Trademarks, Territoriality, and Migration

Meenaxi Enterprise, Inc. v. Coca-Cola Company, 21-2209 (Fed. Cir. 2022)

Although goods are often shipped globally, many companies manufacture and sell region-specific products.  That divide allows the company to cater to local market preferences and regulations and also avoid potential arbitrage.

In the 1970’s Coca-Cola withdrew its flagship sugary cola from the Indian market at a time of heavy regulation of foreign companies. A local company then started Thums Up and it quickly became popular across the country.  Although similar to Coca-Cola, Thums Up is ‘spicier’ and you can almost taste the cardamom and cinnamon.  In the 1990s, the Indian market opened again to foreign competition. Coca-Cola purchased rights to Thums Up along with Limca lemon-lime and others and continues to sell those products in India (as well as other countries).  Coca-Cola holds the trademark rights in India, but not in the USA.  Apparently Coca-Cola abandoned its US version of the THUMS UP application back in 1987 and its US LIMCA mark expired in 1996.

About 5 million Indians and Indian-Americans live in the USA, and some of those people want to purchase Thums Up and Limca.  In 2008 Meenaxi began filling the US demand with its own version version of the drinks.  In 2012, the Meenaxi registered the two word marks with the USPTO (THUMS UP & LIMCA).  Coca-Cola stepped-in in 2016 seeking to cancel Meenaxi’s mark registrations.

The TTAB sided with Coca-Cola in ordering the marks cancelled.  On appeal, however, the Federal Circuit has reversed with Judge Dyk writing the opinion joined by Judge Stoll and Judge Reyna writing a concurring opinion.

A case like this begins with the territorial doctrine of trademark law:

Under the territoriality doctrine, a trademark is recognized as having a separate existence in each sovereign territory in which it is registered or legally recognized as a mark.

McCarthy on Trademarks § 29:1.  A simple assumption is that territorial limits align with both the laws and the people. e.g., Indians live in India and are subject to the law of India.  But here we know that Indians have migrated and brought their distinctiveness understandings with them to the USA.  Meenaxi has been free-riding off those understandings and continues to do so.  Here though, the this population centric notion of trademark law falls to the hard principle of U.S. law that trademark rights in the US require that the mark be used in the US.

Here, the court also considered whether Meenaxi’s use should actionable under the more general provisions of Section 43(a) of the Lanham Act. 15 U.S.C. § 1125(a).  However, the court found that Coca-Cola had failed to show any US injury.  (1) No lost sales; and (2) No reputational injury.  The court seemed to agree that it could be improper for Meenaxi to use Coca-Cola’s goodwill with Indian-American consumers.  But, the problem was that Coca-Cola failed to provide substantial evidence proving the existenece of free-riding. In particular, the evidence showed that the marks were well known in India, and that Meenaxi was marketing the products to Indians and Indian-Americans in the USA.  But, the missing link was evidence that the US-based Indians and Indian-Americans were aware of the branding.

There is no basis [in the evidence] to assume that an American of Indian descent is aware of brands in India. The Board did not consider what portion of Indian Americans had spent time in India, i.e., how many had visited India or lived in India. The Board’s conclusion relies at least in part on stereotyped speculation. . . .

Coca-Cola has not presented any survey evidence showing awareness of either mark in the United States. . . . This is plainly insufficient.

Slip Op.

Unlike IPRs on the patent side, trademark cancellation proceedings have a standing requirement.  The petitioner must “believe[] that he is or will be damaged . . . by the registration of a mark on the principal register[:] . . .”  15 U.S.C. § 1064.  And, although the “belief” element appears subjective, it is interpreted as quite objective.  Here, since Coca-Cola could not show any US injury then could not reasonably believe it was damaged.   REVERSED in favor of Meenaxi.

Judge Reyna argued that the case is governed by the territorial principal of trademark law. “[T]he majority’s opinion could be reasonably read to imply that CocaCola could have established statutory standing if it proved that U.S. consumers were aware of its Indian brands. But if that were the case, I would still reverse because the territoriality doctrine governs, and Coca-Cola waived reliance on the well-known mark exception thereto.”

= = =

The case cites recent work by Professors Farley & McKenna with regard to some confusion created by Belmora LLC v. Bayer Consumer Care AG, 819 F.3d 697 (4th Cir. 2016). Christine H. Farley, No Trademark, No Problem, 23 B.U. J. Sci. & Tech. L. 304, 313 (2017) (stating the Belmora decision “failed to acknowledge that its ruling challenged fundamental principles of trademark law”); Mark P. McKenna & Shelby Niemann, 2016 Trademark Year in Review, 92 Notre Dame L. Rev. Online 112, 122 (2016) (stating the Belmora decision “is especially notable . . . [in] its failure to recognize the implications of its decision for the territoriality of trademark rights”).

5 thoughts on “Trademarks, Territoriality, and Migration

  1. 1

    Thanks. We recently saw also, “Scotch Whisky” being granted TM protection in the US, along these lines of regionalness. Recalling “Champagne” also as an xample. Steely Dan sang about Scotch Whiskey in the song “Deacon Blues”, decades ago. It seems to me as if Scotch Whisky is generic. Is it a retroactive capture of a generic term, that Scotch Whisky is a trademark ? I see it also as being descriptive. I mean, how would it be used “Scotch Whisky(TM) beverage” ?

    1. 1.1

      I think there might be some confusion here. “Scotch Whisky” has not been granted “trademark” status. Instead, per government regulations, the term “Scotch Whisky” can only be used in connection with certain whiskies – i.e., in the U.S. – only whiskies made in Scotland, and in the UK, even more stringent requirements (including where they were distilled, where aged, the grain content, etc.).

      So “Scotch Whisky” is still generic, but per US government regulations, you can only call your malt whisky “Scotch” if you make it in Scotland. But if you make it in Scotland (and comply with all the rest of the UK regulations), you should be free to label your whisky with the generic term “Scotch Whisky.”

      1. 1.1.1

        Hi, thanks a lot for that, I have a hunch what you wrote is 100% right.

        Its unordinary, but, at the end of the day a consumer purchasing a product labeled as Scotch Whisky, is taught what the “source of the goods” is, and really that’s a huge chunk of TM law as I see it, identification of the source of goods.

        With Scotch Whiskey, the TM “owner” isn’t a legal person as with most TM’s but instead this TM is effectively “owned” by a Collective !!

        The Collective are the distillers located on Scottish soil. A collective of merchants, protecting their product by restricting what others can put on their labels. Is it a “hybrid trademark”, using hybrid regs and procedures ? Maybe, but who cares ? At the end of the day the buyer is assured of the source of the goods, provided the Collective enforces its “trademark” and there are no counterfeits. Its like what the Riddler on Batman would say: “When is a trademark not a trademark, but is ?

        Some of these states in the US ought consider doing similar with some of their products. Indian River fruit might be one. “Texas BBQ” might be a challenge to do, since its consumed after preparation mostly and isn’t exported much. But its diffrent than Oregon BBQ, Tennessee BBQ, and the stuff the yankees pass off to one another as BBQ. So many possibilities.

        Happy Friday, have a good weekend ! thx for the reply

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