The term "CARD" in PHILADELPHIA CARD has been disclaimed. After rejections on various grounds, and withdrawal and reinstatement of certain rejections, the Examining Attorney finally refused registration of both marks citing Section 2(e)(1) of the Lanham Act.

Pending are at least 75 other applications filed by MBNA to register similar service marks, including at least 45 applications for state names preceding the word "SERIES" and 27 applications for city names immediately preceding the word "CARD." Two marks, DELAWARE SERIES and KENTUCKY SERIES, were allowed registration by the Examining Attorney and issued in 1992 and 1995, respectively.

MBNA appealed the Examining Attorney's rejection of registration for MONTANA SERIES and PHILADELPHIA CARD to the Board. The Board made specific findings regarding affinity credit cards, i.e., credit cards depicting images of or named after various social or lifestyle associations such as sports teams, universities, wine connoisseurs, bird lovers, etc. For the case at bar, the Board found that MBNA's services as recited in its applications were essentially "regional affinity" credit card services that combine traditional financial services with affinity cards named after geographical regions of the country. The Board found that a significant feature of MBNA's regional affinity credit card services was to appeal to the user's regional pride and loyalties with cards depicting scenes of and/or named after the state of Montana or the city of Philadelphia, and that this significant feature was further manifested by how MBNA marketed and promoted its affinity credit card services. Finding that the two marks merely described a significant feature of the underlying credit card services, the Board affirmed the Examining Attorney's refusal to register the marks.

MBNA appeals the Board's decision. This court has jurisdiction over the appeal under 28 U.S.C. § 1295(a)(4)(B).

II.

This court reviews the Board's legal conclusions without deference. In re Hiromichi Wada, 194 F.3d 1297, 1299 (Fed.Cir.1999). The Board's determination that a mark is merely descriptive is a factual finding, which this court upholds unless unsupported by substantial evidence. In re Nett Designs, 236 F.3d 1339, 1341 (Fed.Cir.2001). The principal issue on appeal is whether substantial evidence supports the Board's finding that the marks, as applied for, were merely descriptive. MBNA also challenges the Board's decision on the grounds that the Board committed legal errors in, allegedly, concluding that a "regional designation" can never be inherently distinctive, finding descriptiveness based on a trade dress, using a purchaser motivation test, and failing to resolve doubts as to descriptiveness in the applicant's favor.

A.

"In order to be registered, a mark must be capable of distinguishing the applicant's goods from those of others." Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763, 768, 112 S.Ct. 2753, 120 L.Ed.2d 615 (1992) (citing 15 U.S.C. § 1052). A mark is "distinctive and capable of being protected if it either (1) is inherently distinctive or (2) has acquired distinctiveness through secondary meaning." Id. at 769, 112 S.Ct. 2753 (citation omitted). In the present case, MBNA does not argue that its marks MONTANA SERIES and PHILADELPHIA CARD have acquired distinctiveness through secondary meaning, and has not pursued registration under 15 U.S.C. § 1052(f) for such acquired distinctiveness. Rather, it contends that its marks are inherently distinctive.

Marks are often classified, according to their increasing degree of inherent distinctiveness, as: (1) generic, (2) descriptive, (3) suggestive, and (4) arbitrary or fanciful. Id. at 768, 112 S.Ct. 2753. Suggestive or arbitrary marks are deemed inherently distinctive and are entitled to registration as such; generic or descriptive marks are not. Id. Although the dividing lines are not always clear, the distinctions are critical in a registration determination. In re Merrill Lynch, Pierce, Fenner, & Smith, Inc., 828 F.2d 1567, 1569 (Fed.Cir.1987).

At the core of this appeal is the question whether MONTANA SERIES and PHILADELPHIA CARD are inherently distinctive, i.e., suggestive or arbitrary, or not inherently distinctive, i.e., merely descriptive. The Board affirmed the Examining Attorney's rejection of registration of the marks pursuant to Section 2(e)(1) of the Lanham Act, which provides that a trademark cannot be registered if it, "when used on or in connection with the goods of the applicant[,] is merely descriptive or deceptively misdescriptive of them." 15 U.S.C. § 1052(e)(1). Section 2(e)(1) also applies to a service mark, pursuant to Section 3 of the Act. Id. § 1053.

A mark is merely descriptive if it immediately conveys information concerning a quality or characteristic of the product or service. Nett Designs, 236 F.3d at 1341. The perception of the relevant purchasing public sets the standard for determining descriptiveness. Id. Thus, a mark is merely descriptive if the ultimate consumers immediately associate it with a quality or characteristic of the product or service. On the other hand, "if a mark requires imagination, thought, and perception to arrive at the qualities or characteristics of the goods [or services], then the mark is suggestive." Id. The most inherently distinctive marks are arbitrary; they do not even suggest any of the qualities or characteristics of the goods or services.

Here, MBNA argues that MONTANA SERIES and PHILADELPHIA CARD are not merely descriptive, but suggestive or arbitrary, because they do not immediately convey information concerning MBNA's credit card services, such as the terms of financing, interest rates, the annual fee, the extended warranty program, rewards program, or other features of MBNA's financial services. The Board, however, found that MBNA provided not only financial services, but "regional affinity" credit card services — a financial service in conjunction with satisfying a social or lifestyle association with a particular city or state. Finding that the marks thus identified the community of intended users as well as the images on the plastic credit card itself, the Board found that the marks merely described significant features or characteristics of the affinity credit card services.

We agree with the Board that MBNA offers affinity credit card services, which are fundamentally different in scope from ordinary credit card services. MBNA specifically recites in its applications for the marks: "credit card services featuring credit cards depicting scenes or subject matter of, or relating to," the state of Montana, or the city of Philadelphia. MBNA notes that only upon the Examining Attorney's insistence did it amend the recitation for the services to expand beyond "credit card services." However, MBNA could not recite a service that it would not provide. Further, in the August 30, 1999, Office Action, the Examining Attorney, after suggesting the amendment for MBNA to overcome the Section 2(e)(2) (geographically descriptive) and Section 2(e)(3) (geographically deceptively misdescriptive) rejections, specified that "the amended recitation of services will not negate the Section 2(e)(1) refusal discussed below." In the same Office Action, the Examining Attorney then reinstated his Section 2(e)(1) refusal on the ground that the proposed mark described a primary feature of the "credit card services" provided.¹ Office Action at 2 (Aug. 30, 1999).

Substantial evidence supports the Board finding that MBNA offers affinity credit card services. MBNA indeed offers, advertises, and provides affinity credit cards depicting subject matters appealing to groups with various geographic affinities. Here, the credit card specimens filed with the amendment in the...