IP Law Daily BOOKING.COM is registrable for hotel reservation services
Tuesday, June 30, 2020

BOOKING.COM is registrable for hotel reservation services

By Cheryl Beise, J.D.

The dispositive question for the registrability of any trademark is the meaning of the mark to the relevant consumers. Consumers recognize "Booking.com" as a brand name for hotel reservation services.

In a trademark dispute asking whether a business’s addition of a domain suffix such as ".com" to a generic term like "booking" can create a protectable trademark, the U.S. Supreme Court, in a 8-1 decision, has held that the dispositive question for the registrability of any trademark is the meaning of the mark to the relevant consumers. A decision of the U.S. Court of Appeals in Richmond—holding that "Booking.com" is registrable as a matter of law for hotel reservation services—was affirmed. The Court abrogated the USPTO’s "nearly per se" rule that combining a generic term like "booking" with a top-level domain like ".com" necessarily yields a generic composite. The Court clarified that its 1888 Goodyear decision does not stand for the proposition that adding a commercial designation like "company" or "corporation" to generic terms never yields a protectable mark, but rather that "[a] compound of generic elements is generic if the combination yields no additional meaning to consumers capable of distinguishing the goods or services." Justice Breyer filed a dissenting opinion to express his view that a top-level domain such as ".com" is merely a web address component with no capacity to identify and distinguish the source of goods or services (USPTO v. Booking.com B.V., June 30, 2020, Ginsburg, R.).

Background of the case. Netherlands-based Booking.com B.V. filed four applications under Section 66(a) of the Lanham Act for extension of protection in the United States of its mark BOOKING.COM for travel and tourist agency services in International Class 39 and hotel and resort reservations services in Class 45. The USPTO trademark examining attorney refused registration on the ground that the mark was generic for the applicant’s services, and alternatively, that the mark was merely descriptive and without acquired descriptiveness. The Trademark Trial and Appeal Board affirmed the refusals. Booking.com appealed to the federal district court in Alexandria, Virginia.

The district court reversed the Board’s genericness finding, concluding that the term "Booking.com" was descriptive. The district court determined that "Booking.com" was registrable as a matter of law, but only for hotel reservation services, because Booking.com produced sufficient evidence of acquired distinctiveness in relation to those services, including a Teflon survey demonstrating that 74.8% of respondents identified "Booking.com" as a brand name. A divided panel of the U.S. Court of Appeals in Richmond affirmed the district court’s decision. The Fourth Circuit expressly rejected the USPTO’s contention that adding the top-level domain (TLD) ".com" to a generic second-level domain (SLD) like "booking" can never yield a non-generic mark.

In November 2019, the Supreme Court granted the USPTO’s petition for certiorari, which posed the question of "whether the addition by an online business of a generic top-level domain (‘.com’) to an otherwise generic term can create a protectable trademark."

Genericness. The Court began by explaining that for a trademark to receive the protection of federal registration on the Principal Register, the mark must be one "by which the goods of the applicant may be distinguished from the goods of others." A generic term generally is ineligible for protection as a trademark. A descriptive mark, on the other hand, may be registered if it has achieved significance "in the minds of the public" as identifying the applicant’s goods or services—a quality called "acquired distinctiveness" or "secondary meaning." When determining registrability of a mark, the Lanham Act’s primary focus is on consumer perception—the primary significance of the registered mark to the relevant public.

Considering these principles, the court said the dispositive question regarding 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 Court noted that even the USPTO no longer disputed that consumers do not perceive the combined term "Booking.com" to be a generic term for a general class of booking services. For example, consumers would not understand the reservation service provider "Travelocity" to be a "Booking.com" service. "That should resolve this case," the Court said. "Because ‘Booking.com’ is not a generic name to consumers, it is not generic."

USPTO per se rule. The Court observed that the USPTO has adopted a nearly per se rule that would render "Booking.com" ineligible for registration, regardless of specific evidence of consumer perception. The only exception, according to the USPTO, is when the combination of a generic term to a generic top-level domain results in wordplay (for example, "tennis.net").

The Court explained that this exclusionary rule follows from a common law principle, acknowledged by the Court more 130 years ago, that the addition of commercial designations like "company" or "corporation" does not transform otherwise generic terms into protectable marks. Goodyear’s India Rubber Glove Mfg. Co. v. Goodyear Rubber Co., 128 U.S. 598, 602–03 (1888). The USPTO maintained that ".com" is the on-line equivalent of "Company" or "Inc." and that adding ".com" to a generic term conveys no additional source-identifying meaning.

The Court rejected the notion that "generic.com" terms are capable of signifying only a generic class of online goods or services. "A ‘generic.com’ term might also convey to consumers a source-identifying characteristic: an association with a particular website," said the Court. "Thus, consumers could understand a given ‘generic.com’ term to describe the corresponding website or to identify the website’s proprietor."

The Court further eschewed the PTO’s "flawed" understanding of Goodyear as holding that "Generic Company" terms "are ineligible for trademark protection as a matter of law"—regardless of how "consumers would understand" the term. This interpretation disregards the Lanham Act’s bedrock principle of consumer perception. "Instead, Goodyear reflects a more modest principle harmonious with Congress’ subsequent enactment: A compound of generic elements is generic if the combination yields no additional meaning to consumers capable of distinguishing the goods or services," the Court clarified.

