In Corporacion Habanos, S.A. v. Guantanamera Cigars Co., the key issue was whether the materiality element of the geographic deceptive misdescriptiveness test was met, namely, whether a significant portion of the relevant consumers would be materially influenced in their decision to purchase GUANTANAMERA cigars by the geographic meaning of the mark.

In 2002, Corporacion Habanos, S.A. (opposer) opposed the attempted registration by Guantanamera Cigars Company (applicant) of the mark GUANTANAMERA for cigars. In 2008, the Trademark Trial and Appeal Board (TTAB) sustained the opposition on the ground that the applicant's mark was not entitled to registration under the Lanham Act because it was primarily geographically dececeptively misdescriptive (15 U.S.C. § 1052(e)(3)). The applicant appealed the TTAB decision to the District Court for the District of Columbia. On appeal, the District of Columbia found that the TTAB did not use the proper materiality standard in assessing whether a mark is primarily geographically deceptively misdescriptive and remanded the case to the TTAB for further proceedings on that issue.

In its decision on remand, the TTAB again sustained the opposition, finding that materiality was established and that the GUANTANAMERA mark as applied to cigars was primarily geographically deceptively misdescriptive and not entitled to registration.

On remand the TTAB applied the three-part test set out by the Federal Circuit in In re California Innovations, Inc., for assessing whether a mark is primarily geographically deceptively misdescriptive, noting initially that the District of Columbia agreed with the TTAB's prior finding that GUANTANAMERA satisfied the first two elements of the test, namely that:

The third element of the test is that the misrepresentation is a material factor in the consumer's decision. The TTAB noted that materiality requires a showing that a significant portion of the relevant consumers would be materially influenced in their decision to purchase the product or service by the geographic meaning of the mark. This standard was established by the Federal Circuit's decision in In re Spirits International. In re Spirits was decided after the TTAB's original 2008 decision and held that geographic deceptive misdescriptiveness requires a finding that a significant portion of the relevant consuming public be deceived by the misrepresentation in the mark.

To assess materiality, the TTAB noted that because GUANTANAMERA is a Spanish term, the assessment required determining whether Spanish speakers in the US are a substantial portion of the intended audience for the goods and, if so, whether they would be materially influenced in their decision to purchase applicant's goods by the geographic meaning of the mark.

The TTAB first found that persons who speak or know Spanish were a substantial portion of the intended purchasers of the applicant's cigars because:

The TTAB then rejected the applicant's argument that direct evidence of materiality is necessary. The TTAB examined ex parte decisions, decisions from district court cases and the merits of requiring direct evidence to hold that materiality may be established by indirect evidence of consumer perception. The TTAB noted that, although potentially helpful, a consumer survey is not required. The TTAB also indicated that depositions of an applicant's actual purchasers are not critical in determining materiality because what is important is determining the materiality of the misrepresentation in the mark to the intended group of purchasers.

The TTAB noted that indirect evidence of consumer perception may include:

Reviewing the evidentiary record in Corporacion Habanos, the TTAB found that consumers who speak or understand Spanish would be materially influenced in their decision to purchase the applicant's cigars due to the geographic meaning of the mark. The TTAB examined advertisements, webpages, testimony, magazines, cigar publications and encyclopedias. These materials indicated that cigar sellers in the US market non-Cuban cigars through branding and other associations that link the cigars to Cuba because they know that consumers value associations with Cuba when making cigar purchasing decisions.

Finding all three elements of the geographic deceptive misdescriptiveness test met, the TTAB sustained the opposition.

Trademark owners should consider potential geographic deceptive misdesriptiveness, and the evidentiary considerations outlined in the Corporacion Habanos decision, when seeking to register or oppose a mark that identifies a geographic location.