Threshold Enterprises Ltd. v. Pressed Juicery, Inc.

Background

Threshold Enterprises Ltd. sells vitamin and dietary supplements under the “Source Naturals” brand. It owns federal trademark registrations for “wellness shots” and “wellness shot” in connection with dietary supplements and sells a product marked “wellness shot.” The registrations disclaim exclusive rights to use “wellness” and “shot” separately from the complete marks.

Pressed Juicery sells nutritional drinks called “shots,” including probiotic, vitality, and wellness shots. Threshold sued Pressed Juicery over its use of “wellness shot,” asserting federal trademark infringement, common-law trademark infringement, dilution under California Business and Professions Code section 14300, federal unfair competition, and common-law unfair competition under California Business and Professions Code section 17200. Pressed Juicery filed counterclaims seeking a declaration of non-infringement and cancellation of the registrations.

Motion and judicial notice

Pressed Juicery moved for judgment on the pleadings under Federal Rule of Civil Procedure 12(c). The court explained that this motion tests the legal sufficiency of the claims and applies essentially the same standard as a motion to dismiss. The court generally accepts the nonmoving party’s factual allegations as true, but may consider documents attached to the pleadings and facts subject to judicial notice.

Both parties asked the court to take judicial notice of numerous documents, including websites, social-media materials, news and media items, dictionary definitions, trademark registrations, and United States Patent and Trademark Office records. The court judicially noticed the materials, or relevant portions of them, but not the truth of factual assertions within those materials unless specifically appropriate. It also criticized the parties for submitting large amounts of material without identifying the particular facts they wanted the court to consider.

Genericness

A valid and enforceable trademark is required for a trademark-infringement claim. The court evaluates whether a term is generic by asking what category of goods or services is involved and whether consumers primarily understand the term as identifying the product type or the product’s source. Generic terms cannot receive trademark protection.

Threshold’s marks were federally registered and incontestable, which ordinarily created a presumption of validity. Pressed Juicery argued that the marks were generic from the beginning, rather than having later become generic. The court recognized a statutory issue because the provisions governing cancellation of incontestable marks refer to marks that have “become generic.” Nevertheless, the court concluded that it would be inappropriate to preserve protection for a generic term based on that technical distinction. It therefore examined the evidence of the public’s understanding of the terms.

Pressed Juicery submitted dictionary definitions, media usage, social-media posts, competitor usage, and trademark-registration materials. The court found that this evidence overwhelmingly showed that “wellness shot” and “wellness shots” were used to describe a type of small beverage containing ingredients associated with health benefits, rather than a particular brand. The definitions of “wellness” and “shot” supported the conclusion that the combined phrase retained the ordinary meaning of its component words. Media articles, competitor advertisements, and social-media posts likewise used the phrase generically. United States Patent and Trademark Office records also showed that other applicants used “wellness shot(s)” in descriptions of beverage and restaurant goods and services.

The court rejected Threshold’s reliance on alternative phrases such as “juice shots,” “immunity shots,” and “probiotic shots.” The existence of synonyms did not change the public’s understanding of the specific terms at issue. The court also found that Threshold had not submitted evidence, apart from its own product label and packaging, showing that the public understood “wellness shot” as identifying Threshold’s product rather than a type of product.

The court acknowledged that genericness is ordinarily a factual question and that deciding it at the pleading stage was unusual. It nevertheless found that the evidence before it showed no genuine dispute about whether the marks were generic. The court held that Pressed Juicery had rebutted the presumption of validity and that judgment on the pleadings was appropriate.

Fair use

The court separately held that, even if the marks were protectable, Pressed Juicery’s use of “wellness shot” was fair use. Fair use permits use of a mark other than as a brand and in good faith to describe goods or services.

Pressed Juicery placed “wellness shot” beneath its prominent “Pressed Juicery” house mark and above a list of ingredients. The court found that “Pressed Juicery,” not “wellness shot,” communicated the product’s source. The phrase described the nature and type of the drink and distinguished it from Pressed Juicery’s other products, including vitality and probiotic shots. The court also found no evidence of bad faith beyond Threshold’s conclusory allegations of malice and ill will. Pressed Juicery’s continued use after Threshold notified it of the dispute did not establish bad faith because the use was descriptive.

Disposition

The court granted Pressed Juicery’s motion for judgment on the pleadings with prejudice. It also ordered cancellation of the registrations for “wellness shot” and “wellness shots,” directed that a separate judgment issue, and stated that the clerk could close the file.