The Federal Circuit vacated a wrong, finding Cognac and hip-hop were linked by a song

How important is the relationship between music - especially hip-hop music - and cognac? The Federal Circuit found it important enough to vacate the opinion below and remand the question to the Trademark Trial and Appeal Board ("TTAB"). In an appeal from a case dismissing an Opposition, Bureau National Interprofessionnel du Cognac, Institut National Des Appellations D'Origine v. Cologne & Cognac Entertainment, No. 23-1100 filed August 6, 2024, the Federal Circuit found the TTAB erred in dismissing evidence that cognac "has an intimate and legendary history with music, particularly rap and hip-hop music, in the United States, including the use of authorized COGNAC products in song titles and lyrics, and in partnerships between hip-hop artists and certified COGNAC brands." The relevance of the relationship goes to the analysis of "likelihood of confusion," one of the two grounds asserted. It speaks to fame of the COGNAC term, and it speaks to whether consumers of Applicant's record label goods and services would perceive an affiliation with Opposer based on the use of the COGNAC term.

The history of the case is as follows. The TTAB had dismissed an opposition brought by owners of the certification mark for COGNAC against a trademark in the area of music. An opposition is an inter partes procedure in the TTAB allowing members of the public with a basis to allege harm to seek to preclude registration of an application otherwise acceptable to the Examining Attorney. Opposers here sought to preclude registration of a trademark that Applicant, a hip-hop record label, had filed for COLOGNE & COGNAC ENTERTAINMENT ("Entertainment" disclaimed), in a logo format. The challenged application claimed a broad array of goods and services typical of a record label. It did not claim cognac or any other spirits, food or drink.

Opposers are the entities "responsible for controlling and protecting the certification mark COGNAC for brandy manufactured in the Cognac region of France according to certain standards." The Opinion explains these standards: "The United States Alcohol and Tobacco Tax and Trade Bureau, the federal agency charged with regulating the labeling and advertising of spirits produced in the U.S., prohibits use of the term COGNAC on spirits except for '[g]rape brandy distilled exclusively in the cognac region of France, which is entitled to be so designated by the laws and regulations of the French Government.'" 27 C.F.R. Sec. 5.145(c)(2).

What are certification marks? Unlike trademarks, which indicate a single source of a product or service, certification marks are used by a person or other entity other than its owner with authorization from the certifier - that is, with authorization of the owner of the certification mark. 15 U.S.C. Secs. 1127(1), 1064(5). Here, businesses selling spirits meeting the certifier's standards for COGNAC are free to include the COGNAC mark on their labels and in advertising; they are free to accurately describe their qualifying spirits as COGNAC.

Certification marks protect an industry. They also protect the consumer who expects the goods or services they buy to meet the certifier's standards. Certification marks generally certify "regional or other origin, material, mode of manufacture, quality, accuracy or other characteristics." Regional examples besides COGNAC include FLORIDA oranges, PARMA ham, ROQUEFORT cheese, SCOTCH WHISKEY, and COLOMBIAN coffee. "Standards" certification mark examples include UNDERWRITERS LABORATORIES, ENERGY STAR, USDA ORGANIC, FH for the Federation of the Swiss Watch Industry, and many others. "Work/Labor" certification mark examples include UNION MADE. Each of these certification marks appears on the branded (and sometimes unbranded) goods and services of a great many unrelated entities - there is no "single source" of the goods offered under any certification mark. The certifier does not license the mark to the qualifying user. Indeed, a certification mark owner does not use the term as a trademark at all. Anyone meeting the certification standards can use the certification mark in connection with their qualifying goods or services with no interaction with the certifier. Another distinction? Certification marks are deemed "inherently distinctive" by the U.S. Patent and Trademark Office. This means geographic marks such as COGNAC need not have acquired distinctiveness before being protected and enforceable - unlike other place-name "primarily geographically descriptive" marks.

This is an unusual case because Opposers asserted their certification mark to preclude registration of a "regular" trademark whose application does not claim the goods that are the subject of the certification - cognac, in this case. Disputes involving certification marks more typically arise as follows: A company includes - in addition to its own brand - the certifier's certification mark for goods or services that are generally within the type of business or product encompassed by the certification mark but have not met the certifier's standards. For example, use of the certification mark USDA ORGANIC for foods not meeting that standard would violate the rights of the owner of that certification mark. This is not such a case. Applicant's COLOGNE & COGNAC ENTERTAINMENT brand is not used to represent that its goods are grape brandy distilled exclusively in the Cognac region of France - the TTAB's focus on this distinction was error.

The parties filed a Notice of Opposition on the basis that Applicant's COLOGNE & COGNAC mark for its music goods and services would cause a "likelihood of confusion" with Opposers' unregistered certification mark for COGNAC. (Opposers also asserted a claim for dilution, which was also dismissed by the TTAB). The divided TTAB dismissed the Opposition, finding no likelihood of confusion in large part because it found that the COGNAC mark was not strong or famous, and that the relevant goods, services, trade channels, and purchasers did not overlap.

As a threshold matter, it was not important that the certification mark asserted in the opposition was unregistered. Just as with a "regular" trademark, rights come from use - not registration.

How famous is "COGNAC"? How can we tell? The Federal Circuit found the "how can we tell" fame issue to be one of first impression before it in a certification mark case. The Federal Circuit found error in the TTAB's requirement that COGNAC must be famous for its certification status - rather than for its geographic significance. The Federal Circuit agreed with the TTAB that fame of geographic significance can be measured by evidence of substantial advertising expenditure and product sales by those in the industry who properly use the certification mark. But how can the TTAB weigh this evidence? The seller's own trademark usually appears in connection with the "certified" goods or services. Many consumers are therefore responding to the seller's brand - and not the certification mark on the label. The TTAB was nonetheless admonished to go figure it out, based on "context-specific evidence whether a portion of the sales and advertising evidence could be attributed to the COGNAC mark."

The Federal Circuit found the TTAB further erred in comparing Opposer's services of certifying and Applicant's goods, services and trade channels. "Rather, the proper comparison is between the goods, services, and trade channels of certified users of the COGNAC mark (e.g., HENNESSEY) to Applicant's goods, services and trade channels." (Emphasis in original). In other words, the Federal Circuit instructed the TTAB to evaluate a likelihood of confusion by considering the Applicant's goods in the context of the certified goods (here, COGNAC) offered by companies whose goods meet the certification standard. It was error to compare the business of "certifying" with Applicant's use of the COGNAC mark for record label goods and services.

What hangs in the balance for the Applicant on remand is the registration - or not -- of its mark COLOGNE & COGNAC ENTERTAINMENT. But the over-arching significance of the case concerns the boundaries of enforcing certification marks in the TTAB. The evidence seems to support a connection between the musical goods and services Applicant claimed and COGNAC itself. This is a key factor favoring these Opposers. But it doesn't end there. Certification mark Opposers in this case and others have new guidance from the Federal Circuit. They must persuade the TTAB that evidence of sales and advertising of goods meeting their certification standards are relevant to those standards and not primarily attributable to the brands of those offering such goods.