IP Law Daily, TRADEMARK—TTAB: Pepsi’s opposition to “Tortrix” trademark registration rejected, misuse of source claim merely speculative, (Sep 26, 2022)

By George Basharis, J.D.

Pepsi failed to state a claim even though the company sells snacks using the Tortrix name abroad.

PepsiCo failed to establish beyond speculation that Arriera Foods would use the TORTRIX mark in the United States to misrepresent the source of corn-based snacks, the Trademark Trial and Appeal Board has decided in a precedential decision, granting Arriera Foods’ motion to dismiss PepsiCo’s opposition to Arriera Foods’ registration of the trademark. Moreover, although PepsiCo sells snacks using the TORTRIX mark in Central and South America, the Board, in a precedential opinion, determined that PepsiCo failed to establish that it would suffer reputational harm in the United States or that Arriera Foods would not be entitled to use the TORTRIX trademark in this country. The Board further rejected PepsiCo’s claims that Arriera Foods made false statements in its trademark application that were intended to deceive the U.S. Patent and Trademark Office (PepsiCo, Inc. v. Arriera Foods LLC, September 20, 2022).

In 2020, Arriera Foods filed an application to register the standard character mark TORTRIX for corn-based snack foods. In its opposition to the application, PepsiCo alleged that for years PepsiCo has sold corn-based snack foods and related goods using the same name in many countries throughout Central and South America. According to PepsiCo, Arriera Foods planned to use the TORTRIX mark to misrepresent the source of its snack food products, did not have a bona fide intention to make lawful use of the applied-for mark in the United States, and sought to procure registration through fraud. Arriera Foods filed a motion to dismiss the opposition claiming that PepsiCo did not have standing to oppose registration of the trademark in the U.S. and failed to state a claim upon which relief could be granted.

The Board began by noting that although the Trademark Act did not expressly provide that misrepresentation of source is an available claim in an opposition, there was nothing in the nature of the claim itself that would limit its application to registered marks or cancellation proceedings. The Board also noted that the Act provides that a misrepresentation of source claim could be brought “at any time,” and public policy considerations and judicial economy supported allowing the claim in opposition proceedings. However, a plaintiff in an opposition must establish “misuse” of an applied-for mark by pointing to present, non-speculative, activity that is aimed at deceiving the public. In other words, a claim of misrepresentation of source may be asserted in opposition only if the opposed mark is in use.

Merely speculative. The Board found that PepsiCo had standing to assert its misrepresentation of source claim, even though the company did not own a U.S. trademark in TORTRIX, but the company’s assertions that Arriera Foods planned or intended to misuse the TORTRIX mark were merely speculative. PepsiCo did not allege any facts that would unequivocally support that Arriera Foods was using the TORTRIX mark. PepsiCo also failed to establish unequivocally that Arriera Foods was copying PepsiCo’s product packaging or advertising or deliberately trying to pass off its goods as those of PepsiCo. Finally, PepsiCo failed to establish that U.S. consumers were aware of the TORTRIX mark or that PepsiCo’s use of the mark in Central and South America had resulted in the mark having a reputation among consumers in the United States. Consequently, PepsiCo failed to state a claim for misrepresentation of source.

Bona fide intent. PepsiCo argued that Arriera Foods did not have a bona fide intent to use the TORTRIX mark in the United States because use of the mark in the U.S. would be unlawful under the Trademark Act. However, a trademark cancellation or opposition proceeding for misrepresentation of source does not decide whether the use of a mark is unlawful but instead whether the use supports registration. Determination of whether Arriera Foods’ use of the TORTRIX mark would be unlawful would require the Board to decide a matter outside of its jurisdiction, namely, false designation of origin.

Fraud. According to PepsiCo, Arriera Foods made the following false statements in its trademark application with the intent to deceive the U.S. Patent and Trademark Office: Arriera Foods was entitled to use the TORTRIX mark in commerce; the company had a bona fide intent to use the mark in commerce; and no one else had the right to use the mark in commerce. However, PepsiCo did not allege any facts to support the argument that Arriera Foods was not entitled to use the TORTRIX mark in commerce or that it subjectively believed it was not entitled to use the mark. Moreover, the Board had already rejected PepsiCo’s claim that Arriera Foods did not have a bona fide intent to use the mark. Finally, to establish that no one else had the right to use the mark in commerce, PepsiCo was required to establish that there was another use in commerce of a confusingly similar mark. The word “commerce” means commerce that may be lawfully regulated by Commerce, the Board explained. PepsiCo’s use of the TORTRIX mark in Central and South America was not a use in “commerce” that Congress could lawfully regulate, according to the Board. Consequently, PepsiCo failed to allege that it or any other entity was using the TORTRIX mark in “commerce” or that it had rights in the mark that were superior to Arriera Foods.

The case is Opposition No. 91269057.

Attorneys: David E. Armendariz (Pirkey Barber PLLC) for PepsiCo, Inc. Arriera Foods LLC for the USPTO.

Companies: PepsiCo, Inc.; Arriera Foods LLC

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