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Timex Group Usa, Inc. v. Focarino

United States District Court, Fourth Circuit

December 17, 2013

TIMEX GROUP USA, INC., Plaintiff,
v.
MARGARET A. FOCARINO, Commissioner of Patents, Defendant.

MEMORANDUM OPINION

T. S. ELLIS, III, District Judge.

At issue on cross-motions for summary judgment in this 15 U.S.C. § 1071(b)(1) action seeking review of a decision from the Patent and Trademark Office ("PTO")'s Trademark Trial and Appeal Board ("TTAB") is whether the TTAB erred in denying registration for the term "INTELLIGENT QUARTZ" in connection with Timex watches on the ground that the term is descriptive. More specifically, the two questions presented here are:

i. Whether the TTAB's determination that INTELLIGENT QUARTZ is descriptive is supported by substantial evidence in the administrative record; and
ii. Whether, on the basis of the record as a whole, including the administrative record and the new evidence submitted to the district court, plaintiff has met its burden of showing that INTELLIGENT QUARTZ is suggestive and thus deserving of trademark protection.

For the reasons that follow, the TTAB erred in denying registration; INTELLIGENT QUARTZ is suggestive rather than descriptive and thus merits trademark protection. Accordingly, plaintiffs motion for summary judgment must be granted, and defendant's motion for summary judgment must be denied.

I.

Plaintiff Timex Group USA, Inc. ("Timex"), a Delaware corporation and well-known American watch manufacturer, filed an intent-to-use application on October 29, 2010 for the term INTELLIGENT QUARTZ in connection with watches.[1] In an Office Action issued on December 15, 2010, the PTO Trademark Examining Attorney refused to register INTELLIGENT QUARTZ on the ground that it was merely descriptive of a characteristic or feature of the identified goods. Plaintiff filed a response on January 10, 2011, arguing that the words INTELLIGENT and QUARTZ, when used together, are suggestive rather than descriptive because they do not immediately convey to the consumer any characteristics or features of the relevant Timex watches. The PTO Examining Attorney disagreed, and on February 5, 2011, issued a Final Office Action denying registration. A subsequent Office Action, on August 16, 2011, denied plaintiffs request for reconsideration. Plaintiff then appealed this ruling to the TTAB, arguing that the PTO erred in finding the term descriptive. Thereafter, on July 26, 2012, the TTAB affirmed the Examining Attorney's refusal to register the term INTELLIGENT QUARTZ as a trademark. In re Timex Group USA, Inc., No. 85164601 (T.T.A.B., July 26, 2012) [hereinafter Timex ].

In affirming the Examining Attorney's ruling, the TTAB concluded that the term is merely descriptive, stating that "consumers and prospective consumers viewing the mark INTELLIGENT QUARTZ as applied to watches will understand the mark to mean that the watch contains a quartz component controlled by a computer chip." Id. at 10. In support of this finding, the TTAB rejected Timex's argument that consumers would need to "stop and consider" what INTELLIGENT and QUARTZ mean when combined, and concluded instead that "[t]he mark does not convey any multiple meanings, double entendre or incongruity." Id. at 11. As such, the TTAB held that "the individual components of the mark, the words Intelligent' and Quartz' retain their descriptive meaning when used in connection with watches with a quartz component controlled by a computer chip." Id. at 11-12.

Thereafter, on September 25, 2012, plaintiff filed this action seeking review of the TTAB's decision pursuant to 15 U.S.C. § 1071(b)(1), arguing that the TTAB erred in finding that the term INTELLIGENT QUARTZ is merely descriptive. Plaintiff seeks (i) reversal of the TTAB's decision, (ii) a declaration that the term INTELLIGENT QUARTZ is suggestive, (iii) an Order requiring the PTO to approve the application for registration, and (iv) any other relief deemed proper. The parties have filed cross-motions for summary judgment that have been fully briefed and argued. The motions present the question whether the TTAB erred in finding that the term INTELLIGENT QUARTZ is descriptive rather than suggestive.

II.

