Last July, I wrote about Iancu v. Brunetti, a trademark case decided by the U.S. Supreme Court which held that "the Lanham Act's prohibition on registration of 'immoral or scandalous' trademarks violates the First Amendment."
This year the Supreme Court decided another trademark case - Patent and Trademark Office v. Booking.com - that’s likely to be even more important than Brunetti. Booking.com, as the name might suggest, involves the applicability of federal trademark protection to internet domain names when used as trademarks. The Justices, in a first, held oral argument by teleconference and broadcast those arguments through a live audio feed, and decision has been praised in the business community.FN1 As a result, it is now possible to register trademarks by combining a top-level domain label like ‘.com’ or ‘.net’ with a term or phrase that simply indicates or describes a business’s products or services (i.e. a “generic term”).
Booking.com, as you might know, is an online hotel-reservation service. They had sought registration of the mark ‘booking.com’ but the U.S. Patent and Trademark Office (USPTO) refused the registration on the grounds that the mark was simply a generic term for any online-hotel reservation service and as such was insufficiently distinctive for protection as a registered trademark. Ultimately, the case was appealed all the way up to the Supreme Court.
Trademark-Law Concepts Overview:
Before examining the Supreme Court’s reasoning, it may be useful to review some basic trademark law concepts. First, remember that the purpose of trademark law is to protect "the ability of consumers to distinguish among competing producers."FN2 Thus, a mark will not be eligible for federal registration unless it is an indicator of source that is unlikely to be confused by consumers with any existing mark on similar products or services.
"Trademark law “does not protect generic terms, meaning terms that do no more than name the product or service itself... but only protects distinctive marks — words, names, symbols, and the like” – that differentiate the goods or services of a particular business."
Accordingly, trademark law “does not protect generic terms, meaning terms that do no more than name the product or service itself... [but only] protects those distinctive marks — words, names, symbols, and the like” – that differentiate the goods or services of a particular business from those of others.FN3
Additionally, the Lanham Act “establishes a system of federal trademark registration” and “the owner of a mark on the principal register enjoys valuable benefits, including a presumption that the mark is valid.” FN4 Registerable marks that do not end up on the principal register end up on the supplemental register, which is for marks that “could one day gain eligibility for the principal register” and, thus, the supplemental register “accords more modest benefits; notably, a listing on that register announces one's use of the designation to others considering a similar mark.”FN5
Furthermore, word marks are broken down into one of five categories in order to determine whether they are sufficiently distinctive to serve as a trademark. These categories are (1) generic, (2) descriptive, (3) suggestive, (4) arbitrary, and (5) fanciful.FN6 Generally, the strength of a mark increases as it moves to a higher numbered category and generic marks, as the weakest marks, are not entitled to any protection under trademark law and are accordingly ineligible for federal trademark registration. (For more on these categories and creating a strong trademark, see Using Trademarks To Protect Your Brand: How To Create A Strong Mark.)
The last three categories – suggestive, arbitrary, and fanciful – are all considered inherently distinctive and are accordingly eligible for registration on the principal register. Under the Lanham Act, it is also possible for descriptive marks to be registered. “But to be placed on the principal register, descriptive terms must achieve significance in the minds of the public as identifying the applicant's goods or services—a quality called ‘acquired distinctiveness’ or ‘secondary meaning.’"FN7 “Without secondary meaning, descriptive terms may be eligible only for the supplemental register.”FN8
Generic marks, on the other hand, lack even the ability to become distinctive and, thus, are not eligible for even the supplemental register. Rather, “everyone may use generic terms to refer to the goods [or services] they designate.”FN9
Trademark-Law Concepts Applied to Booking.com:
These general considerations are not disputed; the 8-1 majority opinion authored by Justice Ginsburg and Justice Breyer's dissenting opinion each begin their analyses by presenting this same review of trademark law. Moreover, all sides accept that ‘booking’ is a generic term when it comes to the making of online or other hotel reservations.
The crux of the issue is whether the addition of a domain designation like ‘.com’ to the end of a generic term results in a mark that is necessarily generic as well. The Supreme Court has now held that such a mark is not necessarily generic. While some marks of the form 'generic.com' may be considered generic, others may be (at least) descriptive and, therefore, capable of becoming distinctive and eligible for registration on the principal register through the acquisition of secondary meaning.FN10
"While some marks of the form 'generic.com' may be considered generic, others may be descriptive and, therefore, capable of becoming distinctive and eligible for registration on the principal register through the acquisition of secondary meaning."
