Trademark Trial and Appeal Board
Patent and Trademark Office (P.T.O.)
*1 IN RE MOODY'S INVESTORS SERVICE, INC.
Serial No. 565,540
November 17, 1989
Hearing: September 6, 1989
Alexander, Unikel, Zalewa & Tenenbaum for applicant
Sharon Marsh
Trademark Examining Attorney
Law Office 4
(Paul E. Fahrenkopf, Managing Attorney)
Before Rice, Rooney and Quinn
Members
Member
An application has been filed by Moody's Investors Service, Inc. to register the designation "Aaa", as shown below, as a service mark for providing ratings of fixed interest rate obligations, [FN1] use since 1909 being asserted.
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Registration has been refused on the ground that the specimens of record do not show use of the designation "Aaa" as a service mark for the recited services. Applicant has appealed.
The record indicates that often a company, municipality, or other entity which desires to issue a debt instrument, such as a bond, will contact applicant. Applicant, for a fee, will evaluate the security of the instrument, and assign to it a particular rating, which reflects applicant's opinion of the investment quality of the instrument. Thereafter, the issuing entity can bring the instrument to market and provide potential purchasers with information about the instrument's investment quality simply by telling them the rating assigned to it by applicant. Sometimes applicant rates the debt instrument of a party at the request of a third party. Moreover, applicant sells, to potential investors or lenders, publications in which it reports the ratings which it has assigned to particular instruments.
The specimens originally submitted with the application were copies of the June 1985 issue of a 288-page publication entitled "Moody's Bond Record", wherein applicant lists its ratings, with other pertinent information, for more than 40,700 instruments. The first page of the publication contains an explanation of applicant's security rating system, and of the significance of each of applicant's rating symbols. That explanation reads, in part, as follows:
The purpose of Moody's Ratings is to provide the investors with a simple system of gradation by which the relative investment qualities of bonds may be noted.
Rating Symbols [emphasis in original]: Gradations of investment quality are indicated by rating symbols, each symbol representing a group in which the quality characteristics are broadly the same. There are nine symbols as shown below, from that used to designate least investment risk (i.e., highest investment quality) to that denoting greatest investment risk (i.e., lowest investment quality):
Aaa Aa A(3) Baa Ba B(3) Caa Ca C
***
Bonds which are rated Aaa [emphasis in original] are judged to be of the best quality. They carry the smallest degree of investment risk and are generally referred to as "gilt edge." Interest payments are protected by a large or by an exceptionally stable margin and principal is secure. While the various protective elements are likely to change, such changes as can be visualized are most unlikely to impair the fundamentally strong position of such issues.
*2 All of the uses of the designation "Aaa" in the specimen publication are as a rating symbol having the significance described above.
During the prosecution of the application, applicant submitted another specimen, together with an affidavit by an officer of applicant verifying that the specimen was in use prior to the filing of the application. The specimen is a promotional sheet featuring another of applicant's publications, namely, "Moody's Municipal Credit Reports." Copies of the front and back sides of the sheet are reproduced below, in reduced size. In the lower right-hand corner of the front side of the sheet, there is a picture of a number of applicant's Moody's Municipal Credit Reports (although the print which appears on each of the pictured reports does not show up in the reduced size copy, it does in the original) and, next to them, the designation "Aaa".
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Applicant has also submitted other evidence in support of its claimed right to registration of "Aaa" as a service mark. First, submitted with the application was the declaration of applicant's president, Mr. William O. Dwyer. Mr. Dwyer asserted essentially that since 1900, applicant has been engaged in the business of providing, to the financial community, reports and publications containing completely independent, expert appraisals of the quality of fixed interest rate obligations; that applicant's system for the rating of such obligations has been used since 1909; that no other company uses the "marks" "Aaa", "Aa", "Baa", "Ba", "Caa", and "Ca" in its rating system; that during the last 15 years, applicant has spent at least $3,735,000 in advertising and promoting its rating system and has received in excess of $100,000,000 in fees in consideration for providing its expert financial ratings under the aforesaid "marks;" and that as a result, the financial community and the public have long recognized the "marks" "as identifying the ratings of fixed interest rate obligations as provided by" applicant.