The summaryjudgment standard is too well-settled to merit extended discussion, and the parties do not dispute the standard. Summary judgment should not be granted when the non-moving party has "set forth specific facts showing that there is a genuine issue for trial" through "affidavits or as otherwise provided." Rule 56, Fed.R.Civ.P. A genuine factual dispute exists "if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).

III.

Plaintiff has filed this action under 15 U.S.C. § 1071(b)(1), which allows trademark applicants dissatisfied with the TTAB's decision either to appeal to the Court of Appeals for the Federal Circuit or to file an action in district court.[2] Where, as here, the plaintiff files an action in the district court, the district court "sits in a dual capacity, ' serving on one hand as the finder of fact with respect to new evidence presented by the parties, and on the other as an appellate reviewer of facts found by the TTAB." Glendale Intern. Corp. v. U.S. Patent & Trademark Office, 374 F.Supp.2d 479, 485 (E.D. Va. 2005). On review, federal district courts have the power to modify the TTAB decision and declare that the plaintiffs mark is entitled to registration.[3]

When acting as an appellate reviewer in an action under § 1071(b)(1), a district court reviews the TTAB's findings of fact deferentially and must uphold those findings of fact if they are supported by "substantial evidence" under the Administrative Procedure Act ("APA").[4] The TTAB's finding that a term is descriptive is a finding of fact subject to review under the substantial evidence standard. See 2 McCarthy on Trademarks and Unfair Competition § 11.3 (4th ed. 2013) [hereinafter McCarthy]. And substantial evidence, the Supreme Court teaches, is "more than a mere scintilla of evidence" and requires "such relevant evidence as a reasonable mind would accept as adequate to support a conclusion." In re Pacer Technology, 338 F.3d 1348, 1349 (Fed. Cir. 2003) (quoting Consol. Edison v. N.L.R.B., 305 U.S. 197, 229 (1938)). Further, as the Federal Circuit has noted, "a review for substantial evidence involves examination of the record as a whole, taking into account evidence that both justifies and detracts from an agency's decisions.'" On-Line Careline, 229 F.3d at 1086 (quoting Universal Camera Corp. v. N.L.R.B., 340 U.S. 474, 487-88 (1951)). Thus, a finding of fact by the TTAB will not be "upset unless it is not supported by substantial evidence." 3 McCarthy § 21:21 (citing Dickinson v. Zurko, 527 U.S. at 165). Moreover, "the possibility of drawing two inconsistent conclusions from the evidence does not prevent an administrative agency's finding from being supported by substantial evidence." Id. (quoting Consolo v. Federal Maritime Comm'n, 383 U.S. 607, 620 (1966)). In sum, as the Federal Circuit instructs, the TTAB's decision "may not be reversed... even if [the reviewing court] would have viewed the facts differently if sitting as the tribunal of original jurisdiction, " provided that substantial evidence supports the TTAB's ruling. DuoProSS Meditech Corp. v. Inviro Med. Devices, Ltd., 695 F.3d 1247, 1252 (Fed. Cir. 2012). If the evidence before the TTAB supports two conclusions, "the Board's decision to favor one over the other... must be sustained... as supported by substantial evidence." Id.

By contrast, where a district court in a § 1071(b)(1) action acts as a finder of fact with regard to new evidence submitted by the parties, the district court reviews this new evidence de novo and makes findings of fact on whether the putative mark warrants trademark protection.[5] Of course, in reviewing newly-submitted evidence, a district court must bear in mind that the plaintiff has the "laboring oar to establish error by the [TTAB]" by a preponderance of the evidence, because plaintiff"does not start over to prosecute his application before the district court unfettered by what happened in the PTO." Fregeau v. Mossinghoff, 776 F.2d 1034, 1036-38 (Fed. Cir. 1985). Thus, the plaintiffs evidence must be sufficient to establish by a preponderance of the evidence, based on the record as a whole, including the administrative record, that the proffered mark warrants trademark protection.

