TTAB - Trademark Trial and Appeal Board - *1 THE SCOTCH WHISKY ASSOCIATION v. UNITED STATES DISTILLED PRODUCTS CO. Cancellation No. 17,568 November 27, 1989

Trademark Trial and Appeal Board

Patent and Trademark Office (P.T.O.)

 

*1 THE SCOTCH WHISKY ASSOCIATION

v.

UNITED STATES DISTILLED PRODUCTS CO.

Cancellation No. 17,568

November 27, 1989

 

J.D. Sams, R.L. Simms and T.J. Quinn

 

 

Members

 

 

 The Scotch Whisky Association, a limited liability company of the United Kingdom, has petitioned to cancel Registration No. 1,499,108 for the mark shown below (in reduced form)

 

 

TABULAR OR GRAPHIC MATERIAL SET FORTH AT THIS POINT IS NOT DISPLAYABLE   

for whisky. The registration issued on the Supplemental Register on August 2, 1988, with claimed first use of March 12, 1987, and first use in interstate commerce of March 25, 1987.

 

 

 As grounds for its petition to cancel petitioner asserts that it is an association of whisky distillers and merchants in the United Kingdom, organized and existing for the purposes of promoting the interests of and trade in whisky produced in Scotland, with each of its members being engaged in the business of distilling or marketing Scotch whisky, many of them marketing in the United States as well as in many other countries; that whisky produced in Scotland enjoys a substantial prestige and salability and is considered a quality product throughout much of the world including the United States, and said whisky is recognized and known in the United States as "Scotch whisky"; that the whiskies produced by the distillers represented by petitioner and sold in the United States have been widely known to be products of, and to have originated from Scotland; that respondent is using its mark [MCADAMS (stylized) ] for whisky not produced in Scotland; that such use of the mark by respondent deceptively connotes that the goods are produced in and have geographic origin in Scotland; that respondent's use of its mark for whisky not produced in Scotland damages petitioner and its members, in that persons are likely to mistakenly and falsely believe that said product was produced in Scotland, and said mistaken and false belief is likely to affect adversely the reputation and sale of whisky produced in Scotland; that respondent's use of its mark constitutes deceptive matter in violation of Section 2(a) of the Trademark Act; and that respondent's mark, when used on its goods not produced in Scotland, constitutes a false designation of geographic origin and misleads the public as to the nature and characteristics of said goods in violation of Articles 10 and 10bis of the Paris Convention as implemented by Sections 44(b) and (h) of the Trademark Act.

 

 

 Respondent, in its answer, has admitted that it is using its mark for whisky not produced in Scotland but otherwise denied the salient allegations of the petition to cancel. Additionally, respondent raised several defenses, namely, (i) that respondent's labels clearly identify the Canadian origin of respondent's product; (ii) that respondent's labeling was approved by the U.S. Bureau of Alcohol, Tobacco, and Firearms (BATF) thus constituting BATF's determination that respondent's labeling was lawful and specifically that it complied with Federal Alcohol Administration Act regulations on geographic origins and the prohibition against brand names creating any misleading impression as to origin; (iii) that the Board has no subject matter jurisdiction over petitioner's claim for relief under Articles 10 and 10bis, or any claim of unfair competition under the Trademark Act; and (iv) that petitioner lacks standing to petition to cancel.

 

 

  *2 On April 20, 1989 the Board mailed the initial trial order with discovery then set to close in this case on July 20, 1989.

 

 

 This case now comes up on petitioner's motion (filed June 26, 1989 via a certificate of mailing) to strike respondent's four affirmative defenses under Fed.R.Civ.P. 12(f); and respondent's motion (filed June 28, 1989 via a certificate of mailing) for judgment on the pleadings under Fed.R.Civ.P. 12(c). [FN1]

 

 

 We turn first to respondent's motion for judgment on the pleadings. In support of its motion respondent contends that its mark cannot convey a Scottish origin of the goods because the surname prefix "Mc" is Irish, not Scottish, and because the label on respondent's goods clearly designates Canada as the source of the goods; [FN2] that BATF label approval is persuasive that respondent's use of its mark does not convey an erroneous impression as to origin; [FN3] that the Board has no subject matter jurisdiction over petitioner's claim of violation of Articles 10 and 10bis of the Paris Convention, or over any Section 43(a) (Trademark Act) claim of unfair competition; and that therefore on the face of the pleadings, respondent is entitled to judgment dismissing the petition to cancel.

