The Sliding Scale of Secondary Meaning: Trademarks

The Federal Circuit vacates a genericness refusal but affirms that a highly descriptive domain-name mark failed to prove the heightened acquired distinctiveness it needed under Section 2(f).

In In re Steelbuilding.com, 415 F.3d 1293 (Fed. Cir. 2005), No. 04-1447 (Serial No. 75/934,927) (decided July 11, 2005), the U.S. Court of Appeals for the Federal Circuit delivered a split-the-difference ruling that remains a workhorse citation in §2(f) practice. The court vacated the Trademark Trial and Appeal Board’s conclusion that STEELBUILDING.COM was generic for online retail services in metal buildings, but it affirmed the refusal to register on a different ground, holding the mark merely descriptive and the applicant’s evidence of acquired distinctiveness inadequate. The judgment was VACATED-IN-PART and AFFIRMED-IN-PART, and the denial of the application stood. Writing for the panel, Judge Rader articulated the principle the case is now known for: the more descriptive a mark, the heavier the burden to prove that it has acquired secondary meaning. Judge Linn filed a separate opinion concurring in part and dissenting in part.

At a glance

Case: In re Steelbuilding.com, 415 F.3d 1293 (Fed. Cir. 2005), No. 04-1447.
Decided: July 11, 2005; panel of Chief Judge Michel, Judge Rader (author), and Judge Linn (concurring in part and dissenting in part).
Mark at issue: STEELBUILDING.COM for computerized online retail services in the field of pre-engineered metal buildings and roofing systems.
The Board’s decision: Affirmed the refusal on genericness, with an alternative holding that the term was at least highly descriptive and lacked acquired distinctiveness under §2(f).
The holding: The Board construed the genus too narrowly and the record did not support genericness, so that determination was vacated; but the mark is merely descriptive and the applicant failed to carry its heightened §2(f) burden, so the refusal was affirmed on descriptiveness grounds. Disposition: VACATED-IN-PART and AFFIRMED-IN-PART, each party to bear its own costs.

Vacating genericness: getting the genus right

Genericness begins with correctly defining the genus of goods or services. The Board defined the genus as “the sale of pre-engineered ‘steel buildings’ on the Internet” and reasoned that STEELBUILDING.COM was “simply the name of a website that sells, inter alia, steel buildings.” The Federal Circuit found that framing flawed, and specifically too narrow. The applicant’s services were not merely the sale of steel buildings but a complex interactive process that let a customer design a unique structure, price it, and then order it online. In the court’s words, “the services at issue are far more than an on-line catalogue.”

Because the genus was construed too narrowly, the genericness analysis could not stand. And even accepting the Board’s own understanding of the genus, the court found the record insufficient to support a finding of genericness: the competitor uses the Board relied on were of the phrase “steel building” or “steel buildings,” none of “STEELBUILDING.” The court also faulted the Board for considering “STEELBUILDING” and ”.COM” separately rather than as a composite. It summed up three errors: the Board “construed the genus of applicant’s services and goods too narrowly,” “discounted the ambiguities and multiple meanings in the mark,” and “dismissed the addition of the TLD indicator despite its expansion of the meaning of ‘STEELBUILDING.COM.’” The court therefore vacated the genericness determination. That portion of the opinion is a useful reminder that genericness is evidence-intensive and that a sloppy genus definition can sink the Office’s strongest objection.

Notably, the court did not treat ”.COM” as a nullity here. Rejecting the Board’s view that ”.COM” was “no more than a designation of a commercial entity on the Internet, like ‘company,’” it held that “in this unusual case, the addition of the TLD indicator expanded the meaning of the mark to include goods and services beyond the mere sale of steel buildings,” namely the online design-and-price services. That is why Steelbuilding.com is cited as an example of the rare circumstance, drawn from In re Oppedahl & Larson LLP, 373 F.3d 1171, 1177 (Fed. Cir. 2004), in which a TLD can contribute meaning.

Affirming descriptiveness: the sliding-scale burden

Vacating the genericness determination did not save the application, because the Board had an alternative ground and the Federal Circuit embraced it. The court agreed that STEELBUILDING.COM is merely descriptive of the services: a consumer would recognize the compound word “STEELBUILDING” as conveying “the same impression, at least for trademark purposes, as the phrase ‘steel buildings.’” As for the domain, the court endorsed the Board’s observation that adding ”.COM” “simply means that services associated with the generic term are performed in an on-line or ‘e-commerce’ environment,” and added that the TLD “describes a significant feature of applicant’s services, namely, the Internet commerce connection.” The TLD’s expansion of meaning was enough to defeat genericness, then, but it cut the other way on descriptiveness: describing a real feature of the services is precisely what makes a term descriptive.

A merely descriptive mark can still be registered on a showing of acquired distinctiveness under §2(f). Here the court applied the proposition for which the case is best known, quoting In re Bongrain International (American) Corp., 894 F.2d 1316, 1317 (Fed. Cir. 1990): “the greater the degree of descriptiveness the term has, the heavier the burden to prove it has attained secondary meaning.” Because the proposed mark was highly descriptive, the court held, “applicant had the burden to show a concomitantly high level of secondary meaning.”

