"ThumbDrive" Held Not Generic For Flash Drives By U.S. Trademark Trial and Appeal Board: Right Decision?

I’ve seen a bit of discussion lately about a recent decision issued by the U.S. Trademark Trial and Appeal Board (the “Board”) on the issue of trademark genericness. Much of that discussion seems to center around “why would the Board render such a decision?” I’ve had a chance to read the decision and give it some thought. I agree with the Board, on this one.

In the precedential decision of In re Trek 2000 International Ltd., the Board held that the United States Patent and Trademark Office (“USPTO”) failed to meet its burden to establish by clear evidence that the term THUMBDRIVE is generic for flash drives, thus unprotectable as a trademark.

Background

Trek 2000 International sought registration of the mark THUMBDRIVE on the Principle Register, on the basis of acquired distinctiveness, for portable digital electronic devices for recording, organizing, transferring, storing, and reviewing text, data, image, audio and video files; computer software for use in recording, organizing, transferring, storing, and reviewing text, data, image, audio and video files on portable digital electronic devices. Although Trek already owned a trademark registration on the Supplemental Register (the register for marks capable of becoming trademarks) for the mark THUMBDRIVE, Trek sought registration of the mark on the Principal Register (the register for recognized trademarks) on the basis the mark had acquired trademark status through acquired distinctiveness (meaning that consumers had come to recognize the term THUMBDRIVE as referring to the source of the goods). On a side note – it’s my opinion that the coined term THUMBDRIVE appears to be inherently distinctive for flash drives. It probably never deserved to find its way onto the Supplemental Register.

Initially, the examining attorney approved the mark for publication. However, shortly thereafter, the examining attorney requested jurisdiction be restored. Once the application was restored with the examining attorney, she rejected the application on the basis the term THUMBDRIVE is generic for the goods – thus not protectable as a trademark. Trek later appealed that decision to the Board.

On appeal, the Board had to determine, based upon the evidence before it, whether the term THUMBDRIVE is generic for flash drives.

Trademark Law Principles – Genericness

Whether a particular term is generic, and therefore cannot be protected as a trademark, is a question of fact. The determination of whether a term is generic is therefore, based upon the evidence made of record. The critical issue is whether that evidence shows that the relevant purchasers use – or understand – the term sought to be registered to refer to the category of products or services in question. Making that determination involves a two-part inquiry: First, what is the genus or category of products or services at issue? Second, is the term sought to be registered …understood by the relevant public primarily to refer to the genus or category of products or services? Evidence of the public’s understanding of a term may be obtained from any competent source, including testimony, surveys, dictionaries, trade journals, newspapers and other publications.

The primary purpose for finding that a term is generic, thus not eligible for trademark protection, is to prevent competitive harm. As noted by the Court of Appeals for the Seventh Circuit:

To determine that a trademark is generic and thus pitch it into the public domain is a fateful step. It penalizes the trademark’s owner for his success in making the trademark a household name and forces him to scramble to find a new trademark. And it may confuse consumers who continue to associate the trademark with the owner’s brand. …The fateful step ordinarily is not taken until the trademark has gone so far toward becoming the exclusive descriptor of the product that sellers of competing brands cannot compete effectively without using the name to designate the product they are selling.

Ty Inc. v. Softbelly’s Inc., 69 USPQ2d 1213, 1215 (7th Cir. 2003).

It is well established that the availability of other words for competitors to use does not, by itself, transform a generic term into a capable trademark. However, where the evidence of record does not show that competitors use the designation in issue, this may create doubt, depending on the totality of the record, as to whether a term primarily refers to a genus of products or services such that “sellers of competing brands cannot compete effectively without using the name to designate the product they are selling.”

USPTO’s Evidence of Genericness

The examining attorney offered the following types of evidence in support of her position that the mark THUMBDRIVE is generic:

1. Web page printout defining THUMB DRIVE as “one of many terms used in popular language for USB flash drive.”

2. Web page printout defining “USB flash drive” as a “small, keychain-sized flash memory device…also called a thumb drive.”

3. Excerpt from a web page defining “flash drive” as “a portable storage device…also called flash disk, key drive, thumb drive….”

4. Web page printout that says “Do you have an old thumb drive….”

5. An article that says “This thumb drive will self-destruct in 10 seconds….”

6. Commentary web pages that use the term thumb drive as referring generically to flash drives.

Based on the foregoing type of evidence submitted by the examining attorney, she argued that the evidence of record is competent and diverse and adequately shows the relevant consumers’ understanding of the term THUMBDRIVE as identifying a genus of goods such as those identified in the instant application.