In the end, in determining whether a mark is generic or has secondary meaning will depend on how consumers perceive the relevant mark. This will turn on questions like whether the term or phrase indicates a kind or class of goods or services or, alternatively, a particular brand or company. And the answer to this sort of question can shift over time – companies like Kleenex, Xerox, and even Google all risk a shift in consumer perception that move them from indicating a particular brand or company to a whole class of goods or services.
Booking.com, the Court reasoned, is not indicative of a kind or class of goods or services. Reasonably well-informed consumers understand that booking.com is associated with only a single brand or company. In driving this point home, Justice Ginsburg writes:
Under these principles, whether "Booking.com" is generic turns on whether that term, taken as a whole, signifies to consumers the class of online hotel-reservation services. Thus, if "Booking.com" were generic, we might expect consumers to understand Travelocity — another such service — to be a "Booking.com." We might similarly expect that a consumer, searching for a trusted source of online hotel-reservation services, could ask a frequent traveler to name her favorite "Booking.com" provider.FN11
Since consumers do not use or understand the term ‘booking.com’ to indicate a kind or class of goods or services, it is not a generic mark. As a result, it cannot always be the case that “combining a generic term like ‘booking’ with ‘.com’ yields a generic composite.”FN12
The USPTO had argued that ‘booking.com’ is “a generic name for online hotel-reservation services” since, according to the USPTO, “when a generic term is combined with a generic Internet-domain-name suffix like ".com," the resulting combination is generic.”FN13
The USPTO’s position, it argued, was supported by the decision of an 132 year old case, decided before the passage of the Lanham Act: Goodyear's India Rubber Glove Mfg. Co. v. Goodyear Rubber Co., 128 U. S. 598. “Goodyear, the PTO maintains, established that adding a generic corporate designation like "Company" to a generic term does not confer trademark eligibility.”FN13 The USPTO argued that similarly “adding ‘.com’ to a generic term—like adding ‘Company’—can convey no source-identifying meaning.”FN14
But the Supreme Court noted that, unlike adding Company, a ‘.com’ is uniquely associated with a particular website that consumers understand indicates a particular company. “Consumers could understand a given ‘generic.com’ term to describe the corresponding website or to identify the website's proprietor.”FN15 As a result, generic terms combined with a top-level domain label can acquire the distinctiveness necessary for federal registration.
In summary, the Court concluded, "Whether any given 'generic.com' term is generic, we hold, depends on whether consumers in fact perceive that term as the name of a class or, instead, as a term capable of distinguishing among members of the class."FN16
Remaining Questions and Concerns:
Both the majority and the lone dissent from Justice Breyer acknowledge a possible anti-competitive or chilling effect on commerce that might result from allowing businesses to trademark generic terms that have been coupled with common top-level domain labels. For example, the majority and dissent both consider the issue of whether granting the rights associated with federal registration to ‘booking.com’ would permit claims for infringement against marks or websites like ‘ebooking.com’ or ‘hotel-booking.com’. Neither side seemed to think that registering ‘booking.com’ as a mark should permit or authorize claims against any other marks or sites like ‘ebooking.com’ or ‘hotel-booking.com’ – but uncertainty will remain in this area as future cases and decisions develop.
The Court did suggest that fair use exceptions and the fact that descriptive marks are inherently weak marks would mitigate the concern about chilling or curtailing competition. Justice Breyer's dissent, on the other hand, is more concerned about the specter or threat of litigation as a way to pick off or limit business rivals. But the majority notes that this concern arises in connection with the registration of any descriptive marks that have acquired secondary meaning – they are all inherently connected to the products or services that they describe and therefore will naturally rank higher in search engine results, require less marketing and advertising in order to get consumers to associate the mark with its products or services, and may be perceived as more authoritative or trustworthy by consumers.
"Neither side seemed to think that registering ‘booking.com’ as a mark should permit or authorize claims against any other marks or sites like ‘ebooking.com’ or ‘hotel-booking.com’ – but uncertainty will remain in this area as future cases and decisions develop."
Nevertheless, descriptive marks possessing secondary meaning are still registerable with the USPTO and eligible for placement on the principal register. And this is true for all such marks, not just those that have added a top-level domain label to a generic term.
It can be tricky determining whether a mark is descriptive or simply generic, but an experienced trademark attorney may be able to help. If you need assistance registering a domain name as a trademark or with any other trademark matters, please Reach out, Today!
This article provides only general information and is not intended to be a substitute for legal advice.