During the prosecution of the application, applicant submitted the affidavits of six other individuals, namely, the Managing Director, Utility Corporate Finance, of Kidder, Peabody & Co., Inc.; the Chief Financial Officer of Potomac Electric Power Company; the partner of Goldman, Sacks & Co. responsible for the utility department; the Executive Vice President, Finance and Administration, of the Duke Power Company; the Treasurer of Central and South West Corporation; and the Executive Vice President of Carolina Power & Light Company. Each affidavit attests to the affiant's familiarity with security rating systems; applicant's long and extensive use of the symbols "Aaa", "Aa", "Baa", "Ba", "Caa", and "Ca" in connection with the sale or advertising of its rating services; and the uniqueness and distinctiveness of those symbols; and also states that the symbols identify and distinguish applicant's rating services from the rating services of others.
*3 Applicant also submitted a copy of a temporary restraining order issued on August 28, 1980 by the United States District Court for the Northern District of Illinois, Eastern Division, in the case of Moody's Investors Service, Inc. v. Euromoney Publications, Ltd. and Publications Expediting, Inc., Civil Action No. 80 C 4610. The order temporarily enjoined defendants from, inter alia, using "the Moody's rating system consisting of 'Aaa, Aa, A, Baa, Ba, B, Caa, Ca, C' or any confusingly similar designations or systems" in connection with the defendant's investment information services or publications. Among the findings of fact stated in the order are the following:
2. Since 1909, Plaintiff has continuously used the Moody's rating system as an integral part of its investment rating and advisory services and has developed the worldwide acceptance and recognition of Moody's bond and commercial paper ratings.
3. The financial community and the public throughout the state of Illinois, the United States, and the world have long recognized and do recognize Moody's rating system as identifying the investment information services and expert appraisals offered and made by Moody's and only by Moody's.
5. ..., Defendant Euromoney, sometime in 1980, with full knowledge of plaintiff's prior rights in such rating system and without Moody's consent or permission, adopted and began to use Moody's rating system in its publication "Euromoney" to designate its ratings of the credit risk of various countries throughout the world.
7. Defendant Euromoney's use of a lettering system and designations identical to Moody's rating system creates the impression on the public that Euromoney's ratings are in some manner connected with, sponsored or approved by Plaintiff and, therefore, there is a likelihood of confusion.
In addition, applicant submitted a booklet, which bears on its front the title "The Investor's Key to Safety" and a chart of applicant's rating system (i.e., the symbols "Aaa", "Aa", "A", "Baa", "Ba", "B", "Caa", "Ca", and "C"). The inside text of the booklet consists of an explanation of applicant's rating system for security issues, and, at the end, a list of goods and services offered by applicant. This list appears under the heading "MOODY'S SERVICES", and each listed item appears under a subheading consisting of the mark "Moody's" and matter describing that particular item (i.e., "Moody's Manuals," "Moody's Trust and Estate Services," etc.). All of the uses of the designation "Aaa" in the booklet are as a rating symbol. There is no verification of use of the booklet prior to the application filing date.
Finally, applicant submitted a photocopy of a necktie ornamented with the symbols "Aaa", Aa", "A", and "Baa". Applicant's counsel asserts that the necktie is "a promotional device used to promote Applicant's services."
