In Meenaxi Enter. v. Coca-Cola Co., 38 F.4th 1067 (Fed. Cir. 2022) the United States Court of Appeals for the Federal Circuit (“CAFC”) reversed a Trademark Trial and Appeal Board (“TTAB”) decision cancelling two registrations for marks identical to those used outside of the US by The Coca-Cola Company (“Coca-Cola”). In doing so, the CAFC held that Coca-Cola had failed to establish statutory cause of action based on lost sales or reputational injury under Section 14(3) of the Lanham Act to cancel Meenaxi Enterprise, Inc.‘s (“Meenaxi”) US registrations because Coca-Cola had not submitted evidence needed to support the arguments Coca-Cola had advanced.
Coca-Cola has sold soft drinks in India and other foreign countries using the trademarks THUMS UP and LIMCA for many decades. Coca-Cola owns registrations for both marks in India, where the Delhi High Court has found the THUMS UP and LIMCA marks to be “famous” and/or “well known” in India. Coca-Cola does not use the LIMCA mark in the US and its use of THUMS UP in the United States is limited. Instead, Meenaxi has used the THUMS UP and LIMCA marks to sell soft drinks to Indian grocers located in the United States since 2008. Meenaxi received US registrations for the THUMS UP and LIMCA marks in 2012. Coca-Cola petitioned to cancel Meenaxi’s US registrations in 2016 on the grounds that the registrations misrepresent the source of the soft drinks Meenaxi sells. The CAFC’s decision focused on whether Coca-Cola had a sufficient protectable interest and an injury arising from Meenaxi’s registrations to permit Coca-Cola to seek cancellation of the same under Section 14(3) of the Lanham Act.
The TTAB held that Coca-Cola had a statutory entitlement to seek cancellation because Coca-Cola had established a protectable interest based upon its ownership of corresponding Indian registrations for the THUMS UP and LIMCA marks and the marks “likely would be familiar to much of the substantial Indian-American population in the United States.” The TTAB further held that Coca-Cola was injured because Coca-Cola “reasonably believe[d] in damage proximately caused by the continued registration by [Meenaxi] of THUMS UP and LIMCA” as Meenaxi’s use of the THUMS UP and LIMCA marks could cause a harm “stemming from the upset expectations of consumers.” Finally, the TTAB also found that Meenaxi was attempting to “dupe” US consumers and cancellation of Meenaxi’s registrations was appropriate. Meenaxi appealed.
The CAFC reversed the TTAB’s decision because the evidentiary record did not support that Coca-Cola had demonstrated either lost sales or reputational injury, prerequisites for the Section 14(3) cause of action pled. The CAFC noted that Coca-Cola did not submit any evidence that it had lost any US sales based on Meenaxi’s registrations. While Coca-Cola had presented evidence for future plans to market the products more broadly in the United States, the CAFC held that “nebulous future plans for US sales cannot be the basis for a Lanham Act claim.”
As to reputational injury, Coca-Cola had not relied on a famous marks exception instead arguing that Coca-Cola had experienced reputational injury because “(1) members of the Indian- American community in the United States were aware of the THUMS UP and LIMCA marks and (2) Meenaxi traded on Coca-Cola’s goodwill with Indian-American consumers in those marks by misleading them into thinking that Meenaxi’s beverages were the same as those sold by Coca-Cola in India.” Rejecting these arguments, the CAFC held that Coca-Cola had failed to establish that its THUMS UP and LIMCA marks had any reputation in the US beyond the “stereotyped speculation” that Indian Americans would be aware of those marks. Further, Coca-Cola had “failed to explain how its supposed reputational injury adversely affected its commercial interests other than to speculate that a consumer dissatisfied with Meenaxi’s products might blame Coca-Cola.” This was insufficient to establish reputational injury. Under Lexmark International, Inc. v. Static Control Components, Inc., 572 US 118, 129, 132 (2014), a “cognizable ‘economic and reputational injury’ generally ‘occurs when deception of consumers causes them to withhold trade from the plaintiff,'” and Coca-Cola had alleged no lost US sales as a result of the claimed reputational injury.