Meenaxi Enterprise, Inc. v. the Coca-Cola Company
Not available in text (2022)
Premium Feature
Subscribe to Lexplug to listen to the Case Podcast.
Rule of Law:
To establish a statutory cause of action under Lanham Act § 14(3) for cancellation of a mark based on misrepresentation of source, a party must demonstrate an injury to a commercial interest in reputation or sales that is proximately caused by the alleged violation and occurs within the United States.
Facts:
- Parle (Exports), Limited of Bombay, India, introduced the Limca lemon-lime soft drink in India in 1971 and the Thums Up cola in India in 1977.
- Coca-Cola Company purchased Parle in 1993, acquiring Parle’s Indian registrations of the THUMS UP and LIMCA marks, and now sells these beverages in over 2.6 million retail outlets throughout India and in several other foreign countries.
- Since at least 2005, third parties purchased authentic Coca-Cola Thums Up and Limca products in India and imported and resold them in Indian grocery stores, restaurants, and other retail outlets in the U.S.
- Meenaxi Enterprise, Inc. began selling beverages to Indian grocers in the United States in 2008 using the THUMS UP and LIMCA marks, after finding no active U.S. registrations for these marks in the USPTO database.
- In 2012, Meenaxi Enterprise, Inc. sought and was granted U.S. registrations for the THUMS UP and LIMCA marks.
- Meenaxi's founder and president admitted awareness of Coca-Cola's Thums Up and Limca beverages in India, and Meenaxi intentionally adopted logos and a slogan similar to Coca-Cola's, changing them only after Coca-Cola objected.
Procedural Posture:
- Coca-Cola Company initiated cancellation proceedings before the U.S. Patent and Trademark Office's Trademark Trial and Appeal Board (TTAB) under § 14(3) of the Lanham Act, seeking to cancel Meenaxi Enterprise, Inc.'s registrations for THUMS UP and LIMCA marks for misrepresentation of source.
- The TTAB ruled in favor of Coca-Cola Company, holding that Meenaxi Enterprise, Inc. was misrepresenting the source of its goods, and consequently cancelled Meenaxi's THUMS UP and LIMCA registrations.
- Meenaxi Enterprise, Inc. (appellant) appealed the TTAB's decision to the United States Court of Appeals for the Federal Circuit (with Coca-Cola Company as appellee).
Premium Content
Subscribe to Lexplug to view the complete brief
You're viewing a preview with Rule of Law, Facts, and Procedural Posture
Issue:
Does a foreign brand owner, without established U.S. trademark rights, have a statutory cause of action under Lanham Act § 14(3) to cancel a registered mark based on alleged U.S. lost sales or reputational injury when its reputation is primarily foreign and it has minimal or no direct U.S. commercial activity under those marks?
Opinions:
Majority - Circuit Judge Dyk
No, Coca-Cola Company does not have a statutory cause of action under Lanham Act § 14(3) because it failed to establish that it suffered cognizable U.S.-based lost sales or reputational injury proximately caused by Meenaxi's use of the marks. Applying the Lexmark standard, the court found Coca-Cola presented no evidence of its own lost sales in the U.S. for Limca and only de minimis, unquantified sales for Thums Up at specific locations, without showing that Meenaxi's activities caused any loss. The court clarified that nebulous future plans for U.S. sales cannot form the basis of a Lanham Act claim. Regarding reputational injury, the court stated that cognizable economic and reputational injury occurs when consumer deception causes them to withhold trade from the plaintiff. The Board's finding that Coca-Cola's foreign reputation for THUMS UP and LIMCA marks would extend to the United States among Indian-American consumers was not supported by substantial evidence. The court rejected assumptions about Indian-American awareness of Indian brands and found that unsubstantiated affidavits of 'understanding' lacked evidentiary weight. A single customer comment recognizing THUMS UP from India, due to travel, was deemed insufficient to establish widespread U.S. consumer awareness. Furthermore, copying of a foreign mark does not serve as evidence of U.S. reputation, consistent with the territoriality principle and the Person's Co. v. Christman precedent.
Concurring - Circuit Judge Reyna
Yes, Coca-Cola Company failed to establish statutory standing under § 14(3) of the Lanham Act, and the Board’s cancellation of Meenaxi's marks should be reversed. Judge Reyna concurs, emphasizing that the territoriality principle is fundamental to trademark law, meaning trademark rights are country-specific and U.S. priority depends solely on U.S. use. Therefore, damage to foreign trademark rights or goodwill associated with foreign use does not constitute 'damage' under 15 U.S.C. § 1064, as the Lanham Act does not, by default, vindicate extraterritorial injury. Judge Reyna notes that the majority's factual inquiries into lost U.S. sales and reputational injury are inherently linked to the territoriality principle and the 'well-known mark' exception. While acknowledging that some courts, like the Ninth Circuit in Grupo Gigante, recognize a 'famous-mark exception,' Judge Reyna asserts that Coca-Cola explicitly waived reliance on this exception in this case. Thus, even if U.S. consumer awareness of Coca-Cola's Indian brands could have been proven, the territoriality doctrine would still govern, and the waiver of the exception would preclude recovery.
Analysis:
This case significantly reinforces the strict application of the territoriality principle in U.S. trademark law, dictating that a foreign trademark holder must demonstrate actual or potential commercial injury within the United States to establish standing for a Lanham Act claim. The decision elevates the evidentiary burden on plaintiffs, requiring concrete proof of U.S. market presence and direct commercial harm, rather than relying on foreign reputation, assumptions about consumer awareness, or speculative future plans. This ruling may make it more challenging for foreign brand owners without substantial U.S. market penetration to successfully challenge U.S. trademark registrations, even if those registrations appear to 'copy' well-known foreign marks, unless a recognized exception like the 'well-known mark' doctrine is successfully invoked.
