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Fourth Circuit: OBX geographically descriptive with no secondary meaning; noninfringement affirmed
March 30, 2009
In a decision last month, the Fourth Circuit affirmed a district court's grant of summary judgment to the defendant in a trademark case. The mark at issue was OBX, which was an acronym coined to be short for the Outer Banks area of North Carolina. The plaintiff coined the acronym and sold various products bearing the acronym. Over time, the public began using the acronym as shorthand for the geographic region in North Carolina. The district court, examining the extensive evidence in the record that the public associated OBX with the region rather than with a particular provider of goods or services, granted summary judgment of noninfringement to the defendant, who sold goods bearing the mark "OB Xtreme." The Fourth Circuit affirmed, noting that while the plaintiff did spend a substantial amount of money on advertising, there was simply no evidence in the record that consumers associated OBX with anything other than the region. This was the plaintiff's owner's intent: he "intended solely that OBX become associated with and descriptive of a geographical location, the Outer Banks," and affixed the OBX letters "not to label an OBX brand product produced by [the plaintiff], but to indicate an association with the Outer Banks." Accordingly, there was no evidence of secondary meaning, and the trademark claims failed as a matter of law.More detail of OBX-Stock, Inc. v. Bicast, Inc. after the jump.In 1994, James Douglas coined the abbreviation OBX as a designation for the Outer Banks , which is a region of approximately 200 miles of islands off the coast of North Carolina encompassing several counties and numerous towns. The Outer Banks is a major tourist attraction. Douglas formed a corporation, OBX-Stock, and began putting the OBX acronym on oval stickers to put on automobiles, much like similar stickers are used to designate country of origin, most frequently in Europe. OBX-Stock eventually expanded use of the acronym to a wide range of items sold from the Outer Banks, and spent $173,000 on advertising from 1997-2004, with annual revenue increasing to over $1,000,000. OBX-Stock sought to register the OBX acronym as a trademark, beginning in 1998. The Trademark Examiner rejected the application five times, stating, "at one time OBX may have been an obscure reference to the Outer Banks of North Carolina, however, those days are no more." The Examiner cited extensive evidence where OBX and Outer Banks are used interchangeably. After repeated, unsuccessful efforts, OBX-Stock received assistance from their congressional delegation of North Carolina, and only then did the USPTO grant four registrations for OBX on the principal register for various products and services.Bicast began selling stickers with OB Xtreme to denote a wide variety of extreme sports available at the Outer Banks. OBX-Stock sued for trademark infringement; Bicast defended on the basis that OBX was either descriptive or generic for the Outer Banks region, and secondary meaning was lacking.The district court granted summary judgment in favor of Bicast, concluding that OBX had become either generic or geographically descriptive without secondary meaning, such that the mark was invalid and could not be infringed. The evidence included Douglas's testimony that he invented OBX as an abbreviation for the Outer Banks of North Carolina. He testified that the acronym signifies a geographic location and that consumers seeing the OBX stickers would think of the Outer Banks geographic region. The evidence further showed that businesses and residences of the Outer Banks used the OBX abbreviation on a daily basis to refer to the Outer Banks. Also, thousands of website domain names incorporated OBX into their name. Accordingly, the district court held OBX-Stock did not have valid rights in the OBX marks, as there was no evidence of secondary meaning. OBX-Stock appealed.

The Fourth Circuit affirmed. On appeal, OBX-Stock contended that the geographic descriptiveness of OBX is not its fault, but rather the geographic connotation is attributable to the efforts of James Douglas and OBX-Stock and the success of the goods sold under the mark. The plaintiff further argued that a trademark owner whose efforts develop commercial success for goods, should not be punished because this market has become associated with a geographic location. However, OBX-Stock failed to address the absence of evidence of secondary meaning. The court held that the letters OBX had the potential of becoming a valid and enforceable trademark to identify an OBX brand product and OBX-Stock as a source of the product, but from the beginning, Douglas, the inventor of the OBX acronym, never intended that OBX become associated with a product as its brand or source. Rather, Douglas intended solely that OBX become associated with and descriptive of the geographic Outer Banks location. Even though OBX was a fictional word without prior meaning, Douglas wanted to conjure images of the Outer Banks. OBX became a commonly-accepted abbreviation for the Outer Banks, and thus, became geographically descriptive. OBX entered the "linguistic commons" as an often-used, everyday abbreviation of Outer Banks. The evidence of this was overwhelming. As described by the court:
Local headlines have read, "An OBX Institution Says Goodbye," and "Contest winner fell under OBX spell." By 2005, thousands of website domain names incorporated OBX into their name, ranging from obxnews.com to obxnightclubs.com. Businesses use OBX to describe their location such as, "Best Pizza in OBX" or "Enjoy the OBX With Us." Those wishing to charter a sailboat can call 1-866-SAIL-OBX, while a local business directory says "Welcome to Obx On-Line, your source to the Outer Banks Businesses." Individuals advertise vacation rent als with "OBX by Owner," while realtors "Welcome OBX Homeowners." There is an OBX Swim Club, an OBX Nudist Club, and an online forum discussing OBX fishing. The initials OBX are omnipresent in the Outer Banks and are universally understood as an abbreviation for "Outer Banks."
Here, there was simply no evidence of a secondary meaning, that is, consumer association of OBX Plaintiff's products or Plaintiff itself. Therefore, at best, OBX can only be a geographically a descriptive mark, and absent any secondary meaning, is not a valid trademark. The presence of the federal registrations could not overcome this lack of evidence of secondary meaning. Accordingly, the Fourth Circuit affirmed the district court's determination that OBX is a geographically descriptive abbreviation that has no secondary meaning, and therefore is not a valid trademark.To read the full decision in OBX-Stock, Inc. v. Bicast, Inc., click here.
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