What But Dazed Bemusement Can Greet Board Ruling on Rolling Papers?

See 1.0, 1.25, 1.5, and 2.0 and what comes to mind? Decimals? Middle-school math? Ask me and the answer would be nothing. I've no idea what those numbers mean. Then again, I'm not a smoker—and I don't roll my own.

Maybe, just maybe, the justices of the TTAB do. Or maybe they're just more aware than the rest of us of the finer points of the sizes of cigarette rolling papers.

That's just speculation, of course. But mid-year last year, in deciding a consolidated opposition and cancellation proceeding that had commenced in 2003 in North Atlantic Operating Co., Inc., North Atlantic Trading Co., Inc. and Nat. Tobacco Co., LP v. DRL Enter., Inc., Opp. No. 91158276 et al. (July 1, 2016), the Board found 1.0, 1.25 and 1.5 to be generic for rolling papers.

North Atlantic et al. v. DRL Enter concerned the defendant's marks 1.0, 1.25, 1.5, and 2.0, in standard character and/or design forms, for cigarette rolling papers and/or cigarettes. The Board found the marks generic for and descriptive of cigarette rolling papers, but extinguished the plaintiff's claims aimed at defendant's cigarettes.

I am not going to discuss all 98 pages of the TTAB's decision because I know you've better things to do. But there are important considerations for trademark practitioners in the decision.

First is the issue of standing, a threshold argument in most oppositions and cancellation actions. In the instant case, the defendant had argued that the plaintiffs had contracted away their standing to bring these proceedings because they were bound by an agreement to distribute only ZIG ZAG branded cigarette papers bought from the manufacturer, Bolloré. Bolloré, argued DRL Enter, had agreed not to use defendant's marks, and to not permit the plaintiffs to use the marks, on ZIG ZAG papers.

The Board disagreed. It felt that the plaintiffs had not entered into that agreement and that even if they had, they could terminate their agreement with Bolloré and find a new supplier of cigarette papers. Thus, the Board held that the plaintiffs' prospective interest in using 1.0, 1.25 and 1.5 for rolling papers sufficed to establish standing.

This holding should not have come as a surprise to DRL's counsel. The Board is typically willing to stretch pretty far to find standing; it wants registrability matters fully vetted rather than to allow marks to register without a proper and thorough examination on the merits.

Second is the issue of the genericness of the applied-for marks. The Board found that customers perceive 1.0, 1.25, and 1.5 to be size designations for rolling papers, and that the defendant uses those designations to indicate size. This was a particularly interesting finding by the Board because there are no industry standards governing the size of rolling papers. Instead, the size generally refers to the surface of the paper.

The Board held that customers perceive 1.0 as a single-width rolling paper, with one at 1.25 being 25% larger, and one at 1.5 being 50% larger, and so on. One may rightfully wonder whether the Board's willingness to find these designations generic may have been prompted, at least in part, based on its finding that the testimony of the defendant's chairman and that of its Vice President and General Counsel was evasive, harassing, and frivolous. The Board explained that these parties refused to answer directly the straightforward questions asked by plaintiff's counsel regarding the defendant's use of the challenged marks, and the relationship of the marks to the size of the rolling papers.

Third, the Board had to address the defendant's argument that its marks had acquired distinctiveness. The Board had to address this issue because it held the defendant's survey evidence to be inconclusive and not of sufficient probative value to support a finding of acquired distinctiveness. The Board deemed the survey defective in that it did not include a properly constructed control to measure noise; it was geographically restricted to the southeastern U.S., where the defendant had its highest market share; the survey used stylized versions of the marks rather than block-form versions; the survey was stale, having been conducted in 2007; the survey's sample sizes were insufficient; and, the survey results did not account for responses identifying a source other than the defendant.

Although the defendant's sales since the product's introduction in 1976 and its advertising figures showed that its rolling papers appeared to be a successful product line, the Board could not find acquired distinctiveness based on this data alone. The Board felt that because the challenged designations were always used with the defendant's JOB trademark, it was not possible to ascertain the recognition on the part of its targeted audiences of the decimal indicators by themselves.

In addition, the testimony of several of the defendant's customers was undercut on cross-examination when they conceded that they perceive the decimal designations as size designations rather than as trademarks. Finally, in an ultimately fruitless effort to rescue its argument, the defendant pointed to its exclusive use of the designations; but the Board found that competitors had acquiesced to the defendant's assertion of its exclusive right to use the decimal designations only to avoid litigation—not because they truly believed in defendant's exclusive right.

(One could wonder how that would ever not be the case. Are not potential defendants always going to agree to things to avoid potential litigation? But I digress.)

Looking at the totality of the evidence, the Board concluded that the defendant had failed to prove acquired distinctiveness.

The most interesting aspect of the Board's holding was that the evidence did not establish that consumers perceived the decimal designations 1.0, 1.25, 1.5, and 2.0 as indicating the size of a cigarette, and said evidence failed to show that the size of a cigarette is a significant factor in a consumer's purchasing decision. In short, the plaintiff did not establish that cigarette size is a distinctive characteristic of a cigarette.

The Board therefore concluded that the challenged designations were not generic for, or merely descriptive of, cigarettes.

Finally, the Board considered and rejected the plaintiff's claim that the defendant lacked a bona fide intent to use the decimal designations for cigarettes at the time it filed the opposed applications. The defendant's testimony regarding the expansion of its product line built on brand loyalty and established trade channels corroborated the statements made in its applications that it had a bona fide intention to use the decimal designations for cigarettes. It had the capacity to market if not manufacture cigarettes, and cigarettes are within the normal zone of expansion for a company that sells cigarette papers.

In sum, the Board found the defendant's decimal designations generic for, and alternatively merely descriptive of, cigarette rolling papers. However, it found the designations not generic for, and not merely descriptive of, cigarettes.

This case provides a number of learning points for practitioners going forward. First, the Board seemed to harp on the believability of the defendant's representative's testimony. One wonders whether the case may have come out differently if the Board had formed a different impression of those representatives. This shows how important it is to carefully select your client's testifying witnesses.

Second, the fact that the Board held these designations generic is an interesting result given that most people would have no idea what those designations represent. The Board made clear that the genericness test does not test random consumers but knowledgeable consumers—important to remember when counseling clients in the future who may argue that only those “in the know” would find your client's mark generic. It is exactly those in the know who matter.

Finally, it is always noteworthy when the Board discusses bona fide intent as it applies to intent-to-use trademark applications. We practitioners are always interested in how much intent is enough to support an intent-to-use application. This opinion stays in the center of existing jurisprudence with respect to bona fide intent. No smoke, no fire; just rollin' along.