Whole Foods Still Has Options After Trademark Rejection

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By Anandashankar Mazumdar

Aug. 8—If Whole Foods Market Inc. really wants to be officially known as the “World's Healthiest Grocery Store,” it's best bet may be to start calling itself that.

The Austin, Texas-based natural and organic grocery retailer—which has registered dozens of trademarks in the European Union, Mexico and Brazil in recent years—suffered an embarrassing setback last month when the Patent and Trademark Office rejected its bid to register “World's Healthiest Grocery Store” as a trademark.

But the chain could still acquire U.S. trademark rights in the phrase, according to trademark lawyers who spoke with Bloomberg BNA. The key? It must start using the phrase like a trademark so the term and the chain become linked in the minds of consumers.

“It's difficult to get a trademark registration on ‘the world's greatest this or the greatest that',” Peter J. Toren, a trademark lawyer with Weisbrod Matteis & Copley PLLC, Washington, said. But the task, though not easy, isn't impossible, either.

Indications That Grocery Plans Global Expansion

The vast majority of Whole Foods' 453 stores are in the U.S., with about a dozen each in Canada and the U.K. The chain has 87,000 employees and reported $15.4 billion in revenues in 2015, according to Bloomberg Law data.

Whole Foods already has a trademark registration for “America's Healthiest Grocery Store,” and the company's move to acquire trademarks in new territories suggests it wants to take on a more international identity. Whole Foods declined to comment for this story.

The PTO, however, refused to approve the latest trademark application because the phrase “World's Healthiest Grocery Store” was “merely descriptive,” according to its July 16 office action. Not only that, it found the phrase was a particular type of descriptive phrase referred to as “merely self-laudatory” or “puffery.”

A phrase that is considered descriptive of the types of goods or services that an applicant is selling cannot be distinctive. And being distinctive is a requirement for a trademark, whose purpose is to identify goods' and services' sources.

Use Is Key to Acquiring Distinctiveness

The catch is that a descriptive, laudatory phrase can become distinctive if it's used in commerce.

Generic terms or phrases can never become distinctive. But descriptive ones can acquire distinctiveness if a company can provide evidence that the term has taken on “secondary meaning”— that is, a connection in consumers' minds in addition to its literal meaning. In this case, Whole Foods would have to demonstrate that consumers think of them when they see or hear the phrase, “World's Healthiest Grocery Store.”

Registering a trademark is challenging for a party claiming to be the world's best in one way or another, as Toren pointed out. But some companies do hold such trademarks, notably Ringling Bros. Barnum & Bailey Circus, which has several registrations covering “The Greatest Show on Earth.

Supplemental Register Is Available Route

What probably tripped up Whole Foods recently is that it filed an “intent-to-use” application under Section 1(b) of the Lanham Trademark Act of 1946, according to trademark lawyer Kenneth B. Germain of Wood Herron & Evans LLP, Cincinnati. Such an application is a sort of a placeholder for a potential trademark that isn't in use yet—but the key to trademark rights is use in commerce.

An intent-to-use application “just makes a public announcement of direction,” Germain said. It can serve to signal competitors to stay away from the trademark the applicant is hoping to get, but it doesn't come with full trademark rights.

“It's pretty much an admission that it doesn't have secondary meaning,” according to Germain.

Going forward, Whole Foods could file the phrase with the PTO's Supplemental Register and then start using it—and even the circle-R registration symbol, according to trademark lawyer Jennifer M. Mikulina of McDermott Will & Emery LLP, Chicago.

After five years on the Supplemental Register, the chain could file a statement with the PTO, saying that the term has acquired secondary meaning, to have it moved to the Principal Register, which would provide full rights associated with federal trademark registration.

Not Uncommon Option

Others have also taken the Supplemental Registry route to — hopefully — achieve full federal trademark rights.

Dixon Ticonderoga Co. had its “The World's Best Erasable Pen” application rejected by the PTO as merely descriptive in February 2015, so the company changed its application and got listed on the Supplemental Register, said Mikulina. She said she would expect that “Whole Foods will do the same thing once they actually start using the mark.”

In the meantime, there's a risk that a competitor could try to establish trademark rights, but they would be going up against an industry giant that could, presumably, devote more resources to developing and advertising the phrase, boosting its chance of success, Mikulina said.

“Do you really want to take on the monster?” she asked.

To contact the reporter on this story: Anandashankar Mazumdar in Washington at amazumdar@bna.com

To contact the editor responsible for this story: Mike Wilczek at mwilczek@bna.com

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