On June 30, 2020, by an 8–1 vote, the US Supreme Court rejected a ¬per se rule by the US Patent and Trademark Office that a generic word followed by “.com” is necessarily generic and therefore ineligible for trademark protection. In doing so, the Supreme Court agreed with the judgments of the district court and circuit courts below, which likewise found that the proper test is whether the public perceives “booking.com” as identifying a single source for travel booking services.
Trademarks identify and distinguish the goods and services of a single party, and the federal Lanham Act establishes a system of trademark registration. Among other requirements for registration, a trademark must be distinctive, as judged along a spectrum of trademark distinctiveness. Inherently distinctive trademarks, in order of most to least strength, include fanciful or made-up words (e.g., Kodak); arbitrary marks that are existing words that have no connection to the underlying goods or services (e.g., Camel cigarettes); and then suggestive marks, which require some mental thought to connect them to an attribute of the products or services (e.g., Tide laundry detergent). Descriptive words are not inherently distinctive (e.g., Best Buy), but can still be protectable and registerable, but only upon proof of acquired distinctiveness (i.e., “secondary meaning”) arising from extensive use and advertising by the trademark owner. At the low end of the spectrum of distinctiveness are generic terms, which merely refer to a category or class of goods or services (e.g., wine or art) and are therefore never protectable or registerable as trademarks.
In 2011–2012, Booking.com filed applications to register its domain name, Booking.com, as a trademark. The US Patent and Trademark Office (PTO) refused registration, citing policy developed from a 132-year-old Supreme Court case which held that the addition of “Company” to a generic word does not render the resulting name (i.e., “Generic Company”) distinctive. (See Goodyear’s India Rubber Glove Mfg. Co. v. Goodyear Rubber Co., 128 US 598 (1888). At the time Goodyear was decided, “Goodyear Rubber” was considered generic for a kind of vulcanized rubber made by the Goodyear Company; therefore, the Supreme Court in Goodyear reasoned that “Goodyear Rubber Company” was necessarily generic.)
The Trademark Trial and Appeal Board affirmed the PTO’s refusal of registration, whereafter Booking.com challenged the PTO decision in the US District Court for the Eastern District of Virginia, which reversed the refusal of registration. The district court found that “‘Booking.com’—unlike ‘booking’—is not generic” and that the consuming public “primarily understands that BOOKING.COM does not refer to a genus, rather it is descriptive of services involving ‘booking’ available at that domain name.” The US Court of Appeals for the Fourth Circuit affirmed the judgment of the Virginia federal court (IP Update, Vol. 22, No. 3), and the PTO sought certiorari from the Supreme Court.
The Supreme Court granted certiorari (IP Update, Vol. 22, No. 11), and Justice Ruth Bader Ginsberg delivered the opinion of the Court, with which six other justices joined. Justice Sonia Sotomayor filed a short concurring opinion, and Justice Stephen Breyer dissented. The question under review by the Court was “whether the addition by an online business of a generic top-level domain (‘.com’) to an otherwise generic term can create a protectable trademark.”
Both parties in Booking.com agreed that “booking” is generic for the kind of travel booking services offered by Booking.com. Nevertheless, the Supreme Court found that the Goodyear principle should not automatically be extended to domain names:
A ‘generic.com’ term might also convey to consumers a source-identifying characteristic: an association with a particular website. As the PTO and the dissent elsewhere acknowledge, only one entity can occupy a particular Internet domain name at a time, so ‘[a] consumer who is familiar with that aspect of the domain-name system can infer that BOOKING.COM refers to some specific entity.’
Rejecting the PTO’s bright-line rule against registration of “generic.com” domain names, the Supreme Court said that the question of whether Booking.com is generic “turns on whether that term, taken as a whole, signifies to consumers the class of online hotel reservation services.” The Supreme Court found the PTO’s reliance on Goodyear to be flawed because it ignored “the bedrock principle of the Lanham Act” that the question of whether a term is generic must be answered by asking how consumers perceive the term.
The record in the case reflected that Booking.com entered extensive evidence of consumer recognition that Booking.com referred to a single source rather than a genus. In particular, a so-called Teflon survey, which is a well-recognized measure for genericness, found that approximately 75% of surveyed consumers believed Booking.com identifies a single source rather than a class or genus of services. At oral argument, Chief Justice of the United States John Roberts mirrored this finding, noting that someone looking to make a hotel reservation would not make a “booking.com,” but rather would simply make a “booking” (perhaps at Booking.com).
Concurring and Dissenting Opinions
Justice Sotomayor concurred in the judgment of the Court that there is no per se rule against registration of a generic word followed by “.com,” but expressed some concern about whether the PTO has the resources to conduct its own Teflon surveys for genericness and to critique survey evidence submitted by trademark applicants and their experts.
Justice Breyer dissented from the judgment of the Court. He believes that Goodyear is not inapposite as a result of the development of the internet and the domain name system. Breyer expressed concern about the potential anti-competitive effects of permitting a party to monopolize a generic term merely by adding a necessary top-level-domain extension, such as “.com.” Breyer noted that generic domains such as Wine.com are easier for consumers to find and remember, and the Court’s decision “will lead to a proliferation of ‘generic.com’ marks … [which] will tend to inhibit, rather than to promote, free competition in online commerce.”
The Supreme Court recognized that that affirmance of the PTO’s per se rule would have “opened the door to cancellation of scores of currently registered marks.” Indeed, Justice Ginsberg noted that that PTO’s own past practice of granting trademark registration for “generic.com” domain names such as Art.com and Dating.com appears inconsistent with the per se rule that the PTO was advancing in Booking.com. Booking.com’s brief to the Court also noted that other existing trademark owners such as Arthritis Foundation and Container Store have been able to register their trademarks despite the Court’s Goodyear decision, which purportedly prevented trademark protection for a generic word plus a corporate designation.
Addressing the concerns in Justice Breyer’s dissent that it would be anticompetitive for Booking.com to enjoy a monopoly on the generic word “booking,” the Court noted Booking.com’s concession at oral argument that “Booking.com” would be a weak mark, for which it would be harder to show a likelihood of confusion against future users of “booking.” The Court also recognized that a party using “booking” in a “non-trademark sense” would have available to it a defense that the use is a fair use that is beyond the reach of the trademark laws.
The question arises why trademark owners need to secure trademark registration for domain names if the ensuing scope of the registration would be severely limited. The practical answer is that ownership of a trademark registration is a gateway to remedies offered to trademark owners under the Lanham Act. For example, owners of trademark registrations are in better stead for cost-effective arbitrations against typosquatters like “Bookking.com” under the Uniform Dispute Resolution Policy (UDRP) for confusingly similar domain names, and ownership of a registration would make it easier for a party like Booking.com to stop an airport gift shop from selling merchandise bearing the trademark “Booking-it.com.”
The Supreme Court’s decision provides a good opportunity for companies to reevaluate whether acquiring a “generic.com” domain name would be good for their businesses. However, successful protection and exploitation of generic terms in brands or domain names requires careful planning and resources to ensure that the public understands the brands or names as source identifiers rather than mere generic words.
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The Supreme Court’s opinion is United States Patent and Trademark Office, et al v. Booking.com B.V., 591 US ___ (2020). Oral argument in the Booking.com case was the first case ever argued by telephone in the history of the Supreme Court, which resumed oral arguments by telephone after a pause in arguments due to COVID-19.