Coca-Cola Company distributes Thums Up cola and Limca lemon-lime soda in India and other international markets. Meenaxi Enterprise, Inc. has been selling these beverages in the U.S. since 2008 and registered the THUMS UP and LIMCA trademarks in 2012. Coca-Cola initiated cancellation proceedings under Section 14(3) of the Lanham Act, claiming Meenaxi misrepresented the source of its goods. The Trademark Trial and Appeal Board ruled in favor of Coca-Cola, leading Meenaxi to appeal.
Coca-Cola, which started operations in India in 1950, acquired the Thums Up and Limca brands through the purchase of Parle (Exports) Limited in 1993. The Indian High Court recognized the THUMS UP mark as 'famous' and the LIMCA mark as 'well known.' Coca-Cola provided evidence that its products were being imported and sold in the U.S. by third parties since at least 2005, along with statements from company officials about the popularity of their brands in U.S. Indian grocery stores.
Meenaxi argued it conducted due diligence before using the marks, noting the THUMS UP application had been abandoned and the LIMCA registration had expired prior to its own trademark registration. The court ultimately reversed the Board’s decision, determining Coca-Cola failed to prove a statutory cause of action based on lost sales or reputational harm.
On March 8, 2016, Coca-Cola initiated a cancellation claim against Meenaxi's trademark registrations under Section 14(3) of the Lanham Act, alleging misrepresentation of source. This section allows any person who believes they are or will be harmed by a mark's registration to file for cancellation if the mark misrepresents the source of goods or services. The Board first evaluated Coca-Cola's standing to bring the claim, requiring evidence that Coca-Cola believes it has been or will be damaged by the registration.
The Board determined that Coca-Cola's interests fell within the zone of interests protected by the Lanham Act, noting that Coca-Cola holds registrations for the THUMS UP and LIMCA marks, which are well-known and have a substantial market share in India, with recognition extending to the Indian-American community in the U.S. The Board cited demographic evidence showing significant growth in the Indian-American population, reinforcing the likelihood of familiarity with Coca-Cola’s brands among these consumers.
Regarding proximate damage, the Board found that Coca-Cola reasonably perceived potential harm due to Meenaxi's registration, which could disrupt consumer expectations and had previously been used to obstruct the importation of Coca-Cola’s products. The Board referenced the Fourth Circuit's ruling in Belmora LLC v. Bayer Consumer Care AG to support its findings on both the zone-of-interest and damage prongs.
On the merits, the Board reiterated the familiarity of Coca-Cola’s THUMS UP and LIMCA marks within the Indian-American community and highlighted Meenaxi's admissions of prior knowledge of these brands. Evidence included Meenaxi executives acknowledging their awareness of Coca-Cola's products and the company's historical presence in India. The Board concluded that Meenaxi had intentionally copied Coca-Cola's logos and slogans, only altering them after Coca-Cola raised objections.
The Board determined that Meenaxi was misleading U.S. consumers into believing its THUMS UP cola was identical to Coca-Cola’s version from India, fulfilling the criteria for a misrepresentation of source claim. Consequently, on June 28, 2021, the Board cancelled Meenaxi’s trademark registrations ’597 and ’598. Meenaxi subsequently filed an appeal, which falls under the jurisdiction of 28 U.S.C. 1295(a)(4). The Board also noted that Meenaxi had a pattern of copying other Indian brands, leading to multiple challenges against its trademarks, resulting in cancellations or abandonments of marks like NUTRELA, RASNA, and REAL NAMKEEN.
A key legal inquiry is whether Coca-Cola has a statutory cause of action to contest Meenaxi’s trademark registrations for THUMS UP and LIMCA. Under Section 14 of the Lanham Act, any person believing they will be harmed by a trademark registration can file a cancellation challenge. This case primarily considers statutory standing, distinct from Article III standing, which becomes relevant when seeking federal court review. Meenaxi's standing to appeal is affirmed due to the cancellation of its registration. The focus for Coca-Cola is whether it possesses a statutory cause of action to challenge Meenaxi, based on the claim that Meenaxi's registered mark misrepresents the source of goods, as outlined in 15 U.S.C. 1064(3). The Supreme Court's Lexmark decision established that such claims are limited to parties with interests protected by the relevant law, requiring an allegation of injury to commercial interests in reputation or sales. The zone-of-interest test, while not stringent, remains a necessary condition for a valid claim.