Applicant’s Evidence Against Genericness

As you would expect, Applicant respectfully disagreed and offered the following types of evidence:

1. Declaration with U.S. sales figures of 4.3 million dollars for THUMBDRIVE branded products between 2002 and 2007, uses of the mark THUMBDRIVE on the Internet by Applicant and third parties, a statement that Applicant coined the term in 2000, a statement that Applicant co-branded the mark THUMBDRIVE with other third party companies and a listing of Applicant’s “family of THUMBDRIVE marks.” (To read more about a “family of marks,” check out my blog post here)

2. Articles and media usage of the term THUMBDRIVE as a recognized trademark.

3. Wikipedia entry for “USB flash drive” that recognizes the term THUMBDRIVE as a trademark of TREK and a statement that the term “USB flash drive” has become the defacto standard term for these types of devices.

4. Negative dictionary evidence: Merriam-Webster dictionary does not list the term THUMBDRIVE.

5. Samples of competitors’ websites that show use of the term “flash drive” as used as the generic term for the products.

6. Samples of Applicant policing its trademark THUMBDRIVE. Applicant submitted copies of letters to media outlets, whereby those parties agreed not to use THUMBDRIVE generically.

Board’s Decision

The Board noted that to deny the statutory federal registration, there must be clear and convincing evidence of the invalidity of that property right and a sound public interest served by its forfeiture. The Board went on to state that the “protection of the public interest includes ensuring that sellers who must use a particular term to compete effectively can do so.…”

The Board began by answering the first inquiry: what is the genus of goods? The Board concluded that the genus of goods includes those goods listed in the subject application. The Board next considered the second inquiry: the relevant consuming publics’ understanding of the term THUMBDRIVE. Is it perceived as a trademark or nothing more than a generic term for flash drive devices?

The Board first noted that the USPTO must prove with clear evidence that a term is generic. The Board also noted that although the evidence of record shows use of the term THUMBDRIVE as a generic term, it also shows the origin of that term being a trademark and extensive use of that term as a trademark. The Board also observed that the record shows that the term “flash drive” is the commonly used term of art for the subject products. Not looking so good for the examining attorney early on. But wait, there might still be a chance for the examining attorney recover from these early blows…

The Board went on by analyzing the examining attorney’s submitted evidence. It noticed that certain of the media references submitted by the examining attorney involved publications that agreed to stop using the term THUMBDRIVE generically. The Board also observed that with regard to dictionary definitions, the record shows that “the more mainstream references” do not have listings for “thumbdrive,” and two of the three references from the examining attorney’s evidence are definitions for another term, “flash drive,” where “thumb drive” is merely listed as a synonym. The Board was clearly not impressed with that evidence as demonstrated by its following statement: “we review this as weak evidence of genericness.” The Board also noted that while the record includes a few examples of online retailers using the term THUMBDRIVE generically, “it is quite noticeable that there are no examples of competitors using this term, and applicant submitted excerpts from competitors’ websites showing the absence of that term and the use of “flash drive” as the name for the goods.”

With the lack of competitor usage of the term THUMBDRIVE after ten years of use as a trademark, the Board concluded that such lack of use tends to indicate that the term THUMBDRIVE has not fully entered the public domain. It also stated that when a coined term used as a trademark is taken up by the public but not by competitors and the stakes “are the fateful step” of full “eradication” of an applicant’s commercial rights, the evidentiary burden to establish genericness is heavy indeed.  The Board also went on to note the following about today’s technological world:

“Today, with a 24-hour news cycle and 24/7 online global activity, undoubtedly many trademarks are misused repeatedly, perhaps, in part, because there is less time for editing and reflection before news reports or blog posts are released, and, in part, because what was the casual spoken word between people is now the written word posted to the world.”

The final blow to the examining attorney’s evidence came when the Board stated: “In other words, the evidence of record does not demonstrate a competitive need for others to use this term.” As a result, the Board concluded that the evidence creates doubt as to whether the term THUMBDRIVE is generic. As is the case with descriptiveness, any doubt as to whether a term is generic must be resolved in favor of Applicant. So the Board did.

Trademark Titan Blog Takeaways

1. Brand owners that fail to adequately police their trademarks run the risk, in limited situations, of losing their trademarks to the public domain.

