Battle of the Beverages: The Zero-Sum Game for the Zero Trademark

Battle of the Beverages: The Zero-Sum Game for the Zero Trademark

By: Brendan Goodwine and Jacqueline Kett

In efforts to address widespread health concerns and general outcry against soft beverages, many beverage companies have in recent years focused efforts on developing drinks with fewer, or zero, calories. This has resulted in marketing trends utilizing terms like “zero” or “diet.”

Over the past 15 years, soft beverage company Royal Crown Co. has been engaged in a fierce legal battle with Coca-Cola Co. (“Coke”) over the trademark ZERO. This feud started in 2005, when several of Coke’s competitors, including Royal Crown, filed trademark applications for beverages using the term ZERO. These applications were rejected by the USPTO on the basis that ZERO was a generic term to describe a minimal or zero calorie drink. A few months later, Coke filed 16 different trademark applications for products that included the term ZERO. When the USPTO responded the same way as it had for Coke’s competitors, Coke instead argued that ZERO was a term that consumers recognized and found distinct to its brand — after all, this was the same year that Coke Zero hit the shelves. The USPTO agreed with this argument and withdrew its request for Coke to disclaim ZERO.

Understandably upset, Royal Crown filed an opposition to the registration of Coke’s ZERO applications in Trademark Trial and Appeal Board, alleging that Coke should not be able to obtain trademark protection for the alleged-generic term ZERO.[1]

But What Are Generic Terms?

Generic terms are words directly associated with a general class of products or services. These terms are not eligible for trademark protection as they are generally applicable to most, if not all, products in a class or category.[2] So, if the term ZERO is generic, it could not be owned by any one company, but could be used freely by all.

An otherwise registered term can become generic and lose trademark protection.[3] Oftentimes, this occurs with products that have so large a share of the market that the term is understood to represent an entire class of products. Terms that once held trademark status and have since become generic in the United States include aspirin, cellophane, and escalator.[4]

The Case Continues

Initially, Royal Crown had filed oppositions against each of Coke’s 16 ZERO formative trademark applications. In these oppositions, Royal Crown requested two forms of relief: 1) a disclaimer of the term ZERO from Coke’s pending marks; and 2) a judgment that the term ZERO was generic when used to describe soft beverages. These oppositions were later consolidated and after filing an amended notice of opposition, Royal Crown pursued only a disclaimer.

Following years of litigation before the Trademark Trial and Appeal Board (TTAB) finally culminating in a 2016 decision in favor of Coke, the Federal Circuit vacated and remanded that decision in 2018 on grounds that the TTAB had applied the wrong legal standard to determine whether ZERO was generic.[5] While the case was on remand in the TTAB, and because a disclaimer of the term ZERO was the only relief requested by Royal Crown, Coke filed a motion to amend its applications to disclaim the term ZERO and urged the Board to dismiss the opposition. The Board agreed with Coke, granting the motion and dismissing Royal Crown’s opposition.

From Royal Crown’s perspective, the fight for ZERO seemed to be a zero-sum game. Unhappy and unwilling to accept the Federal Circuit’s refusal to declare ZERO generic when used to describe beverages, Royal Crown again appealed to the Federal Circuit. In this appeal, Royal Crown asked the Court to explicitly declare the mark ZERO generic when used in connection with low-calorie beverages. Although Coke had disclaimed the word ZERO, Royal Crown was likely concerned that Coke would either attempt to expand the scope of the trademarks to otherwise encapsulate the ZERO message or later attempt to claim acquired distinctiveness.

On August 3, 2020, the Federal Circuit issued a decision ruling on Royal Crown’s appeal, in which the Court held that Royal Crown’s appeal was moot. In an apparent case of “be-careful-what-you-wish-for”, the Federal Circuit found that Royal Crown had already gotten the only relief it had asked for in the consolidated opposition — Coke disclaiming the word ZERO in its trademark applications. Thus, there was nothing more for the Federal Circuit to do.

The Future of ZERO

Ultimately 15 years later, we are still no closer to determining whether ZERO is a generic term. The Federal Circuit’s avoidance in addressing the question leaves a lot on the table for new trademark applications. Without clearer standards on what constitutes a generic term, it leaves a frustrating reminder that trademark prosecution can at times be long and arduous.

While this case certainly leads to no satisfactory conclusion for any party, it underscores the importance of considering a client’s desired outcome prior to requesting relief. With more than a decade fighting for Coke to disclaim the word ZERO, Royal Crown was granted the relief it requested, but seemingly not all it wanted. In requesting relief, it is important to be mindful of a client’s objectives both in and out of the courtroom. As for ZERO, until the term is officially declared generic, soft beverage companies can try to include the term in their marks. But perhaps Royal Crown was right, and the quest for the ZERO term to be found generic is a zero-sum game.

[1] 91178927-OPP filed Aug. 14, 2007.

[2] Trademark Manual of Examining Procedure, § 1209.01(c).

[3] See 2 McCarthy on Trademarks § 12.18 (listing dozens of terms “held to be generic and unprotectable as valid marks”).

[4] See Bayer Co. v. United Drug Co., 272 F. 505 (S.D.N.Y. 1921); DuPont Cellophane Co., Inc. v. Waxed Products Co., Inc.,85 F.2d 75 (2d Cir. 1936); Haughton Elevator Co. v. Seeberger (Otis Elevator Co. substituted) 85 U.S.P.Q. 80 (Com’r Pat. & Trademarks) (1950).

[5] Royal Crown Co., Inc., v. Coca-Cola Co., 892 F.3d 1358 (Fed. Cir. 2018).