IP Law Daily High Court considers genericness of ‘.com’ trademarks in Booking.com case
Monday, May 4, 2020

High Court considers genericness of ‘.com’ trademarks in Booking.com case

By Cheryl Beise, J.D.

In historic case allowing first real-time public broadcasting of oral arguments, Supreme Court considers implications of registering ".com" marks.

The U.S. Supreme Court today heard oral arguments in a case asking whether a business’s addition of a domain suffix such as ".com" to a generic term like "booking" can create a protectable trademark. Counsel for Netherlands-based Booking.com, B.V., argued for registration of its "Booking.com" mark for reservation services based on application of a test evaluating the primary significance of a descriptive mark as a whole to consumers, while counsel for the USPTO argued against registration based on application of an analogous common law principal prohibiting protection of a generic term combined with a generic enterprise designation, such as "Company" or "Inc." The Justices appeared to be searching for a solution that would honor public perception of a unique brand indicator while simultaneously protecting competition. The argument today was first of several telephonic arguments the Court has agreed to broadcast live during the pendency of the Covid-19 pandemic emergency. Erica Ross, Assistant to the Solicitor General, presented arguments on behalf of the USPTO. Lisa Blatt, of Williams & Connolly LLP, argued on behalf of Booking.com, B.V. (USPTO v. Booking.com B.V., Dkt. No. 19-46).

Background of the case. Netherlands-based Booking.com 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 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. The district court reversed the Board’s genericness finding, concluding that the term BOOKING.COM was descriptive. The district court then 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 service, 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. Circuit Judge James Wynn filed a dissenting opinion to express his view that under established trademark principles, the combination of a generic term with a generic top level domain designator does not make the combined mark less generic. In November 2019, the Supreme Court granted the USPTO’s petition for certiorari, asking, "Whether the addition by an online business of a generic top-level domain (‘.com’) to an otherwise generic term can create a protectable trademark."

USPTO’s argument. Erica Ross began by reciting the general rule that a generic term is never entitled to registration, regardless of secondary meaning or acquired distinctiveness. More than 130 years ago, the Supreme Court held 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 addition of ‘.com’ is the on-line equivalent of ‘Company’ or ‘Inc.," Ross argued. According to Ross, the mere ownership of the Booking.com domain already provides significant competitive advantages over brick-and-mortar equivalents like "Booking Inc."

Chief Justice Roberts asked why the absolute rule adopted in a case 130 years ago should supersede the Lanham Act’s adoption of the primary significance of the mark to the public as the test for determining whether a mark is generic. Ross replied that the Lanham Act preserves Goodyear’s underlying principal that generic terms are never susceptible to trademark registration, even when they acquire secondary meaning, whereas merely descriptive terms may obtain trademark significance when they acquire secondary meaning.

The Chief Justice observed that if "Booking.com" is a generic term, it necessarily describes a category of goods or services. "But, when you talk about other companies in that category, whether it's Travelocity, Priceline, or whatever, nobody refers to those as—as Booking.coms," he said. Again citing Goodyear, Ross responded that that a generic term can indicate either a specific entity or how the public would understand a specific term. For example, "Wine, Incorporated" cannot be trademarked, yet nobody refers to a class of Wine, Incorporated.

Justice Thomas asked why a generic mark with an Internet address like "Booking.com" should be treated differently than a vanity mark with a unique phone number, such as "1-800-Booking." Ross maintained that there is a difference because a trademark incorporating an Internet address would permit the mark owner to block competitors from using similar marks, such as "ebooking.com."

Justice Ginsburg expressed concern about the ramifications for previously registered ".com" marks if the Court were to rule in favor of the government. Ross said that the PTO would not cancel the marks sua sponte, but a competitor could petition for cancellation.

In response to questioning by Justice Breyer, Ross opined that the Goodyear case struck a balance between brand protection on one hand and competition, preventing the monopolization of language, on the other.

Justice Alito asked whether a rule that makes sense in the internet age can be reconciled with the Lanham Act. Ross replied that in her view, Goodyear continues to control for the same reason that this other preexisting common law does.

Justice Kagan asked if the government loses on a categorical rule, what test the Court should be thinking about when considering the registration of generic marks. Ross said the Court should follow Goodyear.

Justice Sotomayor asked Ross whether in her view the primary significance test is never to be used to determine genericness. Justice Kagan pressed Ross on what standard the USPTO uses when it does register ".com" marks. Like Justice Kagan, Justice Sotomayor wanted to know what else could be examined if the Court rejects a categorical distinction. Ross stood by the government’s position that the principals of Goodyear should be controlling.

Justice Gorsuch followed up and asked Ross to set aside Goodyear and address the same question. Ross noted that the Lanham Act commands that generic terms are never registrable, even if the term has achieved secondary meaning. Justice Gorsuch wanted to know why the existing doctrinal tools promoted by the Lanham Act for evaluating likelihood of confusion are insufficient to address competition concerns. Ross did not believe that competition concerns would be adequately protected by likelihood of confusion analysis alone.

