In In Re Spirits International, N.V, the United States Court of Appeals for the Federal Circuit (CAFC) remanded an appeal from theTrademark Trial Appeals Board (TTAB), In Re Spirits International, N.V (86 USPQ2d 1078) ["Spirits"], where the TTAB affirmed the decision of the U.S. Patent and Trademark Office (PTO). The PTO based its rejection of Spirit’s mark “MOSKOVSKAYA” (74/382,759) for registration in connection with vodka, on 15 U.S.C. § 1052(a) & (e)(3). However, the TTAB narrowed the relevant section to 15 U.S.C. § 1052(e)(3) and concluded that the mark was primarily geographically deceptively misdescriptive given that Russia is well-known for its vodka.

At issue was the TTAB’s application of the third component of the test establishing a prima facie case that a mark is primarily geographically deceptively misdescriptive of wares, the materiality requirement. This step requires an assessment of the materiality of the impact on a consumer’s purchasing decision when faced with the mark. The TTAB had rejected Spirits’ submission of a mall-intercept survey mainly due to the fact that it did not include Russian speakers living in the U.S.

Though the Court did not address whether the TTAB incorrectly rejected the Spirits’ survey, it did hold that the rejection was based on an incorrect application of the materiality test . In order to establish a prima facie case that a mark is primarily geographically deceptively misdescriptive, three elements must be proven. The Court applied the doctrine of foreign equivalents, where foreign words are translated in english according to the ordinary American consumer. This established that the mark’s primary significance was a generally known geographic location i.e. Moscow. It was also found that the relevant public would be likely to associate the goods with the location, though the appellant’s vodka did not originate from Moscow.

The Court cited In re California Innovations, Inc. (329 F.3d 1334) in support of the third requirement that a non-english (written and aurally) mark be materially deceive and influence the public’s decision to purchase the good. However the Court noted that the case failed to delineate the scope of the materiality requirement. Thus, the Court drew inspiration from common law doctrine discussed in Coca-Cola Co. v. Koke Co. of America (254 U.S. 143), and false advertising case law in Johnson & Johnson-Merck Consumer Pharmaceuticals Co. v. Rhone-Poulenc Rorer Pharmaceuticals, Inc (19 F.3d 125), in order to confirm that the correct criterion to be applied for the materiality requirement is the substantial portion standard.

Thus, a significant number of relevant consumers has to be deceived in order to satisfy the materiality requirement. The Court highlighted the role of proportionality in applying the standard, in contrast with the TTAB’s approach, which took into account an absolute number of the relevant consumers, the russian-speaking population in the U.S. The TTAB relied on the 2000 Census which showed that the number of Russian-speakers living in the U.S was 706,000, a figure which satisfied it that the impact of the deception would be sufficiently material. The Court rejected the approach of the TTAB, given that there was no deliberation as to whether the russian-speaking population consisted of a substantial portion of the pertinent public and instead wrongly adopted an absolute standard in “an appreciable number of consumers.”