Preferred Capital Corp.

Trademark Trial and Appeal Board

Feb 27, 2001

No. 75385899 (T.T.A.B. Feb. 27, 2001)

2/27/01
Paper No.9
RFC
UNITED STATES PATENT AND TRADEMARK OFFICE
________
Trademark Trial and Appeal Board
________
In re Preferred Capital Corporation
________
Serial No. 75/385,899
_______
William J. Brucker of Stetina Brunda Garred & Brucker for
Preferred Capital Corporation.
Janel M. Pernell, Trademark Examining Attorney, Law Office
109 (Ronald R. Sussman, Managing Attorney).
_______
Before Cissel, Hohein and Wendel, Administrative Trademark
Judges.
Opinion by Cissel, Administrative Trademark Judge:
On November 6, 1997, applicant filed the above-
referenced application seeking registration of the mark
shown below
on the Principal Register for “financial services
specializing in the purchase and leasing of business
THIS DISPOSITION
IS NOT CITABLE AS PRECEDENT
OF THE T.T.A.B.
Ser No. 75/385,899
2
equipment,” in Class 35. The application was based on
applicant’s claim that it had used the mark in interstate
commerce since as early as April of 1996.
The Examining Attorney refused registration under
Section 2(e)(1) of the Lanham Act on the ground that
applicant’s mark is merely descriptive of the services
identified in the application. Her reasoning was that
applicant pre-qualifies its customers, thereby providing a
“preferred leasing” program, and that the “equipment card”
portion of the mark is descriptive of the services because
applicant provides a card that is used in leasing the
equipment.
Attached to the refusal to register were copies of
excerpts from articles retrieved from the Nexis
database
of published articles wherein the term “preferred lease” is
used. The excerpts were taken from a variety of
publications from 1981 to 1998. Examples include the
following:
… offering extended lease terms and providing
preferred lease rates for the very highest credit
quality lessors, for example.
“Preferred lease program” will pre-approve the
existing lease customers for new leases.
For example, under a “preferred lease program,”
Crow are granted first bidding rights on tribal
property made available for leasing.
Ser No. 75/385,899
3
We’re going to have space in the new building at
a preferred lease rate…
… announced today that it has obtained a
preferred lease credit line through Ladco Financial
Group for its 1 One Medical Service program…
and
under the “Porsche Preferred Lease” program,
customers can lease used 1981-94 cars for up to five
years.
The Examining Attorney required applicant to indicate
whether it offers its customers pre-approved cards or
credit, and whether it offers its customers preferential
rates or sets different interest rates for customers based
on credit ratings. She also required amendment to make the
recitation of services in the application more definite.
She suggested the following language: “lease-purchase
financing of office equipment.”
Applicant responded to the first Office Action by
amending the recitation of services. As amended, the
services were identified as “financial services
specializing in the lease-purchase financing of office
equipment,” in Class 36. Applicant also provided arguments
on the issue of descriptiveness and enclosed one of its
advertising brochures. The arguments and the brochure make
it clear that the card referred to in the mark is issued to
provide applicant’s customers with their account numbers
Ser No. 75/385,899
4
and their pre-approved lease status. The card does not
allow the customer to purchase equipment. Applicant does
not extend credit to its customers. Instead, it pre-
approves the amount of money which applicant is willing to
spend to purchase the equipment that the customer requests,
and then, as long as the equipment price is within that
amount, applicant buys the equipment and leases it back to
the customer. Like most lessors, applicant offers its
customers the option to purchase the leased equipment at
the end of the lease period. Applicant argued that the
mark sought to be registered is not merely descriptive of
its financial services specializing in the lease-purchase
financing of office equipment in light of this explanation.
The Examining Attorney was not persuaded by
applicant’s arguments, and in the second Office Action, she
made final the refusal to register under Section 2(e)(1) of
the Act. Attached in support of the refusal were excerpts
the Examining Attorney had taken from the Internet in an
effort to show use of the phrase “PREFERRED LEASE” in
relation to leasing services. One refers to the “preferred
lease term.” Another refers to the “Porsche Preferred
Lease” in reference to a lease program offered by that
automaker.
Ser No. 75/385,899
5
Also submitted with the final refusal to register were
copies of third-party trademark registrations on the
Supplemental Register. In one, the mark is “POSTAL PAYMENT
CARD,” and the services are identified as “financial
services, namely, debit and credit card services for the
purchase of stamps and other postal services.” The term
“PAYMENT CARD” is disclaimed apart to the mark a shown.
