In a 75-page opinion that includes a 12-page Appendix summarizing the record, the Board dismissed this opposition to registration of the mark TEQUILA as a certification mark for “distilled spirits, namely, spirits distilled from the blue tequilana weber variety of agave plant.” Opposer Luxco failed to prove its claims of genericness, lack of legitimate control, and fraud. Luxco, Inc. v. Consejo Regulador del Tequila, A.C., Opposition No. 91190827 (January 23, 2017) [precedential].

Applicant CRT is a private body authorized and approved under Mexican law to carry out activities of evaluation and certification of the production of tequila. Opposer Luxco imports tequila in bulk and sells its finished product to other distributors. It purchases tequila from two Mexican suppliers and the tequila is certified by Applicant as authentic tequila in accordance with Mexican law.

Standing: CRT asserted that Luxco lacked standing because, under US law, Luxco cannot use the term TEQUILA unless the product has been certified by CRT, and so the registration of TEQUILA as a certification mark will not change the commercial environment. The Board, however, pointed out that registration will “entail a new layer of protection under the Trademark Act, to which Opposer must answer, that does not currently exist.” See Lanham Act Sections 2, 4, 7, 32, 34, 42, and 45. Therefore, Luxco has standing to bring its claims.

Genericness: A geographic certification mark is expressly exempted from the Section 2(e)(2) geographical descriptiveness bar, and so a geographical name does not require secondary meaning to qualify for registration as a certification mark. Opposer Luxco had the burden to prove by a preponderance of the evidence that the designation TEQUILA is generic.

A certification mark that certifies regional origin as well as the qualities and characteristics associated with that origin “will not be deemed to have become a generic term as applied to particular goods unless it has lost its significance as an indicator of origin for those goods.” Tea Board of India, 80 USPQ2d at 1887. The public’s perception is the primary consideration in determining genericness.

The Board found the genus of goods to be those identified in the subject application, and the relevant consumers to be the purchasers of those goods. The question, then, was whether these relevant consumers perceive the term TEQUILA as an indicator of geographic origin or as merely the name of a certain type of alcoholic beverage regardless of it geographic origin and the methods and conditions for producing it.

The Tobacco Tax and Trade Bureau (TTB) of the U.S. Department of Treasury classifies Tequila as a distinctive product of Mexico and prohibits the labeling of bottles as Tequila if the product is not manufactured in Mexico in compliance with Mexican laws. Therefore, those in the trade are presumptively aware of that classification, but that does not establish how purchasers perceive the term.

The Board reviewed dictionary definitions of Tequila, encyclopedia and website references, several expert reports, advertising and bottle labels for Tequila, recipes, new articles, retail signage, and consumer survey results. It observed that “a term that identifies a category of spirit would not be generic if it also serves to identify geographic origin (i.e., a type of spirit from Mexico).”

The evidence …, particularly the information in the standard reference works, advertising and brand names engendering an association with Mexico, labels on every bottle sold that include the statement “Product of Mexico” or “Hecho en Mexico,” and Applicant’s survey finding that 55.4% of the respondents believe that Tequila indicates that the product is made in Mexico, counters Opposer’s assertion that Tequila is a generic term.

The Board found that the record evidence was, at best, mixed, and “tends to show that Tequila has significance as a designation of geographic origin.” Because Luxco failed to meet its burden to prove genericness by a preponderance of the evidence, the Board dismissed this count of the opposition.

 Control: Opposer Luxco asserted that Applicant CRT cannot exercise control over the term Tequila as required by 15 USC Sections 1063-1064 because the TTB has authority over the use of tequila. The Board pointed out, however, that the TTB has no authority to make determinations as to trademark registrability. The Board is not concerned with whether TTB labeling requirements have been met, and the TTB requirements are irrelevant to the issue of trademark registrability.

The Board also rejected Luxco’s argument that the Mexican government, and not Applicant CRT, owns the term TEQUILA. Applicant was authorized by the Mexican Institute of Intellectual Property to register TEQUILA as a certification mark because CRT is the organization that verifies compliance with the Official Mexican Standard for Tequila. The Board therefore concluded that CRT has the right and authority to control the use of the term Tequila as a certification mark in Mexico and in the United States, that CRT is exercising legitimate control, and that CRT is the owner of the certification mark for purposes of registration in the United States. See TMEP Section 1306.05(b)(ii).

Fraud: Luxco maintained that CRT misled the Trademark Examining Attorney into believing that TEQUILA has “special status” as an “appellation of origin” under US trademark law. The Board, however, found that the Examining Attorney was not misled, and in any case was provided with the authorities upon which CRT was relying in asserting that Tequila is recognized as a distinctive product of Mexico. Moreover, the evidence suggested that CRT had a reasonable belief in the correctness of its position rather than an intent to deceive the USPTO.

Luxco also claimed that CRT committed fraud by falsely stating to the Examining Attorney that “In terms of volume practically 100% of the tequila product sold in the world comes from a certified producer and certified brand.” The Board, however, found nothing in the record – “not one iota of evidence” – to support the claim that this statement was false or intended to deceive the USPTO.

And so the Board dismissed the opposition.