During examination and appeal, the PTO argued that the "person" or "institution" referred to in the mark is the nation of China. Although at oral argument the PTO contended that the mark would also disparage the Chinese people, that issue was not raised previously and so it was not considered by the Board.
Applicant argued that Section 2(a) does not apply because China is not a "person" or "institution" within the meaning of the statute. The Board was "skeptical" of this position in light of the Lanham Act's definition of "person" and in light of the CAFC's Shinnecock Smoke Shop decision finding that the Shinnecock Indian Nation was an institution for purposes of Section 2(a). The Board chose to assume that China is a person or institution falling with the Section, because it did not matter to the result here.
Applicant also argued that Section 2(a) is an unconstitutional abridgement of free speech. The cases that Applicant cited for this proposition were inapposite. Moreover, the Board is not an Article III court and has no authority to declare provisions of the Lanham Act unconstitutional.
The Board noted that the disclaimer of the words CHINA FREE does not avoid the Section 2(a) prohibition, nor does the inclusion of the design element in the mark. There was no dispute that as to the immediate meaning of the mark: it informs the consumer that Applicant's goods do not contain ingredients from China.
The question, then, was whether the mark is disparaging. That determination requires a two-part inquiry: first, what is the likely meaning of the mark, and second, is that meaning disparaging to a substantial composite of the group referenced by the mark?
Unlike other terms found to be disparaging (e.g., SQUAW, HEEB, SEX ROD), CHINA FREE is not disparaging or derogatory in itself. It is the implication of the mark that causes the concern. The PTO contended that the mark suggests that there is something wrong with ingredients from China, and by extension that "China is therefore to be held in a dim view." According to the PTO, Applicant's products are "directed to a market segment that is full of paranoia about the nation of China and products made in China."
Applicant, however, contended that consumers have legitimate concerns about the wholesomeness of some products from China. The Board found evidence of a substantial public concern regarding the safety of food and pharmaceuticals imported from China.
Applicant's website may be "rather strident, one-sided, and somewhat alarmist," but the Board did not see it as "promoting a stereotype that ALL Chinese manufacturers make poor quality products." In sum, the Board found no clear evidence that Applicant's motivation is to disparage China." [Why is motivation relevant, you may ask? Because it sheds some light on what meaning is to be given to the term(s) at issue. - ed.].
Most importantly, the Board found little or no evidence as to whether the People's Republic of China would find CHINA FREE disparaging when used on nutritional supplements. In the SQUAW case, the Board relied on dictionary definitions noting the word as offensive and disparaging, on statements from Native American activists and from legislators, and on a number of articles indicating that many Native Americans find "squaw" to be disparaging. Here, the best evidence was a definition of "free" [as lacking something unpleasant], but there was no indication that this word, by itself, is derogatory.
While we do not rule out the possibility that the term might be used here with the intent to slight China or that it might be perceived by China in such a way, it is also possible that it is not. As the Federal Circuit has emphasized, the touchstone of disparagement is the meaning of the mark to the referenced group. *** And whatever we may think of applicant’s mark, the opinion of the Office or of this Board is no substitute for evidence (direct or indirect) of the opinion of the relevant individual or group.
The Board was not free from doubt, but it must resolve its doubts in favor of the Applicant. It noted that a different result might result from a more fully developed record, such as might be made in an inter partes proceeding.
TTABlog comment: An interesting, thoughtful, and readable opinion that provides an informative survey of Section 2(a) disparagement law.
Note that Applicant disclaimed CHINA TRADE, but the mark was still eligible for the Principal Register. In other words, the minimal design was sufficiently distinctive to merit a Principal Registration. Really? I beg to disagree.
Text Copyright John L. Welch 2012.
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