Spirits International, N.W. (“Spirits”) applied to register the mark MOSKOVSKAYA for vodka. The Examiner refused registration based on the conclusion that the mark was geographically deceptively misdescriptive. Applying the doctrine of foreign equivalents, the Examiner translated the mark to “of or from Moscow.” The Examiner then found that Moscow was a generally known geographic location and that the public would likely believe the goods were from Moscow because there was a goods/place association between vodka and Moscow. The Examiner further found that such an association would be material to consumers because Russian vodka is highly regarded. Spirits did not dispute the translation and conceded that the vodka will not be manufactured, produced or sold in Moscow, nor will it have any other connection with Moscow.

Spirits filed a response and motion for reconsideration, relying on a mallintercept survey. The motion was denied and the case was reviewed by the Board.

The Board reasoned that the analysis of whether a mark should be rejected under subsection e(3) requires that the mark materially deceive the public. In assessing the materiality element, the Board stated that “an appreciable number of consumers for the goods or services at issue” must be deceived, but concluded that “it is never necessary to show all, or even most, of the relevant consumers would be deceived. All that is required is a showing that some portion of relevant consumers will be deceived.” (emphasis added). The Board concluded that the materiality require ment was met because of its deception to Russian speakers.

The Board further concluded that there “is a presum[ption] that a word in on of the common, modern languages of the world will be spoken or understood by an appreciable number of U.S. consumers for the product or service at issue.” The Board also took judicial notice of the fact that according to the 2000 U.S. Census, Russian is spoken by 706,000 people in the United States. 706,000 people was apparently deemed an “appreciable number.” Applicant’s survey was not found to be persuasive or probative.

On Appeal, the Federal Circuit agreed with the Board on the issue of translation under the doctrine of foreign equivalents, but emphasized that the inquiry must also include a materiality test. The Court extensively discussed the history of subsection e(3), before concluding that subsection e(3) like subsection (a), the false advertising provision of the Lanham Act, and the common law, requires that a significant portion of the relevant consuming public be deceived; and that population is often the entire U.S. population. There was no contention in this case that the relevant consuming public is specifically composed of a target community. The Court found that the Board had failed to consider whether Russian speakers were a “substantial portion of the intended audience.” The Court did not opine on the ultimate question of whether a substantial portion of the intended audience would be materially deceived. It did note however, that only .25% of the U.S. population speaks Russian, and that “if only one quarter of one percent of the relevant consumers was deceived, this would not be, by any measure, a substantial portion. However, it may be that Russian speakers are a greater percentage of the vodka-consuming public; that some number of non-Russian speakers would understand the mark to suggest that the vodka came from Moscow; and that these groups would together be a substantial portion of the intended audience.” A prima facie case of material deception might be proven if such is the case.