The Examining Attorney has also made evidence of record. First, there is a copy of an article entitled "Polishing Your Financial Image" from the April 16, 1984 issue of Industry Week. The article includes a chart comparing the rating systems assertedly used by applicant, Standard & Poor's Corp. ("S & P") and Fitch Investors Service ("Fitch"). The chart is reproduced below:
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*4 In most instances, references in the article to ratings given by one or another of the three rating agencies utilize the appropriate rating symbol coupled with the name of the rating agency. However, one sentence simply uses the term "triple-A" to refer to the top rating of all three agencies. [FN2]
In the same vein, the Examining Attorney has made of record printouts of excerpts from a number of articles in the NEXIS library of Mead Data Central's LEXIS database. These excerpts show use of the designation "Triple-A" to refer to ratings by Fitch, S & P, and applicant, as well as an unspecified rating agency; use of the designation "Aaa" to refer to a rating by applicant; and use of the designation "AAA" to refer to ratings by Fitch, S & P, and an unspecified rating agency.
Other evidence made of record by the Examining Attorney includes an advertisement from the April 9, 1985 issue of the New York Times, which shows the rating for a tax-free security as "Aaa/AAA", and copies of two letters to the editor, both of which show use of the designation "AAA" to refer to a rating by applicant. The first of these letters appeared in the September 24, 1984 issue of Businessweek and was signed by an individual who identified himself as the "Vice-President and Manager, Public Finance Dept." of a specified bank. The other letter appeared in the February 25, 1986 issue of The Washington Post and was signed by an individual identified only by name.
The term "service mark" is defined, in pertinent part, in Section 45 of the Trademark Act of 1946, 15 U.S.C. 1127 (as amended, effective November 16, 1989, by the Trademark Law Revision Act of 1988, Title 1 of Pub.L. 100-667, 102 Stat. 3935), as "any word, name, symbol, or device, or any combination thereof (1) used by a person ... to identify and distinguish the services of one person, including a unique service, from the services of others and to indicate the source of the services, even if that source is unknown." [FN3] Implicit in this statutory definition is a requirement that there be a direct association between the mark sought to be registered and the services specified in the application, i.e., that it be used in such a manner that it would be readily perceived as identifying such services. See: In re Advertising & Marketing Development, 821 F.2d 614, 2 USPQ2d 2010 (Fed.Cir.1987), and In re Whataburger Systems, Inc., 209 USPQ 429 (TTAB 1980). Whether a designation sought to be registered has been used as a mark for the goods or services recited in an application must be determined by examining the specimens of record in the application. See: In re Bose Corp., 546 F.2d 893, 192 USPQ 213 (CCPA 1976); In re Scientific Methods, Inc., 201 USPQ 917 (TTAB 1979); and cases cited in the foregoing cases.
*5 In the present case, we fully agree with the Examining Attorney's conclusion that the specimens of record do not show use of the designation "Aaa" as a mark identifying applicant's service of providing ratings of fixed interest rate obligations. As stated by the Examining Attorney, at pages 4-5 of her brief on appeal:
"Moody's Bond Issue" is a standardized publication containing information about the investment quality of various bonds. The designation "Aaa" is not used in the publication to identify the services for which applicant seeks registration, namely, fixed interest obligation rating services. Rather, "Aaa" is merely one of a number of symbols used by applicant to indicate its opinion of the relative financial soundness of a particular bond issue. As used in "Moody's Bond Issue," the symbol "Aaa" would be perceived only as certifying that a particular bond issue is a safe investment. The symbol would not be perceived as indicating the source of rating services. "Moody's" provides rating services. "Aaa" is a rating assigned to a particular fixed interest rate obligation.
Applicant has also submitted a flyer, "Moody's Municipal Credit Reports." Applicant contends that the symbol "Aaa" appears prominently on the flyer, and that the flyer shows service mark use of the symbol "Aaa". However, the flyer is an advertisement for goods, namely, a periodical that is prepared by the applicant and that contains detailed information about municipal bond issues. The symbol is not used on the flyer to identify the service for which applicant seeks registration. As used on the flyer, the symbol "Aaa" would not be perceived as a service mark for providing ratings of fixed interest rate obligations because there is no direct association between the symbol "Aaa" and applicant's rating services. [citation omitted].