The Court determined that Static Control suffered injuries related to Lexmark's claims about its products, specifically 'lost sales and damage to its business reputation,' which fall under the commercial interests protected by the Lanham Act. The language in Section 43(a) establishing a cause of action for 'any person who believes that he or she is or is likely to be damaged' closely resembles that of Section 14(3), resulting in the same injury requirements applying to both sections. Thus, the Court affirmed that the zone-of-interests and proximate-causation criteria established in Lexmark govern the analysis under Section 1064.
Meenaxi contended that Coca-Cola lacks a cause of action under the Lanham Act due to the territoriality principle, which asserts that a trademark exists separately within each sovereign territory where it is registered. This principle is fundamental to trademark law, indicating that trademark rights are defined by each country’s legal framework. Historical Supreme Court cases have recognized this principle in both domestic and international contexts, emphasizing that while a trademark may offer protection in markets where it is known, it cannot monopolize markets it has never reached. The right to a trademark is contingent upon its use in connection with a business, not merely its adoption. The territoriality principle remains applicable internationally, where priority of trademark rights in the U.S. is determined by prior use within the country, independent of foreign use.
The 1946 federal trademark right is limited to countries where a mark is utilized, following the territoriality principle. In the Person's case, a retailer in Japan had a mark but a U.S. citizen, Christman, registered and used the same mark in the U.S. The Japanese owner, expanding into the U.S. market, sought cancellation of Christman’s registration due to consumer confusion. The Board ruled in favor of Christman, affirming that the Japanese mark had not gained notoriety in the U.S. at Christman's adoption, thus no goodwill existed to support the Japanese owner's claim. The court emphasized that foreign use could not establish priority in U.S. commerce.
Coca-Cola's case diverges as it does not claim U.S. trademark rights for the THUMS UP or LIMCA brands but argues that sections 14(3) and 43(a) of the Lanham Act extend beyond trademark protection. The Supreme Court in Dastar Corp. highlighted that these sections address improper use of marks causing commercial injury, even to parties without trademark rights. The Fourth Circuit's Belmora case clarified that Section 43(a) does not require a plaintiff to have used a mark in U.S. commerce to bring a cause of action. While Belmora suggests the Lanham Act may extend to foreign commerce, such applicability remains debated in academic circles and is not directly relevant here.
Coca-Cola asserts its claims based solely on alleged injuries within the U.S., countering Meenaxi's argument that there were no lost sales or reputational damages in the U.S. due to Meenaxi's activities.
Coca-Cola has not demonstrated any lost sales in the U.S. related to its THUMS UP and LIMCA brands, relying instead on testimony regarding the resale of these products by third parties in American grocery stores. While Coca-Cola provided evidence of some importation instances and online availability, these do not substantiate claims of lost sales attributable to Coca-Cola's own activities, as it lacks evidence of selling Limca in the U.S. For Thums Up, it was only shown to be available at specific Coca-Cola locations, and Coca-Cola did not quantify its distribution there, failing to prove it exceeds a minimal level. Additionally, Coca-Cola's vague future marketing plans for these beverages do not suffice for a Lanham Act claim, as established in case law.
Regarding reputational injury, courts have differing views on protecting famous marks from reputational harm occurring outside the U.S. However, Coca-Cola does not invoke a famous-mark exception; it claims reputational injury stems from Meenaxi misleading Indian-American consumers into thinking its products are affiliated with Coca-Cola. Although the Board acknowledged some recognition of Coca-Cola's reputation among Indian-Americans, Coca-Cola did not clarify how this reputational harm negatively impacted its commercial interests, merely speculating that consumer dissatisfaction with Meenaxi’s products could lead to blame directed at Coca-Cola. The Supreme Court's Lexmark decision indicates that reputational injury must be connected to consumer deception that results in lost trade, which Coca-Cola has not substantiated.