Therefore, "[w]hether any given ‘generic.com’ term is generic 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," the Court held.

Competition concerns. The Court was not persuaded by the USPTO’s argument that affording trademark protection for a term like "Booking.com" would hinder competition. According to the USPTO, granting trademark protection for "Booking.com" could exclude or inhibit competitors from using the term "booking" or adopting domain names like "ebooking.com" or "hotel-booking.com."

Noting that such concern attends "any descriptive mark," the Court pointed out that several doctrines ensure that registration of "Booking.com" would not convey a monopoly on the term "booking." First and foremost, a competitor’s use does not infringe a mark unless it is likely to confuse consumers. Booking.com had conceded that as a descriptive term, "Booking.com" is a conceptually "weak" mark, entitled to less protection than arbitrary or fanciful marks. And even where some consumer confusion exists, the Court observed that the doctrine of classic fair use permits use of a descriptive term, "fairly and in good faith" and "otherwise than as a mark," merely to describe one’s own goods.

The USPTO also expressed doubt that owners of "generic.com" brands need trademark protection in addition to existing competitive advantages of owning a domain name that is easy to find and remember. Such "competitive advantages, however, do not inevitably disqualify a mark from federal registration," the Court said. "All descriptive marks are intuitively linked to the product or service and thus might be easy for consumers to find using a search engine or telephone directory."

The Court concluded that the USPTO’s policy concerns did not support a categorical rule against registration of "generic.com" terms.

Sotomayor concurring opinion. Justice Sonia Sotomayor filed a brief opinion concurring in the majority’s opinion, but with two clarifications. Justice Sotomayor agreed with the dissent’s observation that consumer-survey evidence "may be an unreliable indicator of genericness," but indicated that she did not read the Court’s opinion as suggesting that surveys are "the be-all and end-all." Rather, other sources, such as "dictionaries, usage by consumers and competitors, and any other source of evidence bearing on how consumers perceive a term’s meaning," may also inform whether a mark is generic or descriptive. Also, Sotomayor noted that the USPTO may have properly concluded, based on such dictionary and usage evidence, that Booking.com was in fact generic for the class of services at issue. But the weight of evidence showing genericness in the underlying case was not the question before the Court.

Breyer dissenting opinion. Justice Stephen Breyer filed a dissenting opinion to express his view that, like the corporate designations at issue in Goodyear, a top-level domain such as ".com" has no capacity to identify and distinguish the source of goods or services. "It is merely a necessary component of any web address," Justice Breyer said.

Justice Breyer also echoed the USPTO’s concerns about the anticompetitive effect of registering "generic.com" marks. "By making such terms eligible for trademark protection, I fear that today’s decision will lead to a proliferation of ‘generic.com’ marks, granting their owners a monopoly over a zone of useful, easy-to-remember domains," Justice Breyer said. "This result would tend to inhibit, rather than to promote, free competition in online commerce."

Practitioner reactions. Debevoise & Plimpton partner David H. Bernstein representing Booking.com told IP Law Daily that today’s decision properly set aside the bright line rule that a compound mark comprised of a generic term and a corporate designation or a TLD can never attain recognition as a brand name. The Court recognized that the trademark registration regime depends primarily on consumer perception—whether a given mark serves as an indicator of source for the applied-for goods or services to the relevant consumers.

Bernstein does not expect a flood of trademark applications from applicants seeking to register "generic.com" marks because a high evidentiary standard is required to establish that a descriptive mark has acquired distinctiveness. Only brands that have achieved recognition, such as Weather.com, Law.com, Wine.com and Hotels.com, will qualify for registration on the Principal Register. Nor does Bernstein expect that the decision will result in harm to competitors. Rather, brand owners of similar marks will seek to distinguish their marks to avoid confusion. Trademark law serves to protect consumers from confusion. Bernstein, however, expressed disappointment with Justice Breyer’s dissenting opinion, particularly his re-weighing of the evidence presented to the district court.

Hope Hamilton, intellectual property partner at Holland & Hart, was not surprised by the Court’s predictablynarrow opinion that there is no per se rule that Generic.com marks are, on the whole, generic.

"I sense that some practitioners may try to bootstrap today’s opinion to try to extend trademark rights to generic terms that have become source identifiers over time, but that were undeniably generic when first adopted," Hamilton told IP Law Daily. She noted that today’s decision did not overrule the long-established principal that no amount of proffered evidence can rescue a generic mark. "Footnote 3 of the majority’s opinion seems to expressly disclaim any attempt to decide that issue," Hamilton observed.

The case is Dkt. No. 19-46.

Attorneys: Noel J. Francisco, U.S. Department of Justice, for the USPTO. Lisa Schiavo Blatt (Williams & Connolly LLP), Jonathan E. Moskin (Foley & Lardner LLP), David H. Bernstein (Debevoise & Plimpton LLP) for Booking.com B.V. Hope Hamilton (Holland & Hart, LLP).

Companies: Booking.com B.V.

MainStory: TopStory TechnologyInternet Trademark GCNNews

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