Accordingly, the analysis in this case proceeds as follows. First, the TTAB's finding of fact-viz., the TTAB's conclusion that the term INTELLIGENT QUARTZ is merely descriptive-must be reviewed deferentially pursuant to the substantial evidence standard. Next, the new evidence submitted by the parties must be reviewed de novo to determine what findings of fact are warranted by this new evidence. Finally, in the event that the new evidence warrants findings that contradict, or are inconsistent with, the TTAB's factual findings, the district court must then consider whether the record as a whole establishes that plaintiff has borne its burden of proving by a preponderance of the evidence that the term INTELLIGENT QUARTZ is suggestive in connection with Timex watches and is therefore a protectable mark.

IV.

The following well-settled principles provide the lens through which both the TTAB's descriptiveness determination and the parties' new evidence must be viewed and evaluated. Marks can be sorted into the following four categories along a spectrum of distrinctiveness-the more distinctive the mark, the more likely it is to warrant trademark protection: (i) generic, (ii) descriptive, (iii) suggestive, and (iv) arbitrary or fanciful. Abercrombie & Fitch Co. v. Hunting World, Inc., 537 F.2d 4, 9 (2d Cir. 1976); 2 McCarthy § 11.2. Of course, generic terms do not deserve trademark protection whereas arbitrary or fanciful terms generally do. Abercrombie, 537 F.2d at 9. By contrast, marks determined to be suggestive are deemed protectable, while descriptive marks are protectable only if they have acquired secondary meaning.[6] Fortune Dynamic, Inc. v. Victoria's Secret Stores Brand Management, Inc., 618 F.3d 1025, 1033 (9th Cir. 2010). The Seventh Circuit has explained that the rationale for prohibiting the use of descriptive terms as trademarks as follows:

The rationale... rests upon the equal right of another individual producing and marketing a similar product to describe his or her product with similar accuracy. Were this right not protected by the law, elements of the language could be monopolized in such a way as to impoverish others' ability to communicate. Gimix, Inc. v. JS & A Group, Inc., 699 F.2d 901, 907 (7th Cir. 1983).

In order to be labeled "descriptive, " a word or phrase must give some "reasonably accurate" or "tolerably distinct" "knowledge... as to what that product is made of." Blisscraft of Hollywood v. UnitedPlastics Co., 294 F.2d 694, 699 (2d Cir. 1961). If, by contrast, a consumer is required to "use imagination or any type of multistage reasoning to understand the mark's significance, " the mark is considered suggestive rather than descriptive. Zobmondo Entm't, LLC v. Falls Media, LLC, 602 F.3d 1108, 1114 (9th Cir. 2010). For obvious reasons, this process of mental gymnastics is referred to as the "imagination test." The Federal Circuit has elucidated this distinction between descriptive and suggestive marks as follows:

A mark is merely descriptive if it immediately conveys information concerning a quality or characteristic of the product or service. The perception of the relevant purchasing public sets the standard for determining descriptiveness. Thus, a mark is merely descriptive if the ultimate consumers immediately associate it with a quality or characteristic of the product or service. On the other hand, if a mark requires imagination, thought, and perception to arrive at the qualities or characteristics of the goods, then the mark is suggestive. In re MBNA Am. Bank, N.A., 340 F.3d 1328, 1332 (Fed. Cir. 2003) (internal citations and quotation marks omitted).

The essential factors to be considered in the imagination test are: (i) the length and breadth of the required mental leap, (ii) the directness of the association between the mark to some characteristic of the product, and (iii) whether or not the link between the mark and the nature of the product is immediate. 2 McCarthy § 11:67.

