First Security Capital, L.L.C.

Trademark Trial and Appeal Board

Feb 27, 2001

No. 75518504 (T.T.A.B. Feb. 27, 2001)

2/27/01
Paper No. 13
HWR
UNITED STATES PATENT AND TRADEMARK OFFICE
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Trademark Trial and Appeal Board
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In re First Security Capital, L.L.C.
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Serial No. 75/518,504
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William J. Mason of Rhodes & Mason, PLLC for First Security
Capital, L.L.C.
Robert C. Clark, Jr., Trademark Examining Attorney, Law
Office 108 (David Shallant, Managing Attorney).
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Before Hairston, Chapman and Wendel, Administrative
Trademark Judges.
Opinion by Wendel, Administrative Trademark Judge:
First Security Capital, L.L.C. has filed an
application to register the mark OPTION CONVERSION LOAN for
“financial services, namely, making loans of up to 90% of
the value of the shares in a company that have been
converted from either vested incentive stock options
and/or vested non-qualified stock options by an employee of
that company prior to loan funding.”1
1 Serial No. 75/518,504, filed July 14, 1998, based on an
allegation of a bona fide intention to use the mark in commerce.
THIS DISPOSITION
IS NOT CITABLE AS PRECEDENT
OF THE T.T.A.B.
Ser No. 75/518,504
2
Registration has been finally refused under Section
2(e)(1) of the Trademark Act on the ground that the mark is
merely descriptive, when used, as intended, with
applicant’s services. The refusal has been appealed and
both applicant and the Examining Attorney have filed
briefs. An oral hearing was originally requested but
subsequently waived.
A term or phrase is merely descriptive within the
meaning of Section 2(e)(1) if it immediately conveys
information about a characteristic or feature of the goods
or services with which it is being used, or is intended to
be used. See In re Abcor Development Corp., 588 F.2d 811,
200 USPQ 215 (CCPA 1978). Whether or not a particular term
or phrase is merely descriptive is determined not in the
abstract, but rather in relation to the goods or services
for which registration is sought, the context in which the
designation is being used, or is intended to be used, and
the significance the designation is likely to have to the
average purchaser as he or she encounters the goods or
services bearing the designation, because of the manner in
which it is used. See In re Bright-Crest, Ltd., 204 USPQ
591 (TTAB 1979). It is not necessary that the term or
phrase describe all the characteristics or features of the
goods or services in order to be merely descriptive; it is
Ser No. 75/518,504
3
sufficient if the term or phrase describes one significant
attribute thereof. See In re Pennzoil Products Co., 20
USPQ2d 1753 (TTAB 1991).
Applicant has acknowledged that the term “option,” as
used in the financial field, means the right to purchase
stock at a given price within a given time frame and that
when this option is exercised, the “option” has been
“converted.” (Brief, p. 3). Thus, the phrase “option
conversion” has come into use, as also shown by Nexis
excerpts relied upon by the Examining Attorney.
Applicant’s contention is that this use of “option
conversion” as a term in the financial field does not
render its mark OPTION CONVERSION LOAN merely descriptive
of its particular loan services. Applicant argues that
although the mark may suggest that some sort of loan is
involved and that it has something to do with “option
conversion,” it does not immediately describe the exact
type of loan that applicant is offering. Applicant notes
that while persons often borrow money to exercise stock
options, and thus such a loan might be a logical
interpretation of OPTION CONVERSION LOAN, applicant’s
services are specifically directed to loans secured by
stock which has been converted prior to the loan.
Ser No. 75/518,504
4
The problem with applicant’s arguments is that the
mark OPTION CONVERSION LOAN is not to be considered in the
abstract, but rather in relation to the specific services
identified in the application. Applicant’s services are
identified as making loans on shares “that have been
converted from either vested incentive stock options and/or
vested non-qualified stock options ... prior to the loan
funding.” The issue of descriptiveness is determined by
considering the mark as it is, or is intended to be, used
with these services. Whether purchasers would guess what
the specific services are from consideration of the mark
alone is not the test. See In re American Greetings Corp.,
226 USPQ 365 (TTAB 1985).
When purchasers encounter the mark OPTION CONVERSION
LOAN being used in connection with the services identified
in the application, the mark would immediately be
recognized as describing a significant feature of
applicant’s loans, namely, that the loans are made using as
collateral stock shares obtained by option conversion prior
to obtaining the loans. The fact that OPTION CONVERSION
LOAN might have another recognizable meaning, namely,
providing a loan in order to exercise the stock option is
irrelevant. This meaning is applicable only to a totally
Ser No. 75/518,504
5
different type of loan service from the service identified
as that to be offered by applicant.
Accordingly, we find the mark OPTION CONVERSION LOAN
merely descriptive if used, as intended, by applicant in
connection with financial services involving the making of
loans of up to 90% of the value of the shares in a company
that have been converted from either vested incentive stock
options and/or vested non-qualified stock options by an
employee of that company prior to loan funding.
Decision: The refusal to register under Section
2(e)(1) is affirmed.
Ser No. 75/518,504
6