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In Re Budge Manufacturing Co., Inc

Court of Appeals for the Federal Circuit
8 U.S.P.Q. 2d (BNA) 1259, 857 F.2d 773, 1988 U.S. App. LEXIS 12792 (1988)
ELI5:

Rule of Law:

A trademark is unregistrable as deceptive under Section 2(a) of the Lanham Act if it is misdescriptive of the goods, prospective purchasers are likely to believe the misdescription, and the misdescription is likely to affect the purchasing decision.


Facts:

  • Budge Manufacturing Co., Inc. (Budge) produces and sells automotive seat covers under the trademark 'LOVEE LAMB'.
  • The 'LOVEE LAMB' seat covers are made wholly from synthetic fibers.
  • Budge also manufactures and sells other automotive seat covers made from natural sheepskin.
  • Seat covers for various vehicles, including automobiles, are sometimes made from natural lambskin and sheepskin.
  • Natural sheepskin and lambskin are generally more expensive and have different material characteristics than the synthetic fibers used in Budge's product.
  • Some of Budge's advertising and labels for the 'LOVEE LAMB' product include the explanatory text 'simulated sheepskin'.

Procedural Posture:

  • Budge Manufacturing Co., Inc. filed an application with the U.S. Patent and Trademark Office (PTO) to register the trademark 'LOVEE LAMB' for automotive seat covers.
  • The PTO's Trademark Examining Attorney refused registration on the grounds that the mark was deceptive.
  • Budge appealed the refusal to the Trademark Trial and Appeal Board (TTAB), an administrative tribunal within the PTO.
  • The TTAB affirmed the Examining Attorney's refusal to register the mark.
  • Budge Manufacturing Co., Inc., as appellant, appealed the TTAB's final decision to the U.S. Court of Appeals for the Federal Circuit.

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Issue:

Does the term 'LAMB' in the trademark 'LOVEE LAMB' for automotive seat covers made of synthetic fibers constitute deceptive matter under Section 2(a) of the Lanham Act, thereby barring its registration?


Opinions:

Majority - Nies, Circuit Judge

Yes, the mark 'LOVEE LAMB' is deceptive and therefore barred from registration. A mark is deceptive under Section 2(a) if it meets a three-part test: (1) it is misdescriptive of the goods' character, quality, or composition; (2) prospective purchasers are likely to believe the misdescription; and (3) the misdescription is likely to affect the decision to purchase. Here, 'LAMB' is misdescriptive because the product is synthetic, which Budge admits. Second, purchasers are likely to believe the misdescription because seat covers are commonly made from sheepskin or lambskin. Third, the misdescription is material and likely to affect purchasing decisions because natural lambskin is more expensive and has different qualities than synthetic material. Explanatory statements in advertising or on labels, such as 'simulated sheepskin,' do not cure the deceptiveness of the mark itself, as the mark must be able to stand on its own to qualify for registration.


Concurring - Nichols, Senior Circuit Judge

Yes, the decision should be affirmed, but the majority's adoption of a rigid three-part formula is concerning. While the outcome is correct, creating a formal, multi-part test risks complicating what should be a straightforward legal analysis. This formula may encourage unnecessary and wide-ranging factual inquiries into the nature of 'prospective purchasers' in future cases. The board’s simpler question of whether 'anyone would be likely to believe' the misrepresentation was sufficient, and there is no need to 'fix anything when nothing is broke' by imposing this rigid framework on the Trademark Trial and Appeal Board (TTAB).



Analysis:

This decision formally establishes the controlling three-part test for determining whether a mark is 'deceptive' under Section 2(a) of the Lanham Act, a test that remains central to trademark law. The court's analysis clarifies that an intent to deceive is not required, and that the deceptiveness of the mark must be judged on its own terms, not in conjunction with extraneous explanatory materials. This ruling sets a precedent that makes it difficult to register marks that contain a misdescription of a material quality of the product, thereby strengthening consumer protection against misleading trademarks.

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