A second, less frequently-used test, known as the "competitors' need test, " and referred to by the parties as the "commercial needs test" asks whether "the message conveyed by the mark about the goods or services is so direct and clear that competing sellers would be likely to need to use the term in describing their goods in advertising and promotion." 2 McCarthy § 11:68. According to the leading commentator in the field, a court applying this test should ask: "Is descriptive information conveyed by the mark so remote and subtle that it is [un]likely to be needed by competitive sellers to describe their goods or services?" Id. If the answer is yes, then the mark islikely suggestive.[7]

As is the case with INTELLIGENT QUARTZ, two or more words may be combined to form what is referred to as a composite mark. It is well-settled that two or more words which are themselves descriptive may be combined to form a composite that is, as a whole, considered suggestive. See 2 McCarthy § 11.26. The classic example used to illustrate this point is the mark SUGAR & SPICE used on bakery products. Although each of the terms SUGAR and SPICE individually is descriptive, "when combined and used on bakery goods, " the U.S. Court of Customs and Patent Appeals held that the words "may function as an indication of more than a mere description of the ingredients of the goods on which the mark is used and, .. are not merely descriptive' of such goods within the meaning of section." In re Colonial Stores, Inc., 394 F.2d 549, 552 (C.C.P.A. 1968). A composite mark must be evaluated as a whole and not divided into its component parts because "[t]he commercial impression of a trade-mark is derived from it as a whole, not from its elements separated and considered in detail." Estate of P.D. Beckwith, Inc., v. Comm'r of Patents, 252 U.S. 538, 545-46 (1920). But, "[i]n considering a mark as a whole, the Board may weigh the individual components of the mark to determine the overall impression or the descriptiveness of the mark and its various components." In re Oppedahl & Larson LLP, 373 F.3d 1171, 1174 (Fed. Cir. 2004). It remains to apply these principles to the questions presented.

V.

Analysis properly begins with a review of the TTAB's finding that the proffered mark is descriptive under the deferential substantial evidence standard. The TTAB relied on the following evidence entered into the administrative record in reachingthis finding:

i. Dictionary definitions of the word INTELLIGENT;[8]
ii. Three advertisements for Timex INTELLIGENT QUARTZ watches;[9]
iii. Articles on industry websites that discuss INTELLGENT QUARTZ as a watch technology;[10] and
iv. Information referring to Seiko INTELLIGENT QUARTZ watches produced during the time period that Seiko held trademark registration for the mark INTELLIGENT QUARTZ.[11]

Relying on this evidence, the TTAB used the following line of reasoning to reach its descriptiveness finding pursuant to the imagination test:

i. INTELLIGENT, in the computer science context, is defined as capable of data processing, and
ii. INTELLIGENT, in this mark, modifies QUARTZ; therefore
iii. the mark describes "aquality orcharacteristic of the product";[12] specifically that "the watch contains a quartz component controlled by a computer chip."[13]

In other words, the TTAB concluded that because INTELLIGENT has a particular meaning in the field of electronics-"equipped with a microprocessor or computer"[14]-consumers would understand INTELLIGENT QUARTZ to describe a quality or characteristic of the watch; namely that "the watch contains a quartz component controlled by a computer chip." Timex at 10.

In reaching the conclusion that the mark is descriptive, the TTAB rejected Timex's argument that the alternative definitions of INTELLIGENT require consumers to use imagination to discern the meaning of INTELLIGENT QUARTZ, finding instead that the words INTELLIGENT and QUARTZ retain their individual descriptive meanings even in the context of a composite mark. Id. at 11-12.[15] Therefore, the TTAB determined under the imagination test that INTELLIGENT QUARTZ in connection with Timex watches is descriptive.

The TTAB's determination that the composite mark INTELLIGENT QUARTZ is descriptive is contrary to substantial evidence in the administrative record. This is so because the lynchpin of the TTAB's descriptiveness finding is the erroneous factual finding that "the watch contains a quartz component controlled by a computer chip." Id. at 10. To the contrary, there is no support in the administrative record for the proposition that the quartz component in a Timex INTELLIGENT QUARTZ watch is controlled by a computer chip. Indeed, the quartz component is not so controlled. Rather, the administrative record demonstrates that, as with any quartz timepiece, the quartz crystal in a Timex INTELLIGENT QUARTZ watch oscillates at a precise frequency, creating a time base for the watch. Microprocessors do not control the quartz, but instead work off of the time base set by the quartz to control the watch's advanced features, such as the perpetual calendar or chronograph. Accordingly, INTELLIGENT is not descriptive of the QUARTZ component in a Timex INTELLIGENT QUARTZ watch.