The temporary restraining order issued by the United States District Court for the Northern District of Illinois, Eastern Division, is not persuasive of a different conclusion, because the issue there decided by the Court was not the same as the issue presented herein. That is, the Court did not rule on the question of whether the particular items submitted as specimens in this application show use of the designation "Aaa" as a service mark. Moreover, we have no way of knowing what record was before the Court. Further, we note that, notwithstanding the conclusory language of finding of fact number three in the order, applicant's rating symbols are consistently referred to therein not as marks but rather as "Moody's rating system."
As to the affidavits from the six executives, the affidavits are all identical, having apparently been prepared by applicant's attorney. While they each state that the symbols "Aaa", "Aa", "Baa", "Ba", "Caa", and "Ca" "are used extensively by Moody's Investors Service, Inc. in connection with the sale or advertising of its rating services and identify and distinguish those services from rating services of others", [FN4] we agree with the Examining Attorney that it cannot be assumed that the affiants' understanding of that statement mirrors the statutory meaning of the statement as interpreted in case law. In the absence of evidence that these affiants are versed in trademark law, or at least have an accurate understanding of the legal significance of the statement, the affidavits are of little probative value. Cf. In re Jones, 216 USPQ 328, 330 (TTAB 1982). What the affidavits do undoubtedly establish is that the affiants recognize the specified rating symbols and associate them with applicant. Indeed, the evidence of applicant's long and extensive use of its rating symbols (as well as some of the evidence made of record by the Examining Attorney) indicates that the affiants are not the only ones who associate these symbols with applicant. However, not every word, name, symbol, device, etc. which is associated with an applicant necessarily functions as a trademark or service mark; to function as a mark, and hence be registrable, the designation or device msut be used as a mark to identify the applicant's goods or services. As stated by the Court of Customs and Patent Appeals, in the case of In re Deister Concentrator Co., Inc., 129 USPQ 314 (1961), at page 320:
*6 Trademarks enable one to determine the existence of common source; but not everything that enables one to determine source is a trademark.
A trademark distinguishes one man's goods from the goods of others; but not everything that enables goods to be so distinguished will be protected as a trademark.
In the present case, it appears to us that applicant's various rating symbols, including the designation "Aaa", are used in the specimens of record to identify and distinguish not applicant's rating services, but rather the ratings themselves, and that they would be so perceived by the public. That is, the significance of the symbols, as they are used in the specimens, is that of rating symbols (i.e., indications of applicant's opinion of the investment quality of debt instruments), not service marks. While it is not inconceivable that a particular designation could be used, and therefore function, both as a rating symbol and as a trademark or service mark, applicant's designation "Aaa" is not so used in the specimens of record.
For the foregoing reasons, as well as for the other reasons set forth by the Examining Attorney in her appeal brief, we conclude that the specimens of record do not show service mark use of the designation "Aaa". [FN5]
Decision: The refusal to register is affirmed.
J. E. Rice
T. J. Quinn
Members, Trademark Trial and Appeal Board
FN1. Serial No. 565,540, filed October 28, 1985.
FN2. "The sentence reads, "Under present commercial bank regulations issued by the Comptroller of the Currency, bonds rated in the top four gradations by S & P, Moody's, and Fitch--triple-A, double-A, single-A, and triple-B, or Baa--are generally considered eligible for bank investment."
FN3. Prior to November 16, 1989, the Section 45 definition of a service mark was "a mark used in the sale or advertising of services to identify and distinguish the services of one person, including a unique service, from the services of others and to indicate the source of the services, even if that source is unknown." The amendment to the definition is immaterial in this case, since our decision would be the same under either definition.
FN4. Applicant appears to make no claim to service mark rights in the rating symbols "A", "B", and "C". This is not surprising since the rating system chart in the article made of record by the Examining Attorney shows these symbols included not just in applicant's rating system but also in the rating systems of S & P and Fitch.
FN5. The Examining Attorney stated repeatedly, during the prosecution of this application, that applicant's rating symbol "Aaa" appears to be registrable as a certification mark. We are inclined to agree.