What's Your Major Malfunction?: Breaking Down the USPTO’s Strange New Breed of Failure to Function Refusals
John S. Miranda | December 24, 2020
The past several years have seen significant developments in the practice and procedure of the USPTO’s trademark examination corps. Between the U.S. counsel rule, stricter requirements for webpage specimens, and a number of high-profile SCOTUS cases which shook up long-standing doctrine, the ever-shifting trademark landscape has been a boon to the Continuing Legal Education industry. But nothing has trademark practitioners scratching their heads, and frankly, punching holes in their walls, as much as the USPTO’s confounding new approach to Failure to Function (“FTF”) refusals.
According to the Trademark Trial & Appeal Board (TTAB) in the 1976 case of Proctor & Gamble Co. v. Keystone Auto. Warehouse, Inc., a trademark “fails to function” as such when it is not likely to “be recognized in and of itself as an indication of origin for … a particular product.” Put more bluntly by J. Thomas McCarthy, author of the consummate trademark law treatise McCarthy on Trademarks & Unfair Competition, “to be a trademark, a designation must do the job of a trademark.” If that sounds vague, check out the USPTO’s own regulatory language in Section 1202.19(e) of the Trademark Manual of Examining Procedure (TMEP): “The USPTO will not register an applied-for mark unless it functions as a mark …. That is, the mark must serve as an indicator of the source of the goods or services, identifying and distinguishing them from those of others.” This provision serves little utility other than to reiterate the definition of a trademark, but it also grants a copious amount of discretion to the USPTO’s trademark examining attorneys (or more likely, the mentors, senior attorneys, and managing attorneys who review their work).
In the past, FTF refusals have typically resulted from the manner in which a mark is used on a specimen of record. Most trademark professionals recognize these refusals under different names. An “ornamental refusal,” most commonly issued in applications for clothing and personal accessories, is a common FTF refusal in which a mark is found to fail to function as a trademark when it appears in a decorative fashion on an item, such as on the front of a hat or t-shirt, rather than on a tag, label, or breast pocket. Before issuing such a refusal, the examining attorney must review the specimen and determine that, based on industry practices, consumers are unlikely to perceive the mark as a brand identifier in the context shown on the specimen. Most specimen refusals, in general, are based on a mark’s failure to function as a trademark in connection with the applicant’s relevant goods or services, meaning that the mark is used in such a manner that consumers are unlikely to recognize it as a brand identifier. When a mark fails to function as a trademark in a certain context, consumers are more likely to recognize the mark as merely informational, ornamental, as the title of a creative work, or otherwise non-indicative of source. Based on past USPTO and TTAB precedent, FTF refusals have been relatively easy to predict (and avoid), and they are almost always based on the submitted specimens of record.
In recent years, however, the USPTO has taken a more zealous approach to FTF refusals. Most notably, trademark examining attorneys have been allowed (and even required) to cast a wide net when rejecting “widely used messages” for failure to function as trademarks. Section 1202.04(b) of the TMEP describes “widely used messages” as “slogans, terms, and phrases used by various parties to convey ordinary or familiar concepts or sentiments, as well as social, political, religious, or similar informational messages that are in common use or are otherwise generally understood,” a definition which could potentially encompass a significant amount of the written and spoken English language. According to Section 1202.04(b), the “more commonly a term or phrase is used in everyday speech or in an associational or affinitive manner by various sources, the less likely consumers will perceive the matter as a trademark or service mark for any goods and services.” As for evidentiary standards, “any evidence demonstrating that the public would perceive the wording merely as conveying the ordinary meaning of the message, or enthusiasm for, affinity with, or endorsement of the message, supports this refusal.” The purpose of this refusal is to prevent commercial entities from securing monopolies on universally-used terms, phrases, and slogans, which need to be free for unencumbered public use. But ever since the USPTO issued Examination Guideline 2-17 on Merely Informational Matter, which effectively required examining attorneys to crack down on “widely used messages,” the resulting examination practice has been disconcerting for trademark owners and private practitioners.
The wide net cast by examining attorneys in regards to “widely used messages” has resulted in countless surprising refusals, including a few that have made national news. NBA star Lebron James attempted to trademark TACO TUESDAY for advertising and media services, but received a FTF refusal due to the fact that TACO TUESDAY is a commonly used phrase. If James were opening a school cafeteria or Tex-Mex restaurant, it would make sense to reject TACO TUESDAY as an informational mark, which consumers would fail to recognize as a source-identifier in the relevant field of services; however, to provide advertising and media services under the brand TACO TUESDAY seems relatively creative and distinctive, the type of mark usage in commerce which the Lanham Act is supposed to protect. (For more about the TACO TUESDAY mark and other celebrity trademarks, check out this article.) In fact, it seems like a classic example of an arbitrary mark, in consideration of the relevant services.
When you are a student of trademark law, it is common to learn about the “spectrum of distinctiveness,” established in the case of Abercrombie & Fitch Co. v. Hunting World, 537 F.2d 4 (2nd Cir. 1976), in which “arbitrary” marks, which pair a common word or phrase with an incongruous category of goods or services, are considered among the most distinctive type of trademark. The classic example is APPLE for computers; it is difficult to articulate a significant analytical difference between the common term APPLE being registered for computer goods and the common phrase TACO TUESDAY being registered for advertising and media services.
Most concerningly, the USPTO has routinely been rejecting marks as “widely used messages” without
even reviewing the marks in the context of the underlying goods or services. Compared to traditional FTF refusals, which are generally based upon how a mark is used on a submitted specimen of record, the USPTO’s new breed of FTF refusals is frequently issued in Section 1(b) intent-to-use applications. In order to reject a mark for failing to function as a trademark due to the mark consisting of a “widely used message,” examining attorneys merely need to gather internet evidence showing that a phrase, term, or slogan has been frequently used by third parties; they can conduct this analysis completely agnostic of the relationship between the mark and the relevant goods or services. Accordingly, the legal analysis can completely exclude all consideration of the relationship between the mark and the goods and services covered by the application. This is especially alarming since a FTF refusal cannot be overcome by amendment to the Supplemental Register or a Section 2(f) claim of acquired distinctiveness.
The recent direction of FTF refusals is alarming, not only in its unpredictability, but in its disruption to long-standing assumptions of how distinctive, arbitrary marks function in relation to their underlying goods and services. To illustrate how sharply the new “widely used message” doctrine deviates from the traditional conception of arbitrary trademarks, consider the band Men at Work, famous for the hit “Down Under.” MEN AT WORK is a very common informational phrase and “widely used message” in the field of construction and road safety, but as the name of an Australian new wave band, it functions perfectly well as an arbitrary mark. And by the way, a quick TESS search shows that Men at Work singer-songwriter Colin Hay was able to register two MEN AT WORK marks in 2020 (U.S. Registration Nos. 6,216,931 and 6,216,932). The same could be said of many famous marks and brands, which often arbitrarily pair a well-known phrase or slogan with incongruous goods or services. This is why consideration of the relevant goods and services is essential to the Failure to Function analysis in trademark law, and the USPTO’s relatively new practice of issuing FTF refusals in Section 1(b) applications is misguided at best.
My current boss, who is retiring from law practice at the beginning of 2021, is very happy that he will not have to suffer through the USPTO’s and TTAB’s growing pains as this new variation of FTF refusals is developed and delineated via federal agency precedent. The rest of us, however, must work hard to ensure that TTAB precedent evolves in a manner which allows truly informational and universal terms and slogans to stay free for public use in appropriate circumstances, but ensures that arbitrary and suggestive marks receive their due protection as guaranteed by the Lanham Act.