## Facts

- California Innovations, Inc., a Canadian company, filed an intent-to-use application to register the composite mark “CALIFORNIA INNOVATIONS” and design for multiple goods, including thermal insulated bags, tote bags, and insulated wraps.
- During prosecution, the applicant disclaimed “CALIFORNIA” and amended the identification/classification of goods.
- The USPTO approved the mark for publication; it was published for opposition and no opposition was filed.
- The USPTO later reasserted jurisdiction and refused registration under Lanham Act § 2(e)(3), asserting the mark was primarily geographically deceptively misdescriptive.
- The Trademark Trial and Appeal Board affirmed the refusal.
- On appeal to the Federal Circuit, the applicant limited the challenge to the Class 21 goods (thermal insulated bags/totes/wraps), arguing the Board applied the wrong legal standard after statutory amendments.

## Issues

1. What legal standard governs refusals as “primarily geographically deceptively misdescriptive” under Lanham Act § 2(e)(3) following the NAFTA-related amendments.
2. Whether the USPTO must prove that any geographic misdescription is material to consumers’ purchasing decisions to sustain a § 2(e)(3) refusal.
3. Whether the Board’s analysis of “CALIFORNIA INNOVATIONS” for insulated bags and wraps satisfied the correct post-amendment test.

## Decision

- The Federal Circuit held that the Board applied an outdated § 2(e)(3) standard that omitted a materiality requirement.
- The court articulated a three-part test for § 2(e)(3): (1) the mark’s primary significance is a generally known geographic location; (2) consumers are likely to believe the place indicates the goods’ origin, when the goods do not come from that place; and (3) the misrepresentation is a material factor in the decision to purchase.
- The court vacated the Board’s refusal and remanded for application of the correct test, including materiality, to the record as to the Class 21 goods.

## Legal Principles

- After the NAFTA-related amendments, a § 2(e)(3) refusal requires proof of deceptiveness, including that the geographic misdescription is material to purchasing decisions.
- The § 2(e)(3) inquiry focuses on the mark as a whole and requires evidence that consumers will make a goods–place association that is false.
- Generalized assumptions about a place’s reputation are insufficient without evidentiary support connecting the alleged misdescription to consumer origin beliefs and purchase motivation for the relevant goods.
- A disclaimer of a geographic term does not resolve registrability under § 2(e)(3) because the refusal concerns the composite mark’s registrability, not exclusive rights in a disclaimed component.

## Conclusion

The Federal Circuit required the USPTO to prove not only that a mark misdescribes geographic origin, but also that the misdescription is material to consumer purchasing decisions; because the Board did not apply this materiality-based standard, its § 2(e)(3) refusal was vacated and remanded.


In re California Innovations, Inc., 329 F.3d 1334 (Fed. Cir. 2003)