U.S. Trademark Board Issues Mixed Opinion in Soft-Drink 'Zero' Dispute

By Mike Esterl 

U.S. trademark authorities said Coca-Cola Co. doesn't have exclusive rights to use "zero" even as they agreed to register the common English word for the company's diet-soda and sports-drink brands.

The mixed opinion by the Trademark Trial and Appeal Board in a nearly decadelong dispute between Coke and rival Dr Pepper Snapple Group Inc. means any future beverage-industry tussles over the use of "zero" likely would be need to be resolved in federal courts.

Coke began trying to register U.S. rights to the word "zero" in 2003 for its zero-calorie drinks, including Coca-Cola Zero, Sprite Zero and Powerade Zero. That triggered a 2007 challenge from Dr Pepper, which markets Diet Rite Pure Zero, a diet soda.

Dr Pepper argued in filings with the U.S. Patent and Trademark Office that "zero" is a generic term and shorthand for zero calories when it comes to beverage brands. Giving Coke exclusive rights to the word would grant "a monopoly to use a common English word in its common English meaning," it added.

Coke argued in filings that "zero," when used as part of a beverage brand name, is exclusively associated with its company's products because of extensive marketing and because its sales dwarf rivals. Competing brands that use "zero" like Dr Pepper's Diet Rite Pure Zero confuse consumers, it argued.

After reviewing 170 filings and more than 5,000 pages of documentation, the Patent and Trademark Office's trial and appeal board issued a written opinion Monday that leaves the door open to more legal challenges.

In a victory for Coke, the board wrote Dr Pepper hadn't proven that "zero" is a generic term among beverages and wrote that Coke's "zero" soda and sports drink brands had "acquired distinctiveness" and qualified as "substantially exclusive." Other than Dr Pepper's Diet Rite Pure Zero, third-party use of the term in soft drink brands appeared inconsequential, it added.

But in a victory for Dr Pepper, the board wrote that Coke hadn't proven consumer confusion and that Dr Pepper also could register Diet Rite Pure Zero as a trademark. That is because the full brand name, not just the term "zero," made it "inherently distinctive," it added.

The three-judge panel of administrative trademark judges also wrote that its opinion didn't set a precedent. That means any other beverage-industry disputes over the use of "zero" would have to be considered on their own merits, further diluting the decision.

Atlanta-based Coke said Friday it was pleased with the board's decision but declined to comment further, including whether it planned any more legal actions.

Dr Pepper, based in Plano, Texas, said it was pleased that it can register the trademark "Diet Rite Pure Zero" but will consider a legal appeal to ensure beverage companies other than Coke can freely use "zero."

Companies can still sue each other for infringement in federal courts even after trademarks are registered. Courts can take earlier opinions from the trademark dispute board into account in rulings, but aren't bound by them.

Jacob Jacoby, a marketing professor at New York University, said Coke could face a high bar if it challenges beverage companies' use of "zero" in court after not demonstrating consumer confusion in the case of Diet Rite Pure Zero.

Jane Shay Wald, who chairs the law firm Irell & Manell LLP's trademark practice, said the trademark dispute board's decision this week would have "extremely limited value" in court because the board didn't set a precedent.

Trademark authorities in Canada and the U.K. rejected earlier attempts by Coke to trademark the word "zero" for its brands.

Write to Mike Esterl at [e-mail]

(END) Dow Jones Newswires

May 27, 2016 18:46 ET (22:46 GMT)

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