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Trademark Client Alert: Foreign Companies Should Register Their Brand in the U.S. as Early as Possible

If your clients own or are developing brand names in countries other than the United States, and expansion into the United States is a goal, they should apply to register their brand (aka trademark) in the United States and work to initiate meaningful distribution or sales of products and services in the United States as early as possible. Without use and registration in the United States, brand owners cannot stop third parties from using similar – or even identical – brand names in the United States unless they can show that their brand has a significant reputation in the United States. This result holds even in cases where the brand is well-known in one or more countries outside of the United States and has huge sales abroad. Earlier this summer, Coca-Cola Company was unsuccessful in an attempt to cancel two U.S. registrations for two of its well-known Indian cola brands.

In June 2022, the Federal Circuit reversed a decision by the Trademark Trial and Appeals Board (TTAB) to cancel the U.S. registrations for “Thums Up” and “Limca” for cola and lemon-lime soda, respectively. See Meenaxi Enterprise, Inc. v. Coca-Cola Company, 38 F.4th 1067 (Fed. Cir. 2022). THUMS UP and LIMCA are long-established beverage brands in India; first used in the 1970s and acquired by Coca-Cola in 1993. The Indian High Court found, in 2014, that THUMS UP was “famous” and “well known” in India and that LIMCA was “well known” in India. Id. at 1069. Neither mark, however, was registered in the U.S., although both products had apparently been imported and sold in the United States by third-parties since 2005. Id.

Coca-Cola argued, and the TTAB agreed, that the well-known reputations of THUMS UP and LIMCA in India would necessarily extend to the significant population of Indian-Americans in the United States, including because the brands were sold in the U.S. in a number of Indian grocery stores. Id. at 1077-78. The Federal Circuit rejected this argument as not supported by sufficient evidence and based, at least in part, on “stereotyped speculation,” saying that “[t]here is no basis to assume that an American of Indian descent is aware of the brands in India.” Id. at 1978.

The Federal Circuit noted that Coca-Cola did not submit any credible evidence of lost sales in the United States, any evidence of meaningful sales of either brand in the United States, nor any evidence that an appreciable number of U.S. consumers were aware of its brand. Id. Without that, the mere existence of Indian-Americans was not sufficient to establish a reputation in the United States of a brand that was well-known in India. Id. A survey of Indian-American consumers might have supported Coca-Cola’s claims, but none was submitted. Id. at 1079. Similarly, Coca-Cola did not submit any evidence quantifying the volume of sales of its THUMS UP and LIMCA products in the U.S., but rather only a statement that it believed third parties sold the mark to Indian grocers in the U.S.; it did not submit evidence quantifying the number of U.S. grocery stores through which the products were sold. Id. at 1076, 78-79. Even, the Federal Circuit suggested, evidence about the portion of Indian-Americans that had either visited or spent time in India would have been some support; but no such evidence was submitted. Id. Had more evidence been in the record, the Federal Circuit may well have affirmed the TTAB’s decision to cancel the registrations.

The take away from this decision is that it is critical that owners of brands that are, or may become, well-known outside of the United States take steps to protect their brands in the United States if a U.S. expansion is in its plans. It also re-emphasizes the importance of seeking a U.S. registration and initiating (and retaining records of) U.S. use, even on a small scale, as early as possible.

If you would like further advice as to how your clients might establish a legally cognizable reputation for its brand in the United States or to discuss strategy for other options for protecting brands in the United States, please feel free to contact us.

JMBM’s Intellectual Property Group represents entrepreneurs, family-owned businesses, middle-market companies, startups, universities and the FORTUNE 500, handling patents, trademarks, copyrights, domain names, trade dress, trade secrets, and related licensing and litigation. Our approach is aggressive and efficient, and we keep a keen focus on helping clients achieve their goals.

This update is provided to our clients, business associates and friends for informational purposes only. Legal advice should be based on your specific situation and provided by a qualified attorney.