To attain legal status as a trademark, a term must be deemed to be “distinctive” as used in connection with the goods and/or services being offered. However, the degree of distinctiveness – and, therefore, the strength of a mark – can range from marks that are inherently distinctive (arbitrary, fanciful, and suggestive marks) to marks deemed unworthy of protection (generic marks and descriptive marks lacking secondary meaning.) The middle ground is occupied by descriptive marks that have achieved secondary meaning among the consuming public. Because a party cannot prevail on a trademark claim unless its mark is distinctive, determining where a particular mark falls within the “distinctiveness” scale is a crucial determination in any trademark infringement suit.
As such, the recently decided Lahoti v. Vericheck – which overturned a lower court’s more rigid application of the “descriptiveness” analysis – has the potential to significantly impact future trademark litigation. In Lahoti, the 9th Circuit Court of Appeals held that the lower District Court had made several errors of law in its descriptiveness analysis. Specifically, the lower court had held (1) that a trademark was descriptive only if it described all of the trademark owner’s businesses; and (2) that a trademark could be examined only by taking the entire mark into account. Using this analysis, the lower held that the mark “VERICHECK” was not descriptive – even though one of the services offered was ‘check verification’ – as the mark did not “immediately call to mind the broad array of electronic transaction processing services” offered by the trademark owner.
However, the 9th Circuit appellate court held that this analysis was incorrect and, instead, clarified that the proper test to determine if a mark is descriptive is whether it conveys any information about the nature of the mark owner’s goods or services. Moreover, the appellate court stated that a mark could properly be broken into its component parts as a preliminary step to determining consumer reaction to the overall mark.
Under this revised standard, the “VERICHECK” mark may now be examined by breaking apart its two component parts, ‘veri’ and ‘check’, and examining these in relation to each of the individual goods and services offered, including “check verification services.” As such, the 9th Circuit’s ruling has put the validity of the “VERICHECK” trademark in real question and raised the hurdle that trademark owners must overcome in proving the validity of a mark.
Read the full opinion here.