Justice Kavanaugh asked Ross to identify the the real-world practical problems she would foresee if ".coms" could obtain trademarks. Ross opined that there is a huge competitive advantage by owning a generic.com mark that threatens competitors’ ability to compete. Moreover, in her view, the respondent and owners of other ".com" marks would pursue infringement cases against confusingly similar domain names to protect their online monopolies.

Booking.com’s argument. Lisa Blatt began by stating that the primary significance test, that is, whether consumers primarily think the name is a genus or a potential brand, should be upheld because the Lanham Act mandates this test; the Lanham Act abrogated Goodyear; and this test furthers the statutory purpose to let consumers decide which marks deserve trademark protection. She noted that for 70 years courts have embraced the "primary significance" test now codified in 15 U.S.C. § 1064.

Chief Justice Roberts observed that this is not a cancellation case under Section 1064, where the primary significance test is dispositive. Blatt said that Section 1064 essentially ratified the primary significance test and further noted that there is no other test to determine what consumers think. She also explained that at the time of the Goodyear decision, even descriptive marks were not protectable.

The Chief Justice also expressed concern that trademarking "Booking.com" would impede competitors from using similar descriptive terms, like "ebooking.com," "hotelbooking.com," "eurobookings.com," and "travelbooking.com." Blatt responded that all ".com" marks should be treated the same—if they are merely descriptive without evidence of secondary meaning, then they would not qualify for registration. She also noted that the more descriptive a mark, the more difficult it is to prove likelihood of confusion.

Justice Thomas asked if Booking.com needs the primary significance test to prevail. Blatt said no, but added that there can’t be a per se rule that would ignore what consumers think. It so happens that the status quo for determining genericness is the primary significance test, she said. Blatt also explained that courts are required to look at how consumers view a mark as a whole and not merely its component parts.

Justice Ginsburg wanted to know when a ".com" mark would be considered to be generic. Blatt said that in addition to survey evidence, other evidence is relevant to the genericness, including dictionary definitions, competitive use, articles, and news reports.

Justice Ginsburg also asked why unfair competition law does not afford enough protection. Blatt replied that registration gives a mark owner additional tools against foreign and domestic cybersquatters and Internet scammers, including pursuing in rem proceedings under Section 1125(d).

Justice Breyer expressed concern about the creation of monopoly power that might vest in a ".com" mark registration beyond commercial identification. He added that commercial identification might flow from the fact that consumers know that each Internet company has one domain name. Blatt disagreed, pointing out that the ubiquity of travel, ticket. and rent marks shows that they can coexist without confusion.

Justice Alito asked what Booking.com’s position would be vis-à-vis very similar marks, like "ebooking.com." Blatt replied that her client would not object to that type of use. She pointed out that the fair use doctrine allows non-trademark use of descriptive or generic terms. She noted again that the more descriptive a mark, the less protection it is afforded.

Justice Alito also was concerned about the expanded degree of monopoly power a mark now has in the internet era. The ownership of Booking.com domain name gives tremendous advantage over other companies in the same business. "And now you want to get even more advantage by getting trademark protection," he observed. Blatt was not concerned with crowding out similar marks. She pointed out that many similar marks have peacefully co-existed, like The Wig Shop, The Wig Store, and The Wig Mart.

Justice Sotomayor also was troubled by the potential for enabling monopolies if there is no per se rule and the common names for every business can be registered. Blatt said that the PTO is quite capable and accustomed to applying the primary significance test to analyze consumer understanding of generic marks. Justice Sotomayor also was concerned about district courts reweighing evidence the PTO has already considered, given that there was no deference to PTO factual determinations in the ex parte context.

Justice Kagan, like Justices Breyer, Alito, and Sotomayor, was disturbed by the disconnect between the primary significance test and consumer awareness that domain names by definition are unique. Blatt acknowledged the potential for a problem, but noted that courts and the PTO have been dealing with this issue for two decades.

Justice Gorsuch asked Blatt to expand on the notion that monopolization concerns are mitigated by the weakness of marks comprised of two generic terms and the fair use doctrine. Blatt explained that it is very hard to show likelihood of confusion with regard to descriptive marks because consumers can easily distinguish between them.

Justice Kavanaugh asked whether the principle of Goodyear still has some value outside the ".com" context, in the classic company context. Blatt declined to answer directly, instead saying the Court should not extend Goodyear to ".com" marks and further noting that Goodyear would "kill" nonprofit associations.

USPTO rebuttal. In her rebuttal, Erica Ross objected to the presumption that the Lanham Act superseded all prior common law. "I think just a couple of weeks ago in Romag, this Court, nine justices, looked to the common law to determine what the Lanham Act preserved," she said. Ross also suggested that the primary significance test coexists with prior law, which includes Goodyear as a "sort of guardrail." Third, Ross discounted the idea that competitive harm would not result from registration of .com marks. Lastly, Ross said that unfair competition law would protect against copycats.

The case is Dkt. No. 19-46.

Attorneys: Erica L. Ross, Associate Solicitor General, U.S. Department of Justice, for the USPTO and Andrei Iancu, Director, USPTO. Lisa S. Blatt (Williams & Connolly LLP) for Booking.com B.V.

Companies: Booking.com B.V.

MainStory: TopStory TechnologyInternet Trademark GCNNews

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