Lexmark's reliance on historical authorities regarding the tort of passing off highlights that liability arises when one diverts business from another through fraudulent misrepresentation, benefiting from the other's established reputation. Coca-Cola's claims regarding reputational harm within the Indian-American community are unsupported, as they do not demonstrate lost U.S. sales or sufficient awareness of the THUMS UP and LIMCA marks among that demographic. The Board's conclusion that these marks would have a reputation among Indian-Americans lacks substantial evidence and relies on unfounded assumptions about their awareness of Indian brands. Furthermore, Coca-Cola's evidence, including affidavits asserting the popularity of these beverages in the U.S., fails to meet the standards of personal knowledge required under the Federal Rules of Evidence. The sole piece of evidence indicating U.S. consumer awareness—a comment from a corporate witness regarding THUMS UP—does not suffice to establish a broader recognition of the brand among U.S. consumers. This lack of concrete evidence parallels previous findings where awareness due to travel did not equate to general consumer awareness.
The Board's decision to cancel Coca-Cola's trademark registrations for THUMS UP and LIMCA was based on the finding that Meenaxi copied these marks, which the Board initially interpreted as evidence of consumer awareness in the U.S. However, the court determined that Coca-Cola did not provide sufficient evidence to demonstrate that the reputations of its marks extend to the U.S. market, nor did it establish reputational injury necessary for a claim under Section 14(3) of the Lanham Act. The court noted that while copying a U.S. mark can indicate secondary meaning or likelihood of confusion, there is no legal precedent supporting the notion that copying a foreign mark serves as evidence of U.S. reputation. Therefore, the cancellation of the trademark registrations was reversed, with costs awarded to Meenaxi. The concurring opinion emphasized that the case is governed by the principle of territoriality, focusing on Coca-Cola's failure to prove lost sales or reputational injury in the U.S. market.
Coca-Cola failed to demonstrate the necessary damage to establish statutory standing for its petition due to a lack of evidence regarding the sale and distribution of its products, Limca soda and Thums Up cola, in the United States. The principle of territoriality in trademark law asserts that trademark rights are confined to each country's statutory framework, which means that prior use in foreign countries does not impact trademark rights in the U.S. Specifically, priority of trademark rights in the U.S. is determined solely by usage within the country, as established in cases like Person’s Co. Ltd. v. Christman and Grupo Gigante SA De CV v. Dallo. Co. Inc. The Lanham Act's cancellation provisions are similarly bound by this territoriality principle, indicating that claims of damage from foreign trademark rights do not satisfy the injury requirement for cancellation petitions under 15 U.S.C. 1064. This conclusion aligns with the understanding that damage to a foreign trademark's goodwill cannot be considered as damage under U.S. trademark law.
Not every cognizable injury-in-fact grants statutory standing under the Lanham Act, which does not extend to extraterritorial injuries. Coca-Cola was unable to demonstrate statutory standing for its cancellation petition, as it failed to provide evidence of damage to its goodwill in U.S. commerce. Furthermore, reliance on foreign trademark rights for standing was ineffective due to the territoriality principle, which limits the Act's scope to injuries that fall within the interests Congress sought to protect. Coca-Cola also did not prove damage to its reputation among U.S. consumers, although the potential application of the “well-known mark” exception to the territoriality rule was noted but ultimately waived by Coca-Cola. Case law indicates that the Lanham Act may apply extraterritorially if domestic parties suffer substantial effects from foreign activities; however, the reverse does not hold true. An exception for well-known marks among U.S. consumers exists, as illustrated in Grupo Gigante, but its applicability in this case remains uncertain. The Ninth Circuit has recognized a famous mark exception, allowing foreign mark holders to assert rights against domestic users if significant confusion among U.S. consumers is likely, as demonstrated by the similarity of facts in Grupo Gigante. The issue of territoriality is relevant to Coca-Cola's claims, but it did not allege lost sales in the U.S. related to its claimed reputational injury.
An absolute territoriality rule in trademark law is criticized for potentially increasing consumer confusion and fraud, particularly for immigrants who may be misled into thinking they are purchasing goods from familiar brands. The author concurs with the majority that the Board’s findings on U.S. consumer recognition are not supported by substantial evidence but considers this irrelevant since Coca-Cola explicitly disclaimed reliance on the well-known mark exception. Additionally, although the majority's opinion suggests Coca-Cola could have established statutory standing by demonstrating U.S. consumer awareness of its Indian brands, the author maintains that the territoriality doctrine applies and Coca-Cola waived its right to invoke the well-known mark exception.
