Merrill Lynch, Pierce, Fenner, and Smith, Inc., In re

• Decision Date: 17 September 1987
• Docket Number: No. 86-1080,86-1080
• Citation: 4 USPQ2d 1141,828 F.2d 1567
• Parties: , 4 U.S.P.Q.2d 1141 In re MERRILL LYNCH, PIERCE, FENNER, AND SMITH, INC.
• Court: U.S. Court of Appeals — Federal Circuit

Page 1567

828 F.2d 1567

56 USLW 2204, 4 U.S.P.Q.2d 1141

In re MERRILL LYNCH, PIERCE, FENNER, AND SMITH, INC.

No. 86-1080.

United States Court of Appeals, Federal Circuit.

Sept. 17, 1987.

Steven H. Hartman, Milgrim, Thomajan, Jacobs & Lee, New York City, for appellant.

Joseph F. Nakamura, Solicitor, Fred E. McKelvey, Deputy Solicitor and Nancy C. Slutter, Asst. Solicitor, Office of the Solicitor, Arlington, Va., for appellees.

Before SMITH, Circuit Judge, COWEN, Senior Circuit Judge, and NEWMAN, Circuit Judge.

PAULINE NEWMAN, Circuit Judge.

The Commissioner of Patents and Trademarks, acting through the Trademark Trial and Appeal Board (Board), refused registration of the term CASH MANAGEMENT ACCOUNT on the Principal Register as a service mark for "stock brokerage services, administration of money market fund services, and providing loans against securities services", Application Serial No. 254,808. In re Merrill Lynch, Pierce, Fenner & Smith, Inc., 230 USPQ 128 (TTAB 1986).

The Board held that CASH MANAGEMENT ACCOUNT is a common descriptive or generic name for these financial services, such that acquired distinctiveness or secondary meaning can not provide a right to registration, as a matter of law. The Board thus refused registration under 15 U.S.C. Sec. 1052(f). We reverse and remand.

Incontestability

Appellant already has a registration No. 1,118,929 on the Principal Register, granted May 22, 1979 for the term CASH MANAGEMENT ACCOUNT as a service mark for "financial services involving the use of plastic credit cards by the cardholders for loans to cardholders from their brokerage equity account." This registration is incontestable, in accordance with 15 U.S.C. Secs. 1065 and 1115(b). Taking the position that these services are substantially the same as the services for which registration is now sought, appellant argues that "the Board erred as a matter of law in refusing to order registration on the Principal Register of a service mark as to which Appellant owns incontestable rights". Appellant argues that its incontestable right to use the term CASH MANAGEMENT ACCOUNT for the services for which it is registered "perforce includes the right to register that term for these same services in a subsequent application". Appellant asserts that to hold otherwise would deny it title to the mark for the services for which the mark is already registered, citing Park 'N Fly, Inc. v. Dollar Park and Fly, Inc., 469 U.S. 189, 105 S.Ct. 658, 83 L.Ed.2d 582 (1985).

The benefits of incontestability are no more than that "the registration shall be conclusive evidence of the registrant's exclusive right to use the registered mark in commerce". 15 U.S.C. Sec. 1115(b). The only thing that becomes incontestable is the right of the registrant to use the mark for the goods or services for which it is registered. Even that right is subject to the defenses enumerated in 15 U.S.C. Sec. 1115(b) and to the grounds for cancellation set forth at 15 U.S.C. Sec. 1064(c) and (e). Holiday Inn v. Holiday Inns, Inc., 534 F.2d 312, 320, 189 USPQ 630, 636 (CCPA 1976).

In Park 'N Fly, Inc. the Supreme Court held that an action for infringement of a registered mark that has become incontestable can not be defended on the ground that the mark is "merely descriptive". 469 U.S. at 205, 105 S.Ct. at 667. This holding is not pertinent to appellant's argument concerning registration of the same mark for a broadened class of goods. The appellant does not explain how its existing registration for services that require the use of plastic credit cards is substantially the same as the services for which registration is now sought, as those are set forth in the subject application for registration and as quoted by the Board in its opinion at page 130 of 230 USPQ.

While "ownership of one or more prior registrations on the Principal Register ... of the same mark may be accepted as prima facie evidence of distinctiveness," 37 C.F.R. 2.41(b), ownership of a registration does not of itself authorize the grant of another registration for different goods. Each application for registration must be considered on its own merits. In re Loew's Theatres, Inc., 769 F.2d 764, 769, 226 USPQ 865, 869 (Fed.Cir.1985). Appellant's argument that refusal of a broader registration is comparable to an attack on an existing registration is unsupported by law or precedent.