 

 

 Petitioner argues in opposition thereto that respondent has not met the heavy burden necessary to dismiss a case for failure to state a claim; that petitioner has pleaded a proper deceptiveness claim under Section 2(a) of the Trademark Act, namely whether the mark misdescribes the goods, whether anyone would be likely to believe the misrepresentation, and whether the misrepresentation would materially alter the decision to purchase the goods; that if the mark causes the public to falsely believe that respondent's whisky has a place of origin in Scotland and that geographic origin is a material factor to them, the mark is deceptive and unregistrable; that when a party registers a word mark in block letters, [FN4] that party cannot rely on the form or manner in which it actually uses the mark to attempt to prove absence of deception and respondent's purported actual use is irrelevant to this proceeding; that BATF label approval is irrelevant to the issue of trademark registrability; [FN5] that the "facts" alleged in respondent's answer may not be relied on for purposes of the motion for judgment because under Fed.R.Civ.P. 8(d) said facts are deemed denied and cannot be taken as true; that respondent's claim of lack of subject matter jurisdiction over the Article 10 and 10bis claims relies on a decision reversed on appeal; [FN6] and that the Board necessarily has subject matter jurisdiction over claims arising under the provisions of the Paris Convention pursuant to the case of Masters, Wardens, Searchers, Assistants and Commonalty of the Company of Cutlers in Hallamshire, York County v. Cribben & Sexton Co., 202 F.2d 779, 97 USPQ 153 (CCPA 1953). Petitioner specifically requested leave to amend the pleadings if the Board finds any deficiency therein.

 

 

  *3 In reviewing a pleading for purposes of a motion to dismiss for failure to state a claim upon which relief can be granted, the Board must assume that all of petitioner's well pleaded allegations are true and construe the petition to cancel in a light most favorable to petitioner. Dismissal will be granted only if it appears that petitioner is entitled to no relief under any set of facts which could be proved in support of its claim. Stanspec Co. v. American Chain & Cable Co., Inc., 531 F.2d 563, 189 USPQ 420 (CCPA 1976). Consequently, in order to withstand respondent's motion to dismiss for failure to state a claim upon which relief can be granted, petitioner need only allege in the petition to cancel such facts as would, if proved, establish that petitioner has standing to challenge respondent's right to maintain its registration and set forth a statutory ground for cancelling the registration. See Lipton Industries, Inc. v. Ralston Purina Co., 670 F.2d 1029, 213 USPQ 185 (CCPA 1982).

 

 

 Respondent has raised no question as to petitioner's standing, and the Board is of the opinion that petitioner clearly has alleged sufficient facts to show standing. See Jewelers Vigilance Committee, Inc. v. Ulhenberg Corp., 853 F.2d 888, 7 USPQ2d 1628 (Fed.Cir.1988).

 

 

 The issue before us is whether petitioner has pleaded sufficient facts to set forth either or both of its grounds to cancel, [ (i) Section 2(a)-deceptive, and/or (ii) Article 10 and 10bis of the Paris Convention-unfair competition].

 

 

I. Geographic Deceptiveness [Section 2(a) ]

 

 

 To maintain a claim of geographical deceptiveness grounded in Section 2(a), facts must be alleged which, if proved, would establish that the mark MCADAMS (stylized) is geographically misdescriptive as applied to whisky, that purchasers will believe the misrepresentation, and that the misrepresentation is a material factor in the decision to purchase. See In re House of Windsor, Inc., 221 USPQ 53 (TTAB 1983); and In re Quady Winery, Incorporated, supra.

 

 

 Petitioner has alleged that whisky produced in Scotland enjoys substantial prestige and salability, [FN7] thus making its geographical source a material factor in its purchase, but that respondent's whisky is not produced there. [FN8] Petitioner has not alleged, however, that the surname MCADAMS would be perceived by the relevant purchasing public as a geographical designation, and that respondent's goods would be perceived to come from the country involved (Scotland). See The Scotch Whisky Association v. Consolidated Distilled Products Inc., ---F.2d---, 209 USPQ 130 (ND Ill.1980). (It appears that the primary significance of the mark MCADAMS is that of a surname and its geographical significance, if any, is limited to the fact that it may be suggestive of an Irish and/or Scottish family name.)

 

 

  *4 The mere fact that a mark is evocative, or suggestive, of a particular foreign country, however, does not render the mark geographically deceptive under Section 2(a). See National Lead Co. v. Wolfe, 223 F.2d 195, 105 USPQ 462 (9th Cir.1955), cert. denied, 350 U.S. 883, 107 USPQ 362 (1955) (DUTCH BOY for paint); and Hyde Park Clothes, Inc. v. Hyde Park Fashions, Inc. 93 USPQ 250 (SDNY 1951), aff'd, 204 F.2d 223, 97 USPQ 246 (2d Cir.1953), cert. denied, 346 U.S. 827, 99 USPQ 491 (1953) (HYDE PARK for men's suits). Petitioner submitted no pleading or argument that the surname MCADAMS is perceived by the purchasing public as a geographical term referring to Scotland. That is, there is no pleading of facts connecting the surname MCADAMS with a geographical place. Petitioner instead, relies on the case of The Scotch Whisky Association v. Consolidated Distilled Products, Inc., 210 USPQ 639 (ND Ill.1981), rev'g 204 USPQ 57 (TTAB 1979), which the Board declines to follow in light of the case law just cited and the standards set forth in the case of In re Nantucket, 677 F.2d 95, 213 USPQ 889 (CCPA 1982). Therefore, the pleading of the claim of geographical deceptiveness is considered insufficient as a matter of law.