2. Brand owners must not only police third-party misuse of their trademarks, but also misuse in the media and in dictionaries.

3. Companies that launch new – never seen before – products must not only adopt brand names for those products, but must also adopt generic names or likely see their once valid trademarks become the name for the genus of product. Remember yoyo and escalator? Yep, once trademarks.

4. Once a trademark becomes genericized, it’s generally too late to worry about it. When consumers begin to use a trademark to refer to the name of the “thing” itself, it’s time for its owner to spring into action and correct the misuse. There is no time for delay.

5.  Select marks that are inherently distinctive (and stay away from already or nearly generic terms), of which I have blogged about many times, including here, here and here.

ICANN Delays Introduction of New Top Level Domain Names: Six Actions Brand Owners Can Take Now In Advance of Launch

The Internet Corporation for Assigned Names and Numbers (“ICANN”), the entity that oversees the Internet domain name system, has once again delayed the introduction of new generic top level domain names (“gTLDs”) until likely sometime in 2011. The chief issues continue to revolve around brand owners’ concerns over trademark protection and costs associated therewith, of which I have blogged about. (ICANN’s Proposal For New Generic Top Level Domain Names: Should All Brand Owners Be Concerned?) 

As brand owners await ICANN’s imminent launch of various new gTLDs they should be reviewing and, if necessary, revising current domain name policies to meet anticipated new challenges. Below are six actions brand owners can take right now to ready themselves for the potential deluge of hundreds (and some argue thousands) of new gTLDs.

1. Determine annual budget. What’s the annual budget for 2011 for reserving or maintaining domain names that point towards active sites or redirect to active sites and for pure defensive plays (those domain names reserved for the purpose of keeping them out of the hands of cyber squatters and Domainers)? Once you have that number, plan accordingly.

2. Conduct periodic audit of domain name portfolio. An audit should determine which of your current domain names could be dropped due to little or no activity. If there’s little or no activity on certain sites, than those domain names probably have little or no value to cyber squatters anyways. Consider letting those go in lieu of more “valuable” domain names.

Maintain those .COM – and possibly those .BIZ, .NET, .INFO and country code – domain names that correspond to common misspellings of brand names (consider new devices on market and what typos are being made), for key brand names in key territories, for generic product names (i.e., runningshoes.com for running shoe company) and for potentially damaging sites such as yourtrademarkSUCKS.com. Dot COM domains are still the most coveted of gTLDs by Domainers and cyber squatters. I suspect that cyber squatters would prefer NIKEapparel.com over Nike.gardening or FORDvehicles.com to FORD.movies.

Add new domain names that correspond to newly adopted gTLDs that are likely to result in misdirected Internet traffic and potential lost profits. For example, automakers should reserve domain names that correspond to .AUTO, .CARS and .TRUCKS gTLDs. However, I really can’t think of a valid business reason why auto manufacturers would want to allocate funds to reserve domain names that correspond to unrelated gTLDs, such as Highlander.food and F150.gardening. Unless there’s an issue of dilution, those funds should probably be allocated to enforcement activities.

Also, as new brand names are launched, reserve priority domain names that correspond with those new names. For those brands that go to the graveyard, consider allowing those corresponding domain names to expire in due time.

3. Establish policing policy. In addition to compiling a healthy domain name portfolio, brand owners must also actively police third party registrations of potentially harmful domain names. A global watch program can cost thousands of dollars annually, so plan accordingly if such a service is desired or is necessary. Alternatively, brand owners can opt to conduct periodic in-house searches.

4. Establish consistent policy for enforcing brands. Create a policy for taking action against third parties that reserve potentially harmful domain names. The policy should be detailed. Determine in advance – outlined in policy – which “infringements” warrant action. When a credible threat is detected, take quick and decisive action. However, pick your battles as funds are likely limited.

5. Don’t overprotect. Brand owners simply cannot reserve all domain name permutations. It’s just too costly. That will become more evident as new gTLDs are launched. A better approach is to combine a healthy domain name portfolio with consistent monitoring and enforcement.

6. Take a deep breath and relax. For most brand owners, the launch of new gTLDs will likely go unnoticed. For those same brand owners, there will likely be bigger fish to fry in 2011.

To read more about this issue, check out Economic Considerations in the Expansion of Generic Top-Level Domain Names: Phase II Report: Prepared for ICANN that was released this month.