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PTO Doesn’t Buy That THC Stands for Tea Honey Care

The Trademark Trial and Appeal Board (TTAB) of the United States Patent and Trademark Office (PTO) recently affirmed the refusal to register the mark THCTEA, holding that it is “deceptively misdescriptive” when used in connection with tea-based beverages. The Applicant—Christopher Hinton—is, according to marijuanafreepress.com, the acting editor for the Marijuana Free Press.

THCTEA’s journey through the trademark system has been an uphill battle.The mark was first refused by the PTO back in September 2012, for being “merely descriptive” and for “plainly indicat[ing] that Applicant’s…goods include…THC.” One pre-requisite for trademark registration is lawful use of the mark in commerce. The problem in this case was that goods containing THC (tetrahydrocannabinol, the active ingredient in marijuana) are illegal under federal law, so it would be impossible for the Applicant to show lawful use of the mark if the product did indeed contain THC.

Here is where things become interesting. The Applicant responded by clarifying that his beverages do not actually contain THC. Accordingly, the PTO rescinded its refusal based on unlawful use, but raised a new ground for refusal, based on the Applicant’s own admission: Using THCTEA on a beverage that contains no THC is deceptively misdescriptive.

Deceptively misdescriptive marks have two key features:  they misdescribe a significant characteristic of the goods associated with the mark (the “misdescriptive” part); and they are likely to cause reasonable consumers to purchase the goods, believing that the goods contain the misdescribed trait (the “deceptive” part). For example, LOVEE LAMB was held to be deceptively misdescriptive for seat covers that were not actually made of lamb’s wool. On the other hand, WOOLRICH was held not to be deceptively misdescriptive for clothes made out of cotton. In close cases, good lawyering can make a big difference.

After the PTO issued a final refusal, the Applicant appealed to the TTAB. On appeal, the Applicant re-alleged his previous arguments: “The characteristics of Applicant’s goods are such that they are suggestive” and “the product does not contain the controlled substance THC…THC is an abbreviation for ‘The Honey Care Tea.’” The TTAB was unpersuaded, and affirmed the PTO’s refusal.

Regarding the misdescription, the TTAB held that “it is plausible that tea-based beverages could contain THC” (albeit illegally) and that “THCTEA, when used for tea-based beverages, is merely descriptive for tea containing THC as a significant ingredient.” Apparently, recipes for THC-containing tea from such websites as grasscity.com, thestonercookbook.com, and 420magazine.com are sufficient to persuade the government that THC-containing tea is plausible. We were unable to find a recipe for THC-containing tea on marijuanafreepress.com.

Regarding deception, the TTAB agreed with the PTO that consumers would be likely to buy THCTEA beverages believing that they contain THC. The TTAB reasoned that, in light of the liberalization of marijuana policy in the United States, “a reasonably prudent consumer would be likely to believe that Applicant’s…beverages contain THC.”

In what probably comes as no surprise, neither the PTO nor the TTAB bought the Applicant’s argument that “THC” stands for “Tea Honey Care,” or that “THCTEA” stands for “The Honey Care Tea.” Apparently, the Applicant’s “example advertisements” (below) were unpersuasive:

thc1

Additionally, the specimen (below) that the Applicant submitted to the PTO probably did not help his “Tea Honey Care” argument:

thc2

THCTEA illustrates an interesting Catch-22 for descriptive marks that reference controlled substances. If you do put the controlled substance in your goods, you can’t claim lawful use of your mark in commerce. If you don’t put the controlled substance in your goods, your mark may be deceptively misdescriptive.

Don’t Be Fooled by Trademark Spam!

About five to ten times per year, we get a call from a client asking why the USPTO sent them an invoice for hundreds of dollars for their trademark applications. After a few minutes, it becomes clear what they are talking about—trademark spam.

Trademark spam? Trademark spam is an unavoidable and unfortunate result of the information an applicant provides the USPTO in an application, which is publically available. This includes, among other information, the name, address, and email of the party applying for the mark. As a result, spammers have all of the information they need to send fake trademark solicitations that appear to be legitimate. The USPTO is fully aware of trademark spam, but despite its efforts, applicants and registrants continue to be victimized by spammers.

