Trademark acknowledges no territorial boundaries of municipalities or states or nations: United States Court of Appeals

Trademark acknowledges no territorial boundaries of municipalities or states or nations: United States Court of Appeals

The United States Court of Appeals for the Federal Circuit has observed that trade-mark acknowledges no territorial boundaries of municipalities or states or nations, but extends to every market where the trader's goods have become known and identified by his use of the mark. But the mark, of itself, cannot travel to markets where there is no article to wear the badge and no trader to offer the article.

As to the facts of the case, Meenaxi Enterprise, Inc. ("Meenaxi") had been distributing a Thums Up cola and a Limca lemon-lime soda in the United States since 2008 and registered the THUMS UP and LIMCA marks in the United States in 2012. Coca-Cola brought cancellation proceedings under § 14(3) of the Lanham Act, 15 U.S.C. § 1064(3), asserting that Meenaxi was using the marks to misrepresent the source of its goods. The Trademark Trial and Appeal Board ("Board") held in Coca-Cola's favor and cancelled Meenaxi's marks.

Coca-Cola Co filed a trademark suit for canceling the registration of U.S trademarks owned by Meenaxi Enterprise for Thums Up and Limca, which Coca-Cola sells in India. The Federal Court held that Coca-Cola Co's sales of Thums Up and Limca sodas in India and other countries did not justify canceling another company's U.S. trademarks for soft drinks with the same name.

The Court held that Coca-Cola failed to prove that it suffered any harm in the US that would justify challenging Meenaxi.

Thumbs Up and Limca are sold extensively in India and other countries in Asia and Africa. Coca-Cola also said importers have been selling them in America since at least 2005.

Meenaxi has been selling drinks with the same name to Indian grocers in the United States since 2008 and received federal trademarks for them in 2012. Coca-Cola asked the U.S. Patent and Trademark Office to cancel the registrations in 2016.

The Trademark Trial and Appeal Board found Coca-Cola could file the case on the grounds that Meenaxi's products could harm the reputation of its drinks among Indian-Americans. It canceled the registrations after finding Meenaxi was trying to "dupe" U.S. consumers.

On appeal, Meenaxi argued that Coca-Cola lacks any cause of action under the Lanham Act because of the territoriality principle.

According to the Court, Meenaxi was correct that the territoriality principle is well established in trademark law: "Under the territoriality doctrine, a trademark is recognized as having a separate existence in each sovereign territory in which it is registered or legally recognized as a mark."

The Court reiterated the US Supreme Court's observation that registered or legally recognized as a mark it is the: trade, and not the mark, that is to be protected, a trade-mark acknowledges no territorial boundaries of municipalities or states or nations, but extends to every market where the trader's goods have become known and identified by his use of the mark. But the mark, of itself, cannot travel to markets where there is no article to wear the badge and no trader to offer the article."

In response to that, the Federal Circuit stated that the board erred in letting Coca-Cola challenge the trademarks because the company did not show it had been injured in the United States.

It was noted by the Court that Coca-Cola does not sell the drinks widely in America and did not demonstrate any lost sales from Meenaxi's products. Sales of the drinks by third-party importers also did not establish standing for the company under trademark law.

Coca-Cola maintained that it experienced reputational injury in the United States because firstly, members of the Indian-American community in the United States were aware of the THUMS UP and LIMCA marks and secondly 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 in India. To this, the Court answered saying that "There is no basis to assume that an American of Indian descent is aware of brands in India. The Board did not consider what portion of Indian Americans had spent time in India, i.e., how many had visited India or lived in India."

The Court was of the opinion that the alleged harm to Coca-Cola's reputation among the Indian-American community could not sustain the case either. The Federal Circuit said there was "no basis to assume that an American of Indian descent is aware of brands in India," and the board's opposite conclusion relied "at least in part on stereotyped speculation."

The present petition was thereby dismissed.