If you’re appealing a decision that “OBX” is generic for oval stickers with “OBX” printed on them, is it a good sign or a bad sign that the appeals court decision starts out “James Douglas cleverly invented ‘OBX’ as an abbreviation for the “Outer Banks” of North Carolina”?
Bad. In a well-reasoned and well-written opinion, the court explained the difference between a term that everyone recognizes, even though it was coined by the trademark registrant, and a trademark. I can’t summarize it better than the court said it:
In this case, the letters OBX had the potential of becoming a valid and enforceable trademark to identify an OBX brand product and OBX-Stock as the source of the product. But from the beginning, Douglas, the inventor of “OBX,” never intended that OBX become associated with a product as its brand or source. Rather, Douglas intended solely that OBX become associated with and descriptive of a geographical location, the Outer Banks. He repeatedly stated this fact in his deposition, and he continues to maintain it in arguments made to us. As he states in his briefs, “OBX-Stock created a new term that would suggest the Outer Banks”; “Douglas wanted to print and sell white oval stickers like the ones used in Europe to display country of origin but with a mark that would suggest the Outer Banks of North Carolina to customers”; “Although Douglas wanted to conjure images of the Outer Banks, he did this through a fictional word without prior meaning.” (Citations omitted).
And just as important, OBX-Stock affixed the letters OBX to stickers, souvenirs, and other sundries not to label an OBX brand product produced by OBX-Stock, but to indicate an association with the Outer Banks. Douglas testified that this purpose had its effect—persons learning of the significance of OBX did indeed associate OBX with the Outer Banks. Most dramatically, OBX did, as intended, become a commonly accepted abbreviation for “Outer Banks,” and thus became a geographically descriptive abbreviation. Bicast produced overwhelming evidence in the district court demonstrating that OBX entered the “linguistic commons” as an often-used, everyday abbreviation of “Outer Banks.” Indeed, many Outer Banks businesses sell clothing, bottled water, and various other goods and services bearing “OBX.” When affixed to any product or service, the evidence suggests that OBX merely denoted the geographical origin, Outer Banks. Thus, at bottom, when OBX-Stock affixes the letters “OBX” to stickers, souvenirs, and other products, it is merely communicating the fact that the sticker or product comes from the Outer Banks, and that was Douglas’ intent all along.
But that is not the secondary meaning that allows a geographically descriptive word to indicate, by usage and promotion, a product or source of product. A T-shirt with OBX on it does not indicate that the consumer bought an OBX brand T-shirt or that the T-shirt was a product of OBX-Stock. Rather, the letters OBX indicate that the T-shirt was purchased at the Outer Banks of North Carolina or is promoting the Outer Banks.
It’s a short and succinct opinion, well worth reading. There is a troubling portion of the opinion, though; a claim that the North Carolina congressional delegation aided in the registration of the mark.
Moreover, whatever support OBX-Stock might be able to claim from the registrations is in this case undermined by the fact that the PTO only grudgingly issued the registrations after intervention by North Carolina’s congressional delegation. As Douglas told the Outer Banks Sentinel, “Things really started to happen after we contacted their offices. We are very fortunate to have extremely efficient and powerful legislative representatives.” Before then, the PTO examiners rejected OBX-Stock’s application five times because the letters OBX had become nothing more than an alternative to Outer Banks and the terms were used “interchangeably.” . . . In the patent context, the courts have taken into consideration analogous circumstances as non-technical evidence of patent obviousness and hence invalidity. This reasoning also applies to the progress of a trademark application for inclusion on the Principal Register.
(Internal citation omitted). This is interesting in two ways. One hopes that it was only coincidence that led the trademark owner to think that his congressional representatives had an effect on his effort to register. I looked at the file histories for the four registrations cited in the appeals court decision; all were registered under Section 2(f) based on a claim of more than five years of continuous use. The plaintiff has three more registrations on the Supplemental Register but no suggestion in any of those files that they weres anything but routine prosecutions, albeit ultimately unsuccessful at proving secondary meaning.
The lengthy prosecution to which the court refers appears to be in one of the Supplemental Registrations, No. 2,610,784. It’s a 251-page file but just an ordinary prosecution, with two substantive non-final office actions on the basis of geographic descriptiveness, a final action, and a post-final response amending to the Supplemental Register. I have not before seen a statement in a trademark case that a lengthy prosecution means the registration is less valid. It seems particularly inapt where the referenced registration is only on the Supplemental Register anyway. Hopefully this particular part of the case will soon be forgotten.
Nevertheless, the outcome was easily correct and the court did a nice job explaining how a term that, although coined, can be without trademark significance, even though registered.