 

 

II. Paris Convention (Article 10 and 10bis).

 

 

 The Board agrees with respondent's argument that Articles 10 and 10bis of the Paris Convention for the Protection of Industrial Property do not afford petitioner a direct cause of action. Basic to international law is the principle that personal rights derived from conventions and treaties cannot be asserted unless implemented at the domestic level, either by national legislation or self-implementation. Article 25(1), which provides that "[a]ny country party to this convention undertakes to adopt, in accordance with its constitution, the measures necessary to ensure the application of this Convention," indicates that the provisions of Articles 10 and 10bis regarding unfair competition must be implemented through national legislation.

 

 

 However, it is also true, as the Board stated in the case of Person's Co. Ltd. v. Christman, 10 USPQ2d 1634 (1989), that the Board has no jurisdiction over basic claims of unfair competition, but rather our jurisdiction extends only to the right to federal trademark registration. The Board went on to explain as follows:

   There can be no question, however, but that we are bound by the language of the Paris Convention concerning unfair competition as it relates to registration of trademarks in the U.S. In this regard unfair acts within the meaning of the treaty could have a role in determining registrability in the United States. Such acts could preclude a finding of good faith adoption and use under certain circumstances.

*5 Thus, while the Board cannot entertain an unfair competition claim under Article 10 and 10bis as a separate ground, the Board can consider unfair acts within the meaning of the treaty in determining registrability.

 

 

 However, in this case petitioner has pleaded no facts which state either a separate ground for cancellation, or a ground to cancel which we can recognize and then allow the Article 10 and 10bis claim as it relates thereto. (Specifically, petitioner's claim under Section 2(a) is legally insufficient and petitioner has pleaded no facts regarding the acts of unfair competition under Articles 10 and 10bis from which the Board could piece together such a separate claim.) Therefore, the pleading of the claim under Article 10 and 10bis is considered insufficient as a matter of law.

 

 

 The Board hereby grants petitioner's request that it be allowed to amend its pleading if the original is found deficient. Accordingly, petitioner is now allowed until twenty days from the date hereof in which to submit an amended petition to cancel, failing which respondent's motion to dismiss will be granted. [FN9] The Board emphasizes that any amended pleading regarding the alleged geographical nature of the mark MCADAMS and the Article 10 and 10bis unfair competition must be made in good faith under Fed.R.Civ.P. 11. [FN10]

 

 

J. D. Sams

 

 

R. L. Simms

 

 

T. J. Quinn

 

 

Members, Trademark Trial and Appeal Board

 

 

FN1. Respondent's motion will be treated as a motion under Fed.R.Civ.P. 12(h)(2) to dismiss for failure to state a claim. To the extent that the motion could be construed as one for judgment on the pleadings, the motion is clearly not well taken. A motion for judgment on the pleadings must be sustained by the undisputed facts in all the pleadings, supplemented by any facts of which the Board will take judicial notice. 2 A Moore's Federal Practice, Section 12.15 (2d ed. 1983). In view of the denials in the answer, the motion for judgment on the pleadings is denied.

 

 

FN2. Respondent's labeling on the goods is reproduced below (in reduced form):

 

 

TABULAR OR GRAPHIC MATERIAL SET FORTH AT THIS POINT IS NOT DISPLAYABLE  

 

 

FN3. Respondent refers in its motion to petitioner's allegations of deception and geographic misdescriptiveness. To clarify the record, petitioner has not alleged geographic misdescriptiveness under Section 2(e)(2) of the Trademark Act in its petition to cancel.

 

 

FN4. Respondent's mark is not in block letters, it is in a stylized form.

 

 

FN5. Petitioner specifically argues that the BATF label approval is not properly in evidence and cannot be considered for purposes of this motion. The Board agrees with petitioner and respondent's BATF label approval has not been considered in reaching the decision herein. See In re Quady Winery Incorporated, 221 USPQ 1213 (TTAB 1984).

 

 

FN6. The Scotch Whisky Association v. Consolidated Distilled Products, Inc., 204 USPQ 57 (TTAB 1979); The Scotch Whisky Association v. Consolidated Distilled Products, Inc., 210 USPQ 639 (ND Ill.1981).

 

 

FN7. Petition to cancel at paragraph 2.

 

 

FN8. Id., at paragraph 6.

 

 

FN9. Petitioner places much emphasis on whether the Board may consider respondent's labels in determining this motion. The Board did not need to consider respondent's labels in reaching the decision that petitioner's Section 2(a) deceptive claim is legally insufficient. However, the Board is of the opinion that consideration of respondent's labels would, in fact, be proper to the extent that trade dress may provide evidence of the impression a mark projects. See Specialty Brands, Inc. v. Coffee Bean Distributors, Inc., --- F.2d---, 223 USPQ 1281 (Fed.Cir.1984); The Falk Corporation v. Toro Manufacturing Company, 493 F.2d 1372, 181 USPQ 462 (CCPA 1974); and Steelcase Inc. v. Steelcare Inc., 219 USPQ 433 (TTAB 1983).

 

 

FN10. If petitioner files an amended pleading, then petitioner's motion to strike respondent's defenses (paragraphs 5-8) will be decided at the appropriate time in this case.

 

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