On July 30, 2020, the U.S. Trademark Trial and Appeal Board (TTAB) issued a precedential decision holding, in effect, that the mark GUARANTEED RATE is too common for registration in the absence of a consumer survey showing acquired distinctiveness.

Applicant, Guaranteed Rate Inc., sought registration on the USPTO’s Principal Register of the plain word mark GUARANTEED RATE and a GUARANTEED RATE design mark for use with various mortgage financing and banking services. The examining attorney refused registration of the applied-for marks deeming the marks descriptive and finding Applicant’s claim of acquired distinctiveness insufficient. The examining attorney also refused registration of the subject marks on the ground that the term GUARANTEED RATE, as used in the marks, is incapable of functioning as a mark because it is merely informational.

In appealing the examining attorney’s refusal of registration, Applicant conceded that the phrase GUARANTEED RATE is merely descriptive of its services. However, Applicant argued that it had presented the examining attorney with sufficient evidence to carry its burden of proving acquired distinctiveness for the subject marks.

Despite Applicant’s arguments, the TTAB affirmed the examining attorney’s refusal of registration, finding the term GUARANTEED RATE to be highly descriptive—i.e., a “key aspect”—of Applicant’s services and concluding that Applicant had failed to satisfy the substantial burden of establishing acquired distinctiveness for the marks.

In determining whether the term GUARANTEED RATE has acquired distinctiveness, the TTAB considered the 6 factors set forth in In re Snowizard, Inc., 129 USPQ2d 1001, 1005 (TTAB 2018) (quoting Converse, Inc. v. ITC, 128 USPQ2d 1538, 1546 (Fed. Cir. 2018)):

[T]he considerations to be assessed in determining whether a mark has acquired secondary meaning can be described by the following six factors: (1) association of the [mark] with a particular source by actual purchasers (typically measured by customer surveys); (2) length, degree, and exclusivity of use; (3) amount and manner of advertising; (4) amount of sales and number of customers; (5) intentional copying; and (6) unsolicited media coverage of the product embodying the mark.

Applicant submitted evidence regarding the second, third, fourth, and sixth factors, but did not submit a consumer survey or other direct evidence. Specifically, Applicant submitted evidence showing, among other things, that:

1. 1. Applicant has used the phrase GUARANTEED RATE in connection with the recited mortgage services since at least as early as 2000;
   2. Applicant owns two registrations for GUARANTEED RATE AFFINITY for the same services, both of which issued with a claim of acquired distinctiveness for GUARANTEED RATE;
   3. Applicant spent more than $140 million promoting its services under the subject marks (primarily under the design mark);
   4. Applicant has received favorable media coverage; and
   5. Applicant is the fifth largest mortgage company in the United States.

The TTAB found Applicant’s advertising and sales figures “impressive.” However, the TTAB was “not convinced that this evidence demonstrates consumer recognition of this highly descriptive wording as indicating a single source because of the extensive evidence of third party use” of the term “guaranteed rate.” (emphasis added). The TTAB further held that, even if Applicant’s use of GUARANTEED RATE had been substantially exclusive since 2000, this factor, alone, would not be dispositive of the acquired distinctiveness question.

With respect to Applicant’s existing registrations, the TTAB acknowledged that, “inappropriate cases,” ownership of registrations of the “same mark” may be accepted as prima facie evidence of distinctiveness “if the goods or services are sufficiently similar to the goods or services in the application.” The TTAB, however, recognized that, under applicable Trademark Rules, the examining attorney can require further evidence from Applicant and, given the high degree of descriptiveness at issue with respect to the applied-for marks, Applicant faces a “proportionally higher burden” in showing acquired distinctiveness.

Here, the TTAB found Applicant’s existing registrations insufficient to support a finding of acquired distinctiveness for the subject marks because (1) the term GUARANTEED RATE is highly descriptive, (2) the prior registrations are less than 5 years old and still susceptible to a third party’s challenge on grounds of mere descriptiveness, and (3) the public understands and uses the phrase “guaranteed rate” to describe a feature of Applicant’s mortgage lending services. More specifically, the TTAB held: “Consumers are likely to perceive the term ‘Guaranteed Rate’ when used in connection with mortgage lending services not as a trademark for one company, but rather as a term commonly used by many entities in the industry.”

The TTAB specifically recognized that applicable law does not require survey evidence to establish acquired distinctiveness. However, the TTAB went on to conclude that Applicant’s sales and advertising figures, length of use, and prior registrations failed to establish acquired distinctiveness in the absence of survey evidence showing consumer recognition of the applied-for marks. In reaching this conclusion, the TTAB noted, “[O]ur society is better served if … highly descriptive or generic marks remain available for use among competitors.”

The TTAB affirmed the refusal of registration for the plain word mark and afforded Applicant 30 days in which to submit a disclaimer of the words “guaranteed rate” for the design mark.

The TTAB’s decision will likely raise some uncertainty among practitioners regarding what constitutes a “highly descriptive” mark and when evidence of extensive sales, advertising expenditures, and length of exclusive use are insufficient to prove acquired distinctiveness such that consumer survey becomes necessary to achieve registration.

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