The other third-party registered marks, all also on the
Supplemental Register, are “The Cruise Card,” with a
disclaimer of “CARD,” for credit services for the purchase
of cruise and travel tickets; “THE MORTGAGE CARD,” for
residential pre-approved mortgage loan services; “THE LOAN
CARD,” for loan financing services; and “THE DENTIST’S
CARD,” for “financial services-namely, providing dental
professionals with a pre-approved line of credit.”
The Examining Attorney also made final the requirement
for an acceptable recitation of services and the
requirement for applicant to indicate if it sets different
interest rates for customers based on credit ratings.
Applicant timely filed a Notice of Appeal. Both
applicant and the Examining Attorney filed briefs, but
applicant did not request an oral hearing before the Board.
In its appeal brief, applicant agreed to modify the
recitation of services to adopt the language suggested by
Ser No. 75/385,899
6
the Examining Attorney in the second Office Action,
specifically, “lease-purchase financing of office
equipment.” Thus, the issues on appeal are the requirement
under Trademark Rule 2.61(b) for applicant to provide the
requested information as to whether applicant sets
different interest rates for customers based on credit
ratings and the refusal to register the mark because it is
merely descriptive of applicant’s services within the
meaning of Section 2(e)(1) of the Lanham Act. Based on
careful consideration of the record before us in this
appeal, we find that both the refusal to register and the
requirement for applicant to submit the requested
information are well taken.
Trademark Rule 2.61(b) provides that “the examiner may
require the applicant to furnish such information and
exhibits as may be reasonably necessary to the proper
examination of the application.” In the first Office
Action, the Examining Attorney made the initial request for
applicant to state whether it offers its customers
preferential rates or sets different interest rates for
customers based on credit ratings. This requirement was
made final in the second Office Action. Applicant failed
to address this question in either its response to the
first Office Action or its response to the second Office
Ser No. 75/385,899
7
Action. Even after the Examining Attorney made it clear in
her appeal brief that applicant still had not responded to
this requirement, applicant yet again failed to respond by
means of a reply brief.
The Examining Attorney argues that she needed this
information because part of the determination of the
registrability of the mark hinges on the answer to this
question. She sought to determine whether some customers
were preferred or received preferred lease rates.
As the Examining Attorney points out, refusal to
register is warranted in a case such as this, where
applicant has failed to comply with a legitimate
requirement for information under Rule 2.61(b). In re
Babies Beat Inc., 13 USPQ2d 1729 (TTAB 1990). Inasmuch as
we find the Examining Attorney’s position to be well taken,
the requirement is affirmed and registration to applicant
is refused on this basis.
We next turn to the refusal on the ground that the
mark is merely descriptive of the services within the
meaning of Section 2(e)(1) of the Lanham Act. It is well
settled that a mark is merely descriptive under the Act if
it describes a significant ingredient, quality,
characteristic, function, feature, purpose or use of the
relevant services. In re Gyulay, 820 F.2d 1216, 3 USPQ2d
Ser No. 75/385,899
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1009 (Fed. Cir. 1987); In re Bed & Breakfast Registry, 791
F.2d 157, 229 USPQ 818 (Fed. Cir. 1986). The determination
of descriptiveness must be made not in the abstract, but
rather in relation to the services as they are identified
in the application, considering the context in which the
mark is used in connection with those services and the
possible significance the mark would have in that context
to the average purchaser of such services. In re Abcor
Development Corp., 588 F.2d 811, 200 USPQ 215 (CCPA 1978).
In the case at hand, applicant argues that the Board
should consider its mark to be the single term “PREFERRED
LEASE EQUIPMENT CARD.” In view of the way the mark is used
on the specimens record and presented in the drawing
submitted with the application, however, it would appear to
be much more reasonable to consider the descriptiveness
issue as a question of the significance of “PREFERRED
LEASE” and “EQUIPMENT CARD” as they are used together, but
as separate terms. The first two words appear on one line,
but “EQUIPMENT CARD” is shown in much smaller letters in a
single, different typeface in a separate box design below
the first term, “PREFERRED LEASE.” The mark as a whole is
a combination of two descriptive phrases, each with readily
understood meanings in connection with lease-purchase
financing of office equipment, and when they are combined
Ser No. 75/385,899
9
into the four-word term, “PREFERRED LEASE EQUIPMENT CARD,”
that term is equally desdriptive of applicant’s services.
The first term, “PREFERRED LEASE,” has a descriptive
connotation as a lease with preferred rates or one made
available only to preferred customers. It also possesses a
descriptive meaning as a general laudatory expression in
connection with applicant’s services.