A review of the evidence relied on by the TTAB confirms the absence of substantial evidence to support the TTAB's finding that the quartz component is controlled by a computer chip. Thus, to begin with, the TTAB took judicial notice of the Encyclopedia Britannica entry for "clock" in its decision, which accurately states that:

The timekeeping element of a quartz clock consists of a ring of quartz about 2.5 inches (63.5 mm) in diameter, suspended by threads and enclosed in a heat-insulated chamber. Electrodes are attached to the surfaces of the ring and connected to an electrical circuit in such a manner as to sustain oscillations.... The vibrations are so regular that the maximum error of an observatory quartz-crystal clock is only a few ten-thousandths of a second per day, equivalent to an error of one second every 10 years. Timex at 5 (quoting "Clock, " Encyclopedia Britannica Online Academic Edition (2012)).

After taking judicial notice of the encyclopedia entry that describes how quartz time-keeping devices function, the TTAB cited the three Timex advertisements in the administrative record, [16] arguing that they "corroborate [the] finding of fact" that INTELLIGENT QUARTZ watches "contain[] a quartz component controlled by a computer chip." Timex at 10. Yet, the three referenced advertisements contain no such representation. Nor is this surprising, given that it is not the case that a computer chip controls the quartz crystal.

The TTAB provided no additional evidentiary support from the administrative record for the finding of fact upon which its descriptiveness determination was premised. And indeed, there is no evidence in the administrative record that the quartz component in a Timex INTELLIGENT QUARTZ watch functions any differently from the quartz component in any other timekeeping device; viz., that the quartz crystal oscillates to provide a time base for the device. Specifically, there is no evidence, much less substantial evidence, in the administrative record to support the proposition that the quartz components in Timex INTELLIGENT QUARTZ watches are controlled by computer chips, as the TTAB asserted. See id. at 10. Thus, INTELLIGENT is not descriptive of QUARTZ in connection with Timex INTELLIGENT QUARTZ watches. It follows that there is not substantial evidence to support the TTAB's finding of descriptiveness.

VI.

The conclusion that the TTAB's decision is not supported by substantial evidence does not end the analysis. Because Timex has chosento sue in district court, rather than appeal to the Court of Appeals for the Federal Circuit, the parties had the opportunity to introduce new evidence here not considered by the TTAB.[17] Both parties did so, and it is now necessary to ascertain this new evidence de novo and to determine whether the record as a whole reflects that plaintiff has established, by a preponderance of the evidence, that the term INTELLIGENT QUARTZ is suggestive and thus entitled to trademark protection.

The new evidence submitted by the parties covers a wide variety of sources. This is appropriate because it is well-settled that evidence as to descriptiveness vs. suggestiveness "may be obtained from any competent source, such as dictionaries, newspapers, or surveys." Dalton v. Honda Motor Co., Ltd., 425 Fed.Appx. 886, 892 (Fed. Cir. 2011). In addition, courts may consider third-party registrations[18] among these competent sources, as"probative evidence of the meaning of a word, in the same way that a dictionary can be used." 2 McCarthy § 11:69. Yet, it must be remembered that third-party registrations "are not conclusive on the question of descriptiveness." Dalton, 425 Fed.Appx. at 894. Consistent with the broad range of materials relevant to the descriptiveness vs. suggestiveness issue, both parties have submitted towering binders brimming with dictionary definitions, encyclopedia entries, watch advertisements, trade press, and third-party registrations[19] to support their arguments. Specifically, the parties have submitted the following new evidence for this action before the district court.