The applicant’s showing did not clear it. The Board had weighed print and Internet advertising, declarations from competitors and the applicant’s own officers, sales data, web site traffic, and customer communications. It found the advertising spend “at a much smaller level” than in a prior unsuccessful case and heavily reliant on Internet banner ads. The Federal Circuit agreed that the applicant’s Internet name-recognition poll “lacked sufficient signs of reliability”: it did not report the number of participants and did nothing to stop repeat voting, so it “does not even remotely follow the precepts of standard trademark name-recognition polls.” On that record, the Board “correctly determined that ‘applicant’s evidence falls far short of its burden.’” The doctrinal payoff is a calibrated rule: descriptiveness is not binary, and the quantum of §2(f) proof must scale to where on the descriptiveness spectrum a mark falls.

The Linn opinion: a different read of the evidence

Judge Linn agreed with much of the majority’s framework but parted ways on application. He agreed the poll results were inconclusive. His objection was to how the Board handled the rest: the applicant had submitted declarations from competitors and others with industry knowledge, plus customer letters, and the Board discounted them because “much of this evidence may be attributable to domain name recognition.” To Linn, domain-name recognition in the Internet context is source recognition, so that was not a reason to give the evidence little weight. He also thought the Board gave the banner and other Internet advertising too little weight and acted arbitrarily in ignoring evidence of consumers who returned to the site and logged in regularly. His remedy was not to hold that the applicant had proved secondary meaning: he would have vacated the Board’s no-acquired-distinctiveness determination and remanded for further consideration. The split underscores that the sliding-scale rule, however tidy in statement, leaves real room for disagreement at the margins, particularly over how to weigh a developing online business’s evidence of consumer recognition.

Open questions

How descriptive is “too descriptive” for ordinary §2(f) proof? The sliding scale is a principle, not a formula; where a given mark falls (and therefore how much evidence it needs) remains a case-by-case judgment.
What is the registrability significance of a top-level domain? Steelbuilding.com shows a TLD can cut both ways: the ”.COM” expanded the mark’s meaning enough to defeat genericness, yet described a feature of the services and so supported descriptiveness. Later authority on domain-name and generic-plus-gTLD marks has continued to refine when, if ever, a TLD contributes source significance.
Can interactive or design-oriented online services change the analysis? The court’s broader view of the genus, taking in the design-and-price process rather than mere sales, suggests that the precise nature of online services matters; how much that distinction can move the descriptiveness needle is unsettled.
What evidence best proves acquired distinctiveness for online marks? The opinion faults the applicant’s showing without prescribing a template, leaving practitioners to assemble survey, advertising, and recognition evidence sufficient for a highly descriptive term.

Implications

Descriptiveness is a spectrum, and proof must match it. The more descriptive the mark, the more §2(f) evidence is required; applicants for highly descriptive marks should plan for a demanding showing of secondary meaning from the outset.
Adding ”.COM” rarely creates distinctiveness. Appending a top-level domain to a descriptive term ordinarily signals only an online setting and does not, by itself, render the composite registrable. Steelbuilding.com is the rare case where the TLD expanded the mark’s meaning, and even there it defeated only genericness, not descriptiveness.
Genus definition is decisive in genericness fights. A genus construed too narrowly can defeat a genericness refusal; both examiners and applicants should define the genus precisely and tie it to the actual services.
Winning on genericness is not winning the application. An alternative descriptiveness ground can sustain a refusal even after genericness falls, so applicants must contest every basis the Office asserts.
Document secondary meaning early. For descriptive marks, contemporaneous evidence of advertising reach, sales, media recognition, and consumer association is the currency of §2(f), and a thin record will not carry a highly descriptive term.

Frequently asked questions

Did Steelbuilding.com win or lose? Both, in a sense. It won vacatur of the genericness determination: the court held the term was not shown to be generic and that the Board had construed the genus too narrowly. But it lost overall, because the court affirmed the refusal on the alternative ground that the mark is merely descriptive and the applicant failed to prove acquired distinctiveness under §2(f). The disposition was VACATED-IN-PART and AFFIRMED-IN-PART, and the application stayed denied.

What is the “sliding scale” the case is famous for? The principle that the amount of evidence needed to prove acquired distinctiveness increases with the degree of descriptiveness. A mark that is only mildly descriptive needs relatively little proof of secondary meaning; a highly descriptive mark needs a correspondingly large body of evidence.

Does adding ”.COM” help a descriptive mark get registered? Generally no. On descriptiveness, the Federal Circuit agreed that ”.COM” means only that the services are performed in an online or e-commerce environment, which describes a feature of the services rather than identifying a source. The wrinkle is that in this same case the ”.COM” did do work on genericness: the court held the TLD “expanded the meaning of the mark” to reach the site’s design-and-price services, which is why the genericness finding was vacated. So a TLD is not automatically a nullity, but helping against genericness is not the same as creating distinctiveness.