Preferred Capital Corp.

Trademark Trial and Appeal Board

Mar 29, 2001

No. 75391347 (T.T.A.B. Mar. 29, 2001)

03/29/01
Paper No. 9
RFC
UNITED STATES PATENT AND TRADEMARK OFFICE
________
Trademark Trial and Appeal Board
________
In re Preferred Capital Corporation
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Serial No. 75/391,347
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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, Rogers and Drost, 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. 75/391347
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 “is offering CAPITAL to its customers on a
PREFERRED basis…” and that the addition of the descriptive
term "CORPORATION" to the descriptive term "PREFERRED
CAPITAL" does not result in anything other than a mark
which is, as a whole, merely descriptive of the specified
services within the meaning of Section 2(e)(1).
Attached to the refusal to register were copies of
several third-party registrations of marks for various
credit or leasing services, one of which involves financing
for the purchase or lease of equipment used in business.
In each of these third-party registrations, the word
"preferred" is disclaimed. The Examining Attorney argued
that these registrations are probative of the
descriptiveness of the word “preferred” in connection with
applicant’s leasing services.
In addition to refusing registration based on Section
2(e)(1), the Examining Attorney required applicant to
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3
indicate if it provides a list of preferred customers, if
it offers customers pre-approved cards or credit, and if it
offers any of its customers preferential rates or sets
different interest rates for customers based on credit
ratings. Applicant was also required to submit samples of
advertisements or promotional materials. Each of these
requirements was made by the Examining Attorney under
Trademark Rule 2.61(b).
She also required applicant to amend the recitation of
services in the application to make it more definite. She
suggested the following language: "lease-purchase financing
of office equipment," in Class 36.
Applicant responded by amending the recitation of
services and classification. As amended, the services were
identified as "financial services specializing in the lease
purchase financing of office equipment," in Class 36.
Applicant also made arguments on the issue of
descriptiveness and enclosed copies of pages from one of
its advertising brochures. Applicant argued that the
brochure makes it clear that applicant does not extend
credit or provide any capital to its customers. Instead,
applicant preapproves the amount of money which applicant
is willing to spend to purchase the capital equipment that
the customer requests, and then, as long as the price of
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4
the requested equipment is within that amount, applicant
buys the equipment and leases it back to the customer.
Like many lessors, applicant offers its customers the
option of purchasing the leased equipment at the end of the
lease period.
Applicant argued that the mark sought to be registered
is not merely descriptive of applicant’s financial services
specializing in the lease-purchase financing of office
equipment. Further, applicant stated that it does not
provide a list of preferred customers and does not offer
preferential rates to its customers. Applicant argued that
the mark could connote a number of things to applicant’s
customers, such as the issuance of credit cards, the
financing of residential and business loans and,
significantly, "the providing of capital to businesses."
(Applicant’s March 15, 1999 response).
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).
She reasoned that “PREFERRED” is merely descriptive because
of its laudatory connotation in connection with applicant’s
services; that "CAPITAL" is descriptive of the services
because applicant is providing capital to make equipment
acquisitions; that "CORPORATION" is descriptive of
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applicant's legal entity; and that the combination of these
three descriptive words results in a phrase that is also
merely descriptive of applicant’s services.
The Examining Attorney also repeated and made final
the requirement for applicant to indicate if it sets
different interest rates for customers based on credit
ratings, and made final the requirement for an acceptable,
definite recitation of services. She held the proffered
amended recitation of services to be unacceptable because
of the inclusion of the indefinite word "specializing."
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 brief, applicant agreed to modify the
recitation of services and classification to adopt the
language suggested by the Examining Attorney in the second
action, specifically, "the lease-purchase financing of
office equipment," in Class 36.
Thus, the issues before us on appeal are the propriety
of 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
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register the mark because it is merely descriptive of
applicant’s services within the meaning of Section 2(e)(1).
Based on careful consideration of the record before us
in this appeal, we find that both the requirement for
applicant to submit the requested information and the
refusal to register 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 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 in its response to the second
Office 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
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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 Trademark 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 to register on the ground
that the mark is merely descriptive of the services within
the meaning of Section 2(e)(1). It is well settled that a
mark is merely descriptive under this section if it
describes a significant quality, characteristic, function,
feature, purpose or use of the relevant services. In re
Gyulay, 870 F.2d 1216, 3 USPQ2d 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 the services and the possible significance
the mark would have in that context to the average
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purchaser of such services. In re Abcor Development
Corporation, 588 F.2d 811, 200 USPQ 215 (CCPA 1978).
We take judicial notice of the dictionary definitions
submitted by the Examining Attorney with her appeal brief.
The word “prefer” is defined 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).” The word “capital” is defined as “wealth in
the form of money or property, used or accumulated in a
business by a person, partnership, or corporation.”
We agree with the Examining Attorney that, as used in
the mark applicant seeks to register, the term “preferred”
is laudatory because it attributes desirability and value
to applicant’s services. As applicant states in its
advertisement, “[s]ince we carefully pre-qualify our
customers, our default rates are low. This allows us to
provide the lowest leasing rates in the industry (that’s
why we’re called Preferred Capital).” A laudatory term
like “preferred” is not distinctive and is therefore
unregistrable without proof of acquired distinctiveness.
In re Inter-State Oil Co., 219 USPQ 1229 (TTAB 1983).
The term “preferred” can also be considered merely
descriptive of applicant’s services because of its
connotation with respect to offering services to carefully
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selected customers who are preferred credit risks.
According to its brochure, applicant “pre-approves
customers for equipment leases based on Dun & Bradstreet
ratings.”
The advertising materials of record make it clear that
applicant’s services should be preferred because applicant
provides preferred, i.e., lower cost, capital to preferred
customers, i.e., those with desirable credit ratings. In
this context, when the word “PREFERRED” is combined with
the word “CAPITAL,” the resulting term merely describes a
feature of applicant’s services, i.e., that applicant
offers capital at preferred rates because of special pre-
qualifying conditions, or because applicant offers
preferred rates to preferred customers.
The word “CORPORATION” is merely descriptive because
it only indicates the form of applicant’s business
organization, and, as such is not an indication of the
source of applicant’s services. In re Martin’s Famous
Pastry Shoppe, Inc., 221 USPQ 364 (TTAB 1984). When
“CORPORATION” is combined with the descriptive terminology
“PREFERRED CAPITAL,” the result is a mark which, when
considered as a whole, is merely descriptive under Section
2(e)(1).
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Applicant argues that the mark as a whole is not
“merely” descriptive under Section 2(e)(1) because it does
not tell potential purchasers only what a particular
feature or characteristic of applicant’s services is.
Applicant argues that prospective customers might consider
the mark as suggestive of credit card services, or
residential and business lending, or banking services.
It is well settled, however, that the meanings a term may
have are not considered in the abstract, but rather in
conjunction with the services in question. In re Bright-
Crest, Ltd., 204 USPQ 591 (TTAB 1979). That the word
“capital” has other meanings in other contexts is therefore
not relevant to our determination of registrability.
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
to the services rendered by applicant under the mark, i.e.,
that applicant is a corporation offering desirable services
in the field of providing capital, in the form of financing
and equipment, to preferred customers or at preferred
rates. As such, applicant’s mark is merely descriptive of
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its services, and hence unregistrable under Section
2(e)(1).
Decision: The refusal to register is affirmed, as is
the requirement under Trademark Rule 2.61(b).
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