New Evidence Submitted by Plaintiff:

1) Declaration of Louis Galie, Senior Vice Presidentof Technology at Timex, assertingthat "to the extent that the INTELLIGENT QUARTZ watches contain computer chips, those chips unequivocally exert no control whatsoever over the quartz in the watch." (Doc. 26)
2) Third-party registrations in which INTELLIGENT is part of a composite mark and describes another word within the mark. (Doc. 24, Ex. 1)
3) Timex ads showing how the mark is used. (Doc. 24, Ex. 2)
4) Registrations for the mark SMARTWATCH. (Doc. 24, Ex. 3)
5) Articles from technology publications, none of which use the term INTELLIGENT QUARTZ or the word INTELLIGENT. (Doc. 24, Ex. 4)
6) Registration for the mark INTELLI-TIME. (Doc. 24, Ex. 5)
7) Dictionary definitions of INTELLIGENT that do not mention a computer or microprocessor. (Doc. 24, Ex. 6)
8) Dictionary definitions of QUARTZ. (Doc. 24, Ex. 7)

New Evidence Submitted by Defendant:

1) Selected advertising and manuals for Timex INTELLIGENT QUARTZ watches. (Doc. 28, Ex. 1)
2) Merriam-Webster Collegiate Dictionary definition of INTELLIGENT. (Doc. 28, Ex. A)
3) Good Word Guide definition of "smart." (Doc. 28, Ex. B)
4) Twenty-one representative examples of websites showing use of the term INTELLIGENT in connection with watches. (Doc. 28, Ex. C)
5) One-hundred representative examples of third-party registrations for marks containing the term INTELLIGENT. (Doc. 28, Ex. D)
6) Oxford English Dictionary definition of INTELLIGENT. (Doc. 28, Ex. E)
7) Sixteen representative examples of articles referencing "intelligent watches" and "intelligent watch" products. (Doc. 28, Ex. F)
8) CollinsEnglishDictionary definition of"quartz watch." (Doc. 28, Ex. G)
9) Entries for "quartz watch" from online reference websites www.brittanica.com, www.smithsonian.gov, and www.howstuffworks.com. (Doc. 28, Ex. H)
10) Twenty representative examples of articles regarding "quartz watches" and "quartz watch" products. (Doc. 28, Ex. I)
11) Encyclopedia Britannica entry for "computer chip." (Doc. 28, Ex. J)
12) Encyclopedia Britannica entry for "microprocessor." (Doc. 28, Ex. K)
13) Page from Timex website discussing INTELLIGENT QUARTZ technology. (Doc. 28, Ex. L)
14) U.S. Patent Application No. 2010/0220559, which lists Louis M. Galie as an inventor. (Doc. 28, Ex. M)

A de novo review of this new evidence, and of the record as a whole, points persuasively to the conclusion that the mark INTELLIGENT QUARTZ is suggestive and therefore protectable. To begin with, the new record before the district court establishes, through a declaration from Timex Senior Vice President of Technology, that "[i]t is blatantly inaccurate that any watch sold by Timex under the INTELLIGENT QUARTZ mark contains a quartz component controlled by a computer chip."[20] Defendant properly does not contest this statement. It follows that the evidence warrants a finding that the quartz components in Timex INTELLIGENT QUARTZ watches are not controlled by computer chips. Given this important finding of fact, the mark INTELLIGENT QUARTZ must now be examined under the two tests for descriptiveness vs. suggestiveness: the imagination test and the competitors' need test.

A. The Imagination Test

The mark must first be analyzed pursuant to the imagination test, under which a mark is deemed suggestive if "it stands for an idea which requires some operation of the imagination to connect it with the goods." Pizzeria Uno Corp. v. Temple, 747 F.2d 1522, 1528 (4th Cir. 1984). Consumers must employ a degree of imagination and mental reasoning to deduce that INTELLIGENT QUARTZ, "considered in relation to the particular goods for which registration issought, "[21] pertains toanalog watches with quartz timepieces that also include a feature such as an altimeter, a compass, a depth gauge, a chronograph, or a calendar. As is demonstrated below, in the context of the watch industry, INTELLIGENT QUARTZ does not, as would be required for a finding of descriptiveness, "conveyf] an immediate idea of the ingredients, qualities or characteristics of the goods." StixProducts, Inc. v. United Merchants & Mfrs., Inc., 295 F.Supp. 479, 488 (S.D.N.Y. 1968).