What does trademark spam look like? Trademark spam generally comes in the form of official-looking correspondence—letters or email—that either “requires” the recipient to pay certain fees, or strongly “recommends” that the recipient use a particular company to facilitate the trademark registration process. In the first instance, some fees are completely fabricated, while other fees purport to be real fees, but are grossly inflated by the spammer. Here is a list of the actual USPTO trademark fees and their correct amounts. In the second instance, spammers offer their services to facilitate the registration process, something only licensed attorneys are allowed to do. To give you a better idea of what trademark spam looks like, here are a couple examples of trademark spam, one from the “U.S. Trademark Compliance Office” and another from the “Patent & Trademark Office.” While these may appear to be official USPTO documents, both are actually spam.

How can I distinguish trademark spam from legitimate, USPTO correspondence? Here is a quick, easy, and effective way, recommended by the USPTO, to tell trademark spam from legitimate correspondence: If the correspondence is from (1) the “United States Patent and Trademark Office” in Alexandria, VA; or (2) If by e-mail, specifically from the domain “@uspto.gov,” then it is official, USPTO correspondence. Also, if you hired an attorney to file your application, all legitimate mail should go to them. Remember, if you ever have any doubt as to the legitimacy of any correspondence you receive regarding your trademark application or registration, you should check with the USPTO, or an experienced trademark attorney.

What should I do if I get spammed? If you receive any communications that you believe may be spam, or believe you have been misled by trademark spam in the past, the USPTO encourages you to email a copy of the correspondence and the envelope it came in to tmfeedback@uspto.gov, so that it may assess whether to add the sender to the trademark spam list. While the USPTO will not reimburse you for any money you paid to a spammer, notifying the USPTO may help prevent others from being misled in the future.

Beer Cops, Another Side

I normally like The Wall Street Journal but wow a recent editorial about “The Craft Beer Cops” was a letdown. I am not sure it is even worthy of a college newspaper, or one of the Journal’s interns. I don’t see any new points and I certainly don’t see any ideas for how to more properly regulate the industry. It has the feel of Trumpism; a few guys said it’s bad, and that becomes sufficient evidence that it’s a yuge disaster. I don’t want to paste the whole editorial because it’s behind a paywall, so I tried to repeat only the worst half, as below within the block quotes.

You might think of a microbrewery as a home for free spirits who grow long beards, take their dogs to work, and make their own rules. But Washington won’t let them. …

This seems a dumb place to start. Does anyone really think each brewer should do entirely as they wish? I doubt it. So it’s really a question of which rules are good, not whether. Not to mention that there is plenty of evidence that many of the brewers like the rules and helped shape them.

Mr. Bush had recently bumped into Erik Olsen of New Hampshire’s Kelsen Brewing Company, who told him that competing in this industry requires a license from the U.S. Treasury that Mr. Bush says goes back to Prohibition days. …

Fantastic. One data point, based on bumping into one person. Is the licensing scheme bad just because it goes back a few generations?

[TTB] says its application process is …” You know, in case they might be Al Capone.

This seems particularly lazy and suggests that just because the bearded gents might not tote machine guns, that they are all angels. Also, I thought Al Capone was a spirits guy (not a Chardonnay or Dunkel guy). Then again, maybe he did dabble in Dunkel.

Brewers have to go back to the feds to get approval for each new label. … He adds that the agency “has to approve our plans before we can start using the new expansion space for brewing.” This can take six months or more.

This I agree with more. If the government wants to have at least one hand on the steering wheel, they should put up the resources to do so properly.

Ohio Gov. John Kasich got an earful on the same subject when he recently visited New Hampshire’s Henniker Brewing. The [rules] even covers font sizes. [Henniker] was forced to stop calling its old-fashioned porter “soothing” because regulators claimed it suggested a medical benefit.

Are font rules really so onerous, especially in that TTB more or less made this a low priority a few years back? What’s the point of mandatory labeling if it’s smaller than readable? Even if you think “soothing” should be allowed, if you think all words should be allowed, you probably just have a bad imagination.

This kind of nonsensical regulation could drive anyone to drink, and it’s one more reason we have a 2% growth economy.

This is the dumbest point of all. Despite all the rules, the Journal may have picked the single worst industry in the land, to make its point about stunted growth. Is any industry growing faster than craft beer?

Another Judge Chimes in on Tito’s

On Tuesday, January 12, 2016, a federal district court in New York granted in part and denied in part Tito’s “Handmade” Vodka’s motion to dismiss several claims brought against it by a class of consumers in the case Singleton v. Fifth Generation, Inc.

