When it comes to trademark law, federal registration is a vital step. Although it is possible to have common law or establish state rights in a mark, obtaining a registration from the United States Patent and Trademark Office (USPTO) offers invaluable advantages.

Registration, for example, puts the entire country on constructive notice of one’s claim to a mark and creates a presumption of ownership and exclusive rights to the mark within the parameters of the stated goods or services in the registration.

In a recent Court of Appeals for the Federal Circuit decision, Meenaxi Enterprise, Inc. v. Coca-Cola Company, Meenaxi’s registrations for two marks, THUMS UP and LIMCA, were restored after Coca-Cola had had those registrations canceled by the Trademark Trial and Appeal Board (TTAB) based on the beverage giant’s use of identical marks in other territories.

This case highlights the importance of obtaining trademark registration promptly and in as many territories as needed to protect a mark in a global economy. Failure to do so may present challenging scenarios, as it did for Coca-Cola, to prove economic and reputational harm caused by a competitor’s superior registration.

Background

In 1993, Coca-Cola purchased Parle (Exports), Limited of Bombay, India, the maker of two popular soft drinks, THUMS UP cola and LIMCA lemon-lime soda.

Despite their popularity in India and other countries across Asia and Africa, Coca-Cola never widely offered the two soft drinks for sale in the United States. The cola is featured in Coca-Cola’s “World of Coca-Cola” and “Coca-Cola Store” locations in Atlanta and Orlando, but this narrow use was considered de minimis.

Rather, third parties who purchased the products in India imported the drinks into the U.S. and resold them in grocery stores, restaurants, and other retail outlets servicing the Indian community in the U.S.

Coca-Cola owns registrations for the THUMS UP and LIMCA marks in India, however there was no evidence proffered to suggest that Coca-Cola attempted to obtain registrations for either mark in the United States.

Meenaxi has been selling its own cola and lemon-lime sodas in the U.S. under the marks THUMS UP and LIMCA since 2008, and in 2012, the USPTO granted Meenaxi registrations for the two marks.

TTAB Proceeding

In 2016, Coca-Cola brought a claim under § 14(3) of the Lanham Act to cancel Meenaxi's THUMS UP and LIMCA registrations for misrepresentation of source.

In 2019, the TTAB sided with Coca-Cola. The TTAB found that Meenaxi’s business model is to copy popular Indian brands and products and sell them to Indian-American consumers. The TTAB held that Coca-Cola had a statutory cause of action to challenge Meenaxi's trademark registrations, and that “Meenaxi was attempting ‘to dupe consumers in the United States who were familiar with [Coca-Cola's] THUMS UP cola from India into believing that [Meenaxi's] THUMS UP cola was the same drink,’ and that these efforts to deceive satisfied the misrepresentation of source claim.”

The THUMS UP and LIMCA marks were not the only Indian brands that Meenaxi copied and reproduced in the U.S. Other Meenaxi marks, including NUTRELA, RASNA, and REAL NAMKEEN have been challenged in the U.S., resulting in the cancellation or abandonment of Meenaxi’s registrations or applications.

Meenaxi’s Appeal

Meenaxi appealed, and the court of appeals reversed, holding that Coca-Cola had not established that it had a cause of action under § 14(3) of the Lanham Act.

Citing the Supreme Court's decision in Lexmark International, Inc. v. Static Control Components, Inc. (2014), the court stated that “entitlement to a statutory cause of action under the Lanham Act requires demonstrating (1) an interest falling within the zone of interests protected by the Lanham Act and (2) an injury proximately caused by a violation of the Act.”

In other words, Coca-Cola’s claim required a showing of an injury to a commercial interest, such as lost sales, and damage to its business reputation, which generally occurs “when deception of consumers causes them to withhold trade from the plaintiff.” The TTAB had accepted Coca-Cola’s assertions that Meenaxi’s actions resulted in such injury, but the court of appeals called these conclusions “stereotyped speculation.”

Meenaxi argued, and the court of appeals agreed, that Coca-Cola failed to show any evidence of lost sales. Coca-Cola offered testimony that THUMS UP-branded and LIMCA-branded products are resold in Indian grocery stores in the U.S., but the court rejected this reasoning because third-party sales did not establish sales lost by Coca-Cola.

The court further agreed with Meenaxi that Coca-Cola equally failed to demonstrate any reputational injury in the U.S. Coca-Cola relied on, and the court rejected, two arguments that were disregarded as unsupported assumptions: “(1) members of the Indian-American community in the United States were aware of the THUMS UP and LIMCA marks, and (2) Meenaxi traded on Coca-Cola's goodwill with Indian-American consumers in those marks by misleading them into thinking that Meenaxi's beverages were the same as those sold by Coca-Cola.”

Coca-Cola failed to present any survey results or other evidence showing brand awareness of either mark in the U.S., and any awareness abroad, no matter how vast, was not relevant. Had Coca-Cola conducted a survey and proved that consumers in the U.S. were aware of its Indian brands, it very well may have established the required statutory standing to sustain its claim.

Coca-Cola also chose to waive reliance on the famous-mark exception of the territoriality doctrine. Typically, a trademark is recognized as having a separate existence in each sovereign territory in which it is registered or legally recognized as a mark. This exception, however, applies to marks that are sufficiently well-known in a territory despite a lack of registration or sufficient use in that territory. Had Coca-Cola pursued the famous-mark exception, it may have had a stronger argument to protect its THUMS UP and LIMCA marks.

In conclusion, the court of appeals found that the evidence did not support the TTAB’s holding that the reputations of Coca-Cola's THUMS UP and LIMCA marks extended to the U.S. Therefore, Coca-Cola had not established injury in the U.S. and could not sustain a cause of action under § 14(3) of the Lanham Act.

Conclusion

This case highlights an intriguing trademark law scenario. Despite having neither use nor registration for the marks in the U.S., Coca-Cola sought to cancel Meenaxi’s registrations, previously granted by the USPTO, for the supposed injury to marks that Coca-Cola owned in other countries.

Coca-Cola failed to obtain U.S. registrations, notwithstanding the beverage giant had nearly two decades to make use of the marks and secure its rights, but its disregard for their value and delay in acquiring the registrations allowed a competitor to achieve priority.

From Coca-Cola’s perspective, it may well have suffered as Meenaxi poached its marks. The facts in this case and other proceedings show that Meenaxi intentionally adopted the logos and slogans of well-known Indian goods as to which Coca-Cola owned registration rights in India, so as to reproduce them in the United States.

From a legal perspective, however, absent a showing of economic and reputational harm in the U.S., Meenaxi’s actions, as a matter of law, were entirely permissible and its registrations remain in full force while Coca-Cola lost its chance to market its soft drinks under the marks in the U.S.

The power of a trademark registration cannot be understated. When seeking to protect a brand and its marks, registration should be an early step. If missed, it may open the brand up to the exact vulnerabilities that trademark law was created to prevent.