This conclusion finds firm support in the new evidence submitted to the district court. The array of dictionary definitions submitted by the parties will be considered first. Plaintiff has disclaimed QUARTZ as descriptive, and the record establishes that QUARTZ is "a hard glossy mineral consisting of silicon dioxide in crystal form, "[22] but that in the context of watches, consumers understand a QUARTZ watch to be "a watch that is operated by the vibrations of a quartz crystal controlled by a microcircuit."[23] The analysis therefore turns on the meaning of INTELLIGENT within the composite mark INTELLIGENT QUARTZ. The various dictionary definitions of INTELLIGENT proffered by the parties can be categorized into two broad groups.[24] The primary definition of INTELLIGENT relates to persons or animals who "hav[e] a high degree or good measure of understanding, "[25] or "[s]how[] sound judgment and rationality."[26] A secondary definition relates to the field of computers and technology and describes an electronic device that is "guided or controlled by a computer, "[27] "able to process data independently, "[28] or "able to modify action in the light of ongoing events."[29] Because INTELLIGENT has two possible definitions, it must be determined (i) whether consumers of watches will immediately understand INTELLIGENT, in the context of the mark, to convey that the product contains a feature such as a chronograph, altimeter, or compass, or (ii) whether such consumers will need to engage their imagination to deduce those particular attributes of the Timex INTELLIGENT QUARTZ products. This determination is made by examining how INTELLIGENT is used in the relevant context, through sources such as advertisements and publications.

Analysis next proceeds to the advertisements and publications entered into the record, which demonstrate how INTELLIGENT and INTELLIGENT QUARTZ are used in the context of watches and electronic devices. Plaintiff submitted advertisements and articles from technology publications that discuss internet-capable watches, which to the devices as "smart watches, "[30] "e-watches, "[31] and "high-tech watches, "[32] but not as "intelligent watches." Defendant, in turn, has submitted 21 examples of websites that use the word INTELLIGENT to refer to watches and other electronic devices with advanced technological capabilities, [33] and 16 articles from technology publications that refer to "intelligent watches."[34] These advertisements and publications demonstrate that watches with technological capabilities are sometimes referred to as "smart watches" and sometimes referred to as "intelligent watches." Yet, defendant has failed to providea single instance in which a watch with such features is referred to descriptively as an INTELLIGENT QUARTZ watch. Indeed, the only evidence of use of INTELLIGENT QUARTZ to refer to anything other than Timex's product line is in reference Seiko's prior INTELLIGENT QUARTZ products, for which Seiko previously held trademark registration.[35] Therefore, "intelligent watch" may be considered descriptive, but that mark is not at issue in this case. Rather, the mark INTELLIGENT QUARTZ is at issue here, in which INTELLIGENT modifies a type of mineral commonly used in timekeeping devices. In this context, INTELLIGENT QUARTZ does not convey an immediate idea of the characteristics of the relevant product, as the imagination test requires for a descriptiveness finding. See Stix Products, 295 F.Supp. At 488. This is so because INTELLIGENT does not describe QUARTZ; even in the context of a timekeeping device, QUARTZ is not independently capable of data storage or processing. Rather, consumers must exercise imagination or mature reasoning[36] to ascertain that INTELLIGENT QUARTZ relates to a watch in which a quartz crystal provides the time-base for the watch, and an embedded microprocessor operates an additional feature such as a chronograph or compass. Indeed, Timex INTELLIGENT QUARTZ watches would arguably not even fall under the secondary definition of INTELLIGENT because they are not internet-capable and contain only limited features such as calendars and altimeters.