The Examining Attorney submitted a dictionary
definition, of which the Board can take judicial notice,
with her appeal brief. The word “preferred” is defined
therein as “to choose or be in the habit of choosing as
more desirable or as having more value” and “to give
priority or precedence to (a creditor).”1 Applicant’s
advertising materials make it clear that the latter
definition is applicable to the circumstances at hand.
Applicant gives precedence to creditors by way of pre—
qualifying them. It “pre-approves customers for equipment
leases based upon Dunn & Bradstreet ratings.” The
advertising materials of record make it clear that
applicant gives “preferred leases,” that is to say,
priority and precedence to those customers with desirable
credit ratings. In this context, when the word “PREFERRED”
1 The American Heritage
Dictionary of the English Language,
third edition, Houghton Mifflin Co., (1992).
Ser No. 75/385,899
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is combined with the word “LEASE,” the term merely
describes a feature of applicant’s services, i.e., that it
offers a lease which is to be preferred because of special
pre-qualifying conditions which are provided to preferred
customers.
As the Examining Attorney further points out, the term
“PREFERRED LEASE” can also have a laudatory descriptive
meaning, which additionally makes it unregistrable under
Section 2(e)(1) of the Act. Terms which attribute high
quality or excellence to services are laudatory terms which
are unregistrable without proof of acquired
distinctiveness. Exquisite Form Industries, Inc. v.
Exquisite Fabrics of London, 378 F.Supp. 403, 183 USPQ 666
(S.D.N.Y. 1974); and In re Wileswood, Inc., 2001 USPQ 400
(TTAB 1978).
In particular, in the case of In re Inter-State Oil
Co., 219 USPQ 1229, 1230 (TTAB 1983), the Board stated that
“… the clear meaning of ‘PREFERRED’ in relation to any
product is that the product is liked better than other
products of the same kind. Thus, in our opinion, the term
is a common self-laudatory expression in relation to
applicant’s product and would be so understood by
purchasers and prospective purchasers.” Similarly, a
“PREFERRED LEASE” is understood to be a more desirable,
Ser No. 75/385,899
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better lease, and as such, the term is merely descriptive
within the meaning of Section 2(e)(1) of Lanham Act in the
laudatory sense.
The second distinct term in applicant’s mark,
“EQUIPMENT CARD,” is also merely descriptive of a feature
of applicant’s services. The third-party registered marks
made of record by the Examining Attorney show, by the fact
that these marks were registered on the Supplemental
Register, that marks combining descriptive terminology with
the word “CARD” are regarded as being merely descriptive in
connection with the services recited in the registrations.
In the same sense that “LOAN CARD” is merely descriptive of
the loan financing services identified in that
registration and “THE MORTGAGE CARD” merely describes pre-
approved mortgage loan services, “EQUIPMENT CARD” is merely
descriptive of applicant’s services because it immediately
informs prospective purchasers that a feature of
applicant’s lease-purchase financing of office equipment is
the card applicant provides in connection with the
services.
Thus, both connotations of “PREFERRED LEASE” render
the term merely descriptive in connection with the services
set forth in the application, and the other term in
applicant’s mark, “EQUIPMENT CARD,” is also merely
Ser No. 75/385,899
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descriptive of the services. When combined, none of the
separately recognized merely descriptive meanings is lost.
No double entendre, unexpected meaning or unusual
commercial impression results from this combination of
words.
Applicant’s arguments are not persuasive of a
different conclusion. Applicant makes the argument that
the word “merely” in Section 2 of the Act means that if the
mark does not tell the potential purchaser only what a
particular feature or characteristic of the services is,
the mark cannot be held to be merely descriptive. It is
well settled that the fact that a term may have other
meanings in addition to the one which is descriptive in
connection with the services in question does not render
the refusal to register under Section 2(e)(1)
inappropriate. In re Bright-Crest, Ltd., 204 USPQ 591
(TTAB 1979). The other meanings for these words are not
applicable to the services at issue here.
Applicant’s argument that its mark is only suggestive
in connection with the services specified in the
application is not well taken either. No imagination or
multi-step reasoning is required for a customer of
applicant’s services to understand that applicant’s mark
immediately and forthwith conveys information with respect
Ser No. 75/385,899
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to the services applicant renders under the mark, i.e.,
that applicant offers a preferred lease (whether in the
sense of a lease which is more desirable or one offering
preferred rates to preferred customers does not make any
difference in this regard) in order to obtain equipment,
and that a card is provided in connection with this
service. As such, applicant’s mark is merely descriptive
of the services, and hence unregistrable under Section
2(e)(1).
Decision: Both the requirement and the refusal to
register are affirmed.
Ser No. 75/385,899
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