Judge Brenda K. Sannes of the U.S. District Court for the Northern District of New York issued the opinion, holding that federal approval of Tito’s labels does not provide Tito’s with a “safe harbor” from litigation, and that Tito’s use of the term “handmade” and the phrase “crafted in an old fashioned pot still” “could plausibly mislead a reasonable consumer to believe that [Tito’s] vodka is made in a hands-on, small-batch process.”

Judge Sannes’ decision to allow Singleton to move forward marks yet another instance of a federal judge finding merit in false labeling claims against Tito’s. Singleton joins Hoffman v. Fifth Generation, Inc. and Cabrera v. Fifth Generation, Inc. (both federal cases in California) as well as Pye v. Fifth Generation, Inc. (a federal case in Florida) and Terlesky v. Fifth Generation, Inc. (a federal case in Ohio), which have all survived motions by Tito’s to cut the cases short.

Singleton is more akin to the two California cases, as the judges in all three refused to apply the safe harbor and held that the term “handmade” is not puffery, and therefore actionable. The judges in Pye and Terlesky, on the other hand, both applied the safe harbor, but held that consumers did state a valid claim for breach of warranty based on Tito’s statement that its vodka is “crafted in an old-fashioned pot still.” Judge Sannes, however, dismissed the breach of warranty claims in Singleton.

 With at least ten distinct cases brought by classes of consumers against Tito’s over the past year and a half, it can be difficult to keep track of how each side is faring. What is clear is that Tito’s has won two cases—Aliano v. Fifth Generation, Inc. in Illinois, and Wilson v. Fifth Generation, Inc. in Alabama—as both cases have been dismissed and the time to appeal has expired. It also seems relatively safe to say that Tito’s has the high ground in Pye and Terlesky, as the false labeling claims have been dismissed, and only the breach of warranty claims remain. What is less clear, however, is how Tito’s will fare in Singleton, Cabrera, and Hofmann, all of which are all moving forward on the plaintiffs’ mightiest claim—that they were deceived by Tito’s use of the term “handmade.”

Because Singleton survived (in part) Tito’s motion to dismiss, Tito’s will have to answer the consumer-plaintiffs’ claims. Tito’s will, however, have another chance to dismantle the plaintiffs’ case before it goes to trial, by filing a motion for summary judgment. Tito’s tried this in both Cabrera and Hofmann, but was unsuccessful. As for the three other cases against Tito’s (not listed here), the relevant courts have yet to rule on Tito’s motions to dismiss.

Foster’s then Guinness

guinness

Another lawsuit. On Tuesday, a Massachusetts consumer filed suit against Guinness, alleging deceptive labeling and marketing. This is yet another in the long series of nationwide class action lawsuits stalking the alcohol beverage industry in the past 15 months, since the initial Tito’s suits. The case is O’Hara v. Diageo-Guinness, filed in federal court. Just four days earlier, a New York City man filed suit against Foster’s Beer similarly.

The Guinness complaint says the company “represents that all Extra Stout sold in the North America is brewed in Ireland at the historic St. James’s Gate Brewery in Dublin.”

This, however, would seem to be an extra stout assertion, because new lawyer Frank and I walked over to a beer store today. The store had Guinness in various sizes and shapes, but all of the packaging seemed to show the origin clearly. Most clearly said brewed in Ireland; some (such as above) clearly said BREWED IN CANADA. We did not see any packages that made the origin hard to divine. Things may be different up in Massachusetts but nonetheless, this would seem to drastically limit the size of any class and any damages. With all the Guinness on display at the local store, clearly showing product of Ireland, and labels like this, we don’t see how the plaintiff could possibly be right in asserting “Extra Stout is not manufactured, brewed, bottled and/or imported from Ireland.” Does anyone else see a conflict between the photo above and this?:  “Extra Stout’s outer packaging does not mention, reference and/or indicate that Extra Stout is manufactured, brewed, bottled and/or imported from Canada. … Extra Stout’s label only contains one small print disclosure on the back label of the bottle acknowledging that Extra Stout is actually brewed and bottled in New Brunswick, Canada.”

The plaintiff fares better when challenging the second of these assertions, from the Guinness website (click to enlarge):

faq

Even if the second FAQ is wrong, it looks to be simply a mistake. It would be tough to avoid any such mistake in view of the other FAQ, showing that the product is made in almost 50 countries and needs to comply with the laws of “well over 100.” It looks like the plaintiffs are in for some tough sledding.

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