The Board correctly held that appellant's incontestable registration for specific services involving credit cards does not automatically entitle appellant to a registration for broader financial services.

Descriptiveness

The Board affirmed the examiner's determination that the term CASH MANAGEMENT ACCOUNT is generic for the services described in the application. The Board considered first whether the term is a common descriptive or generic name for the described services.

Appellant argues that its incontestable registration of the mark for similar services is persuasive evidence of distinctiveness, and also argues that there is no direct evidence that CASH MANAGEMENT ACCOUNT is generic for the services for which registration is sought. From the examiner's evidence of usage in newspapers and financial publications, the Board concluded that "[w]hile there are references to applicant as a pioneer in this type of account", as well as first user of the term to identify such an account, "it appears that said term has been adopted by a major segment of financial business as a name to designate services such as applicant offers." In re Merrill Lynch, 230 USPQ at 130.

The four classic categories--generic ("common" descriptive), descriptive ("merely" descriptive), suggestive, or arbitrary--have been described as "central tones in a spectrum", that "tend to merge at their edges and are frequently difficult to apply." Soweco, Inc. v. Shell Oil Co., 617 F.2d 1178, 1183, 207 USPQ 278, 282 (5th Cir.1980), cert. denied, 450 U.S. 981, 101 S.Ct. 1516, 67 L.Ed.2d 816 (1981). Nonetheless, the distinctions are critical to the availability and the evidentiary requirements of registration.

Generic terms, by definition incapable of indicating source, are the antithesis of trademarks, and can never attain trademark status. Dan Robbins & Associates, Inc. v. Questor Corp., 599 F.2d 1009, 1014, 202 USPQ 100, 105 (CCPA 1979). The reason is plain:

To allow trademark protection for generic terms, i.e., names which describe the genus of goods being sold, even when these have become identified with a first user, would grant the owner of the mark a monopoly, since a competitor could not describe his goods as what they are.

CES Publishing Corp. v. St. Regis Publications, Inc., 531 F.2d 11, 13, 188 USPQ 612, 615 (2d Cir.1975). In contrast, "merely descriptive" terms are capable of acquiring, in the view of the consuming public, an association with the source of the goods or services; that is, a secondary meaning in accord with 15 U.S.C. Sec. 1052(f). See Roselux Chemical Co. v. Parsons Ammonia Co., 299 F.2d 855, 862, 132 USPQ 627, 633 (CCPA 1962) ("Distinctiveness means that the primary meaning of the word ... is as a designation of source rather than of a characteristic of the product.") (emphasis in original).

Whether a term is classified as "generic" or as "merely descriptive" is not easy to discern when the term sits at the fuzzy boundary between these classifications. See Zatarains, Inc. v. Oak Grove Smokehouse, Inc., 698 F.2d 786, 790, 217 USPQ 988, 993 (5th Cir.1983) ("[t]he labels are more advisory than definitional, more like guidelines than pigeonholes"). It is basic to the inquiry to determine whether members of the relevant public primarily use or understand the term to refer to the genus of goods or services. H. Marvin Ginn Corp. v. International Association of Fire Chiefs, Inc., 782 F.2d 987, 989-90, 228 USPQ 528, 530 (Fed.Cir.1986). As the court said in In re Automatic Radio Manufacturing Co., 404 F.2d 1391, 1396, 160 USPQ 233, 237 (CCPA 1969):

It seems elementary that one must find out how people in the trade and the purchasers use the terms with respect to the involved goods in order to determine whether or not they are descriptive.

The Board found that the term CASH MANAGEMENT ACCOUNT is generic or commonly descriptive, not "merely descriptive". This finding of fact is reviewed for clear error. See In re Bed & Breakfast Registry, 791 F.2d 157, 160, 229 USPQ 818, 819 (Fed.Cir.1986); In re Northland Aluminum Products, Inc., 777 F.2d 1556, 1559, 227 USPQ 961, 963 (Fed.Cir.1985).

Evidence of the public's understanding of the term may be obtained from any competent source, such as purchaser testimony, consumer surveys, listings in dictionaries, trade journals, newspapers, and other publications. In re Northland Aluminum Products, 777 F.2d at 1559, 227 USPQ at 963; Dan Robbins & Associates, Inc. v. Questor Corp., 599 F.2d at 1014, 202 USPQ at 105; In re Thunderbird Products Corp., 406 F.2d 1389, 1390-91, 160 USPQ 730, 731-32 (CCPA 1969).

Before the Board was voluminous evidence of usage in financial publications of the term, following Merrill Lynch's introduction of the...