You might be wondering what cognac, hip-hop and fame have in common. The answer, at least in a recent opinion by the U.S. Court of Appeals for the Federal Circuit, is certification trademarks. We have written in the past about certification marks and how they differ from trademarks. Briefly, trademarks indicate the source of goods or services, e.g., a swoosh on sneakers indicates they originate with Nike, while certification marks indicate a product's compliance with a standard that may be related to geography (Idaho potatoes), quality (Woolmark) or characteristics of production (union label).
Cognac is a grape brandy that comes from the Cognac region of France and conforms to standards enforced in part by the French government. Though not a registered mark in the U.S., it has long been recognized as a common-law certification mark, which indicates a combination of geographic origin, quality and methods of production. Only brandies that meet those standards are legally permitted to use the COGNAC mark. These standards are enforced in the U.S. through the Alcohol and Tobacco Tax and Trade Bureau under 27 C.F.R. § 5.145(c)(2). But what about using COGNAC for non-alcohol-related goods or services? The answer, depending on whether the certification mark is famous, is maybe.
In 2019, Cologne & Cognac Entertainment ("C&CE"), a hip-hop record label, applied to register the mark COLOGNE & COGNAC ENTERTAINMENT for live and recorded music performances. The Bureau National Interprofessionnel du Cognac (owner of the mark) and Institut National des Appellations d'Origine (a French government administrative agency responsible for the regulations for the production of Cognac) (collectively, the Opposers) opposed C&CE's application, claiming in part that the proposed mark was likely to confuse consumers. In a split decision, the Trademark Trial and Appeal Board (the "Board") rejected the opposition, basing its ruling in part on finding that the Opposers failed to prove that the COGNAC mark was famous and, therefore, was entitled to only "a normal scope of protection" for purposes of the Board's likelihood of confusion analysis.1
Famous Marks
The strength of a mark varies along a spectrum from very strong to very weak. A famous mark is a "dominant factor" in determining likelihood of confusion because it is afforded a broad scope of protection – meaning that if a mark appears somewhat similar to a famous mark but is used for arguably unrelated goods or services (e.g., spirits vs. music entertainment services), consumer confusion may still be likely due to the mark's widespread public recognition and renown. Though it is rare for an unregistered mark to be found famous, in a fairly scathing decision vacating and remanding the Board's decision, the Federal Circuit, in Bureau Nat'l Interprofessionnel du Cognac v. Cologne & Cognac Entm't,2 found that the COGNAC mark may be famous.
According to the court, a fundamental legal error by the Board was its requirement that the public recognition and renown of a certification mark must relate to its "certification status" or "function" as a certification mark. In other words, consumers recognized the goods as being certified rather than for other indicators such as geographic origin, quality or methods of production. Rejecting this conclusion, the court held that a certification mark "need not be famous for all of its indications, and it need not be famous for its certification function." Instead, the Board was required to consider whether Cognac was "famous as an indicator of its geographic origin."
The court also disagreed with the Board's consideration of the evidence offered by the Opposers to establish the fame of the COGNAC mark. Indeed, despite recognizing that "Cognac" was "a popular spirit in the United States, with impressive sales" and that "the record [was] replete with use of the term 'cognac' … in articles, including from some well-known publications," the Board rejected this evidence because it did not "provide sufficient support for an unequivocal conclusion" that the COGNAC mark was famous. In support of this conclusion, the Board reasoned that the evidence was either based on the certified users' branded products' sales and advertisements (e.g., HENESSEY and REMY MARTIN) or the use of COGNAC on the products or in advertisements and news articles was often inconspicuous compared to the product trademarks or used with a lowercase "c."
In an issue of first impression, the court found that it was legal error for the Board to require "unequivocal" evidence that the sales were driven by the certification mark as opposed to any accompanying house or product marks. The court noted that by their very nature, certification marks are only used on third-party products, therefore, they will often be used with a house brand or product trademark. They may also appear in an inconspicuous manner compared to such brands or trademarks; thus, the "prominence, or lack thereof," of a certification mark should not be determinative of fame. Instead, the Board must determine, based on "context-specific evidence," whether some portion of the sales and advertising evidence should be attributed to the COGNAC mark.
Notably, the court found that the very evidence relied on by the Board to show that COGNAC was not famous because of its inconspicuous use or placement appeared to show the opposite – the consistent and frequent use of COGNAC irrespective of or without the mention of a house brand or product mark. The court concluded that setting aside the legal errors related to the Board's fame analysis, these factual inconsistencies show that the conclusion that COGNAC was not famous was not supported by substantial evidence.
Takeaway
Though it may be counterintuitive that an unregistered certification mark for a certain type of spirit may block the use by a hip-hop record label of a similar mark for music entertainment services, under U.S. law it is possible. Companies should take care to evaluate the potential strength of any similar certification marks even those for wholly disparate goods or services. Failing to do so could result in a branding hangover much worse than diluting your finest Cognac.
Stay Tuned
Because the Federal Circuit vacated and remanded the Board's decision dismissing the Opposers' opposition, it remains to be seen whether COGNAC will be the first unregistered certification mark found to be famous – and, if so, how any such fame may impact the Board's likelihood of confusion analyses. Also, the Bureau National Interprofessionel du Cognac has in the meantime applied to register COGNAC as a certification mark for "grape brandy distilled in the Cognac region of France in compliance with the laws of the French government." Apart from its connection to this case, the application is notable for a "first use anywhere" date of 1643, and a "first use in commerce" date of 1794. The application is pending.
Notes
1 Bureau Nat'l Interprofessionnel Du Cognac & Institut Nat'l Des Appellations D'origine, No. 91250532, 2022 WL 3755301, at *10 (Aug. 25, 2022). Notably, this finding was the opposite of a prior 1998 Board decision that found that the COGNAC certification mark "would fall on the very strong end of the spectrum of fame for purposes of the likelihood of confusion analysis…" Institut Nat'l Des Appellations D'origine v. Brown-Forman Corp, 47 U.S.P.Q.2d 1875 (T.T.A.B. 1998).
2 110 F.4th 1356, 1366 (Fed. Cir. 2024).
