4th Circuit Vacates “Moke” Trademark Ruling

The Fourth Circuit has vacated and remanded an opinion by a lower court finding that the term “MOKE” is a generic term for the style of vehicles sold by both of the parties to the dispute.

The case is Moke America LLC v. Moke International Ltd.

As the court explained, the parties are competing for the United States trademark rights to “the 'MOKE' mark adorning the similar low-speed, open-air vehicles that they each sell.”

The parties both argued on appeal that the term “Moke” isn’t a generic term for the type of vehicle, and thus can’t be a trademark.

As the court noted, ‘to qualify as a valid and protectable trademark, a designation “must be used to identify the source of the goods to potential customers.”’

Unless a designation is “distinctive” within the meaning of trademark law, it does not perform the job of identification and thus cannot be “a legally protectable ‘mark,’” said the court.

Three types of marks are considered “inherently distinctive and therefore valid without the holder having to make any other showing.”

Those three types of trademarks are “arbitrary,” “fanciful,” and “suggestive.”

• “Arbitrary” marks are “based on existing words used in ways unconnected with their common meaning, such as APPLE computer or SHELL gasoline.”

• “‘Fanciful” marks are made-up words such as KODAK or EXXON.”

• “Suggestive” marks are those that “connote, without describing, some quality, ingredient, or characteristic of the product, such as L’EGGS pantyhose and GLASS DOCTOR window repair.”

Another type of trademark is called “descriptive.” Such marks “merely describe a function, use, characteristic, size, or intended purpose of the product, such as YELLOW PAGES telephone directories and 5 MINUTE glue.”

A descriptive mark isn’t inherently distinctive but is eligible for protection if it has “acquired a ‘secondary meaning.’”

A descriptive mark is said to have secondary meaning “if in the minds of the public, the primary significance of [the mark] is to identify the source of the product rather than the product itself.”

For example, the descriptive words “holiday” and “inn” were found to have secondary meaning denoting the Holiday Inn motel chain after decades of use.

Other examples of descriptive terms becoming trademarks are Band-Aid and ChapStick.

Finally, the court noted that there are “generic” terms that always lack distinctiveness and, therefore, “can never be trademarks.”

For example, said the court,

Examples of brand names held to be ‘generic’ terms are CONVENIENT STORE retail stores, DRY ICE solid carbon dioxide, and LIGHT BEER ale-type beverages.

Generic trademarks are prohibited because

…by withholding validity and protectability from generic terms, the law of trademarks “protects for public use those commonly used words and phrases that the public has adopted, denying to any one competitor a right to corner those words and phrases by expropriating them from the public ‘linguistic commons.’

The court also noted that through a process sometimes called “genericide,” marks that begin as inherently distinctive may become generic as a result of the public’s pervasive use of them.

Examples of this include THERMOS, ASPIRIN, CELLOPHANE, and ESCALATOR – terms that once identified the SOURCE of a product and now only identify a TYPE of product.

In this case, in 2015, another entity related to Moke International and Moke USA asserted ownership of the MOKE mark and applied for its registration with the US Patent and Trademark Office (USPTO).

The USPTO published the MOKE mark in 2016. Moke America then filed a notice of opposition to the proposed registration, claiming ownership of the MOKE mark based on priority of use.

After several years of proceedings before the Trademark Trial and Appeal Board (TTAB or Board), the TTAB dismissed Moke America’s opposition in 2020.

The Federal Circuit noted that “no question of genericness was raised in the PTO proceedings by the PTO examining attorney.”

Also,

the TTAB decision left pending the registration application benefiting Moke International and Moke USA, such that the MOKE mark has remained unregistered.

Moke America then turned to the federal district court in 2020. Moke America sought a declaration of its trademark ownership and asserted a trademark infringement claim against Moke International and Moke USA.

Moke International and Moke USA counterclaimed, sought a declaration of their trademark ownership, and alleged that Moke America had engaged in trademark infringement.

The court noted that “each party must prove not only priority of use, but also the MOKE mark’s distinctiveness.”

Also, said the court,

the trademark infringement claims necessitate a showing by each party that the other party’s use of the MOKE mark creates a likelihood of consumer confusion.

Before the district court’s bench trial, the parties agreed that the only issue was priority of use, i.e., which of them first used MOKE as a trademark in the sale of goods.

The circuit court noted that

The parties ignored the question of the MOKE mark’s distinctiveness, and they agreed that the use of MOKE by whichever of them is not the mark’s owner creates a likelihood of consumer confusion.

That is,

they had never “mentioned the category of mark — fanciful, arbitrary, suggestive, descriptive or generic — into which the MOKE mark falls.”

At trial,

Moke America asserted that the district court’s adverse priority-of-use determination was premised on an implicit finding that, rather than being fanciful, arbitrary, or suggestive and thus inherently distinctive and presumptively valid and protectable, the MOKE mark is descriptive and therefore eligible for trademark protection only with proof of secondary meaning. Under Moke America’s theory, the court could not rule in favor of Moke International and Moke USA on their trademark infringement counterclaim unless and until they demonstrated secondary meaning, i.e., that in the minds of the public, the primary significance of the MOKE mark is to identify Moke International and Moke USA as the source of the MOKE-adorned vehicles.

The trial court judge,

Having determined that Moke America indeed failed to prove its priority of use, and relying on Moke America’s “pretrial representations that a finding against it regarding priority of use would resolve all claims and counterclaims,” the court resolved to rule against Moke America on all three of its claims and to rule in favor of Moke International and Moke USA on two of their three counterclaims — all but their counterclaim for trademark infringement.

In a post-trial ruling, the lower court found, contrary to the unanimous position of the parties, that MOKE is a generic term for the parties’ vehicles and therefore can’t be a trademark.

Said the Federal Circuit,

because neither party took the position [at trial] that MOKE is a generic term or seriously endeavored to prove otherwise, there is a dearth of relevant evidence in the record. Accordingly, we vacate and remand for further proceedings.