The numerous third-party registrations that the parties submitted do not alter this conclusion. Plaintiff submitted 533 pages of third-party registrations in which INTELLIGENT is part of a composite mark and modifies another word within the mark.[37] Among this exceedingly large number of third-party registrations that plaintiff submits are the marks: INTELLIGENT BIOCIDES, INTELLIGENT SPORT, INTELLIGENT RENTING, INTELLIGENT DATING, and THE INTELLIGENT KITCHEN. Plaintiff also submitted a third-party registration for the mark INTELLI-TIME, which is held by a manufacturer of a self-setting alarm clock.[38] These third-party registrations are supportive of the notion that the term INTELLIGENT is not considered descriptive in a variety of instances in which it modifies a noun in a composite mark.

Not to be outdone, defendant submitted 406 pages detailing 100 active third-party INTELLIGENT formative registrations in which the mark is on the Supplemental Register because it has been deemed nondistinctive absent proof of secondary meaning, registered on the Principal Register under § 2(f) with proof of secondary meaning, or the INTELLIGENT formative portion of the mark isdisclaimed asdescriptive.[39] Because the "real evidentiary value of third party registrations per se is to show the sense in which a term [or] word... of a mark is used in ordinary parlance, " the third-party registrations submitted by defendant show, like the dictionary definitions and publications in the record, that INTELLIGENT can, in some contexts, be used descriptively to refer to electronic devices with certain technological capabilities.[40] Yet, in the end, the numerous third-party registrations submitted by the parties are not dispositive of anything beyond the fact that INTELLIGENT formative marks may be descriptive or may be suggestive, depending on context and use. In this case, context renders the mark suggestive.

Finally, even if the mark immediately conveyed to consumers the secondary, computer science and technology definition of INTELLIGENT, the composite mark in its entirety would be considered suggestive because it is incongruous. When two or more words in a composite mark are incongruous in combination with each other, that incongruity is "a strong indicator of suggestiveness." 2 McCarthy § 11.67. For example, the mark ROACH MOTEL was held to be suggestive because motels are not designed as housing for roaches and thus the "very incongruity is what catches one's attention." American Home Products Corp. v. Johnson Chemical Co., Inc., 589 F.2d 103, 106 (2d Cir. 1978). The same holds true here. The word INTELLIGENT typically conveys either that a living being possesses reason and understanding, or that an electronic device has the ability to process and store data. Either of those definitions, applied to a piece of QUARTZ crystal-even one that oscillates inside of a watch-is incongruous. Accordingly, because INTELLIGENT QUARTZ requires consumers to exercise imagination or multistep reasoning to decipher the relevant characteristics of the product, the mark is suggestive.

B. Competitors' Need Test

The same result obtains under the secondary "competitors' need test, " which asks whether "the message conveyed by the mark about the goods or services is so direct and clear that competing sellers would be likely to need to use the term in describing their goods in advertising and promotion." 2 McCarthy § 11:68. Here, the record points persuasively to the conclusion that because INTELLIGENT does not describe QUARTZ, the "descriptive information conveyed by the mark [is] so remote and subtle that it is [un]likely to be needed by competitive sellers to describe their goods or services[.]" Id. As evidenced by the advertisements and technology publications submitted by the parties, the phrases "intelligent watch" or "smart watch" do convey descriptive information that competitors need to describe their products; namely that the product has data processing and storage capacity. Yet, INTELLIGENT does not actually describe how the QUARTZ movement of awatch functions, and competitors therefore do not need this specific phrasing to describe watches with advanced technological capabilities and quartz timepieces. Thus, the competitors* need test, when applied to the mark INTELLIGENT QUARTZ, yields the same result as the imagination test: INTELLIGENT QUARTZ is suggestive rather than descriptive.

VII.

In sum, the TTAB's finding of descriptiveness is not supported by substantial evidence. Moreover, both the administrative record that was before the TTAB and the new evidence submitted here on appeal compel the conclusion that that plaintiff is entitled to summary judgment on the ground that the term INTELLIGENT QUARTZ is suggestive and thus a protectable mark. Accordingly, plaintiffs motion for summary judgment is granted, defendant's motion for summary judgment is denied, and plaintiff is entitled to register the mark INTELLIGENT QUARTZ.

Anappropriate Order will issue.


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