During the current term of the United States Supreme Court, there are several cases that will have a major impact on trademark law and intellectual property protection strategy for brand owners. One of these cases, USPTO v Booking.com, addresses the question of whether an otherwise generic term – “booking” in reference to an online travel reservation website – can be transformed from an unregistrable generic term into a trademark simply by adding “.com” onto the term. The Supreme Court has not opined on generic marks since 1938 in its decision Kellogg Co v National Biscuit Co, and notably this case will evaluate the generic doctrine regarding the registrability of trademarks in the context of a domain name. The Supreme Court’s decision in this case that the addition of “.com” can transform an otherwise generic term into a registrable and protected trademark under the Lanham Act is likely to have significant implications for the generic doctrine and how companies apply for their marks, particularly where their products and services are offered in a domain encompassing a term that refers to their brands.
Understanding the existing law under the Lanham Act on generic terms and what can be registered is necessary to understand the significance of the question that was before the Supreme Court. The Lanham Act allows for the registration of a mark that is not: generic; descriptive; suggestive; or arbitrary or fanciful. There may be other considerations that will result in a trademark application being refused registration under the Lanham Act, but for the purposes of the USPTO v Booking.com case, the categories at issue are the generic and descriptive nature of a trademark. Under US trademark law, a mark is considered generic if the public understands the term to be primarily a class or common name for the goods or services covered by the mark (and not indicative of a source) and thus such a term will not be permitted to register. Notably, a term that is “coined” and created for the purpose of being used as a trademark may become generic over time through common usage. Both scenarios where a term is generic or becomes generic will preclude a mark from being protected under the Lanham Act.
Additionally, if a mark, on its own, expresses the goods or services offered under the mark by describing a characteristic, quality, function, purpose, feature or use of the mark, then this mark will be refused registration under the Lanham Act as being merely descriptive. Notably, an exception to this is when a mark that is considered descriptive has acquired “distinctiveness” or “secondary meaning”, which means that the public has come to associate the mark with the applicant as being the source of the goods or services. The applicant of a trademark is responsible to establish that the mark has acquired such distinctiveness in order to overcome a refusal for registration of the subject mark.
The trademark applicant, Booking.com BV (Booking.com) uses the mark at issue, Booking.com, to promote and offer its online travel reservation services. In 2011 and 2012, Booking.com filed four applications with the United States Patent and Trademark Office (USPTO) seeking registration of the Booking.com mark in the United States based upon an existing international registration. The examiner for these applications initially rejected them on the ground that the Booking.com mark was descriptive of Booking.com’s services and therefore not eligible for registration. Despite Booking.com’s objection to the refusal that the Booking.com mark had acquired distinctiveness, the examiner issued a new refusal, finding that the mark for Booking.com was generic as applied to the services at issue; and alternatively, that the mark was merely descriptive, and Booking.com had failed to show that it acquired the necessary secondary meaning to overcome the refusal.
Following the rejection of these applications, Booking.com filed a notice of appeal for each application to the Trademark Trial and Appeal Board (TTAB) and requested consolidated briefing. The TTAB granted the appeal; however, the TTAB ultimately affirmed the four refusals of the subject applications in three separate opinions. Although the opinions are different, the ultimate conclusion of the opinions rests upon the same finding – that “booking” combined with “.com” would be understood by consumers to refer to online travel reservation services, which is similar to the services proposed in the four applications, and thus make the Booking.com mark generic with respect to the services offered under the mark. In the alternative, the TTAB concluded that the Booking.com mark is merely descriptive of the services offered by Booking.com, and that Booking.com failed to show that the term had acquired distinctiveness or secondary meaning.
In April 2016, Booking.com filed a civil action pursuant to 15 USC § 1071(b) in the Eastern District of Virginia to challenge the USPTO’s denial of the four registrations for the Booking.com mark. As a note, appeals made pursuant to this section allow the applicant and the USPTO to conduct discovery, and the applicant can introduce evidence that was not previously considered by the USPTO, and new evidence that is introduced will be resolved de novo by the district court judge, whereas a direct appeal to the Federal Circuit will only review the record that was before the USPTO. Both parties presented new evidence on the issues of genericness and descriptiveness, including a new Teflon survey that showed that 74.8 per cent of polled customers primarily identified Booking.com as the provider of those services.
In August 2017, in evaluating a motion for summary judgment, the district court did find that the term “booking” was generic for hotel and travel services that were listed in Booking.com’s applications, but this was not the end of the analysis – the court held that it must consider whether combining the term “booking” with “.com” remains generic. Here, the court found that top-level domains (.com) are generally source-identifying and that a mark composed of a second-level domain (here, “booking”) would be descriptive and may be eligible for registration based upon a showing of secondary meaning or distinctiveness of the mark in the eyes of the public. Applying this to the facts of the case, the district court granted the motion for summary judgment in part based upon its holding that Booking.com had satisfied its burden of showing secondary meaning for the mark as to hotel reservations, but not for travel agency services, and ordered the USPTO to register the Booking.com mark for the services offered in class 43 in connection with the mark’s applications and remanded the applications for further administrative proceedings.
Following this decision, the USPTO, joined by the American Intellectual Property Association as amicus curiae, appealed the district court’s decision to the Fourth Circuit. On 4 February 2019, the Fourth Circuit issued its opinion in a two-to-one decision, which affirmed the district court’s opinion, but agreed in part with the dissent that the district court’s reasoning was flawed.
The Fourth Circuit concluded that the district court did not err in finding that the USPTO did not satisfy its burden of showing that the Booking.com mark is generic, and also found that the district court did not err in finding that the Booking.com mark was descriptive, rather than a generic mark. In discussing the framework for whether a mark is generic, the Fourth Circuit noted that it follows a three-step test, commonly known as the primary significance test, and includes the following:
Importantly, the Fourth Circuit noted that the Lanham Act codified the primary significance test in determining whether a registered trademark has become generic in the context of a cancellation proceeding, but noted that the Fourth Circuit and Federal Circuit have also applied this test in registration proceedings to determine genericness. In its opinion, the Fourth Circuit concluded that it was not an error for a court to consider evidence of the public’s use of a term in evaluating primary significance, as the district court did here, and the consumer surveys in the record did suggest that public primarily understood Booking.com to indicate the company rather than its services. Based upon the record, the Fourth Circuit held that the district court did not err in finding Booking.com to be a descriptive mark, rather than a generic one.
One of the central concerns of the USPTO is that companies would be allowed to reserve generic terms for themselves simply by adding a “.com” to a generic top-level domain
Notably, the USPTO, in support of its argument that the Booking.com mark was generic, relied upon an 1888 Supreme Court case, Goodyear’s Rubber Manufacturing Co v Goodyear Rubber Co, 128 US 598 (1888), which held that the addition of commercial indicators such as “Company” to merely describe classes of goods or services could not be trademarked. The USPTO asserted that adding “.com” is no different to adding “company” to a generic term, as it is “a generic identifier for an entity operating a commercial website.” In rejecting this argument, the Fourth Circuit stated that Goodyear was decided almost 60 years prior to the passage of the Lanham Act and that no other circuit has adopted such a bright line rule. Moreover, the Fourth Circuit clarified that where the proposed mark includes a “.com,” the addition of a “.com” itself does not “have source-identifying significance when added to an [second-level domain] like booking” because the inquiry is whether the public primarily understands the term as whole to refer to the source of the goods or services offered under the mark. Additionally, in its opinion, the Fourth Circuit observed that the USPTO only challenged the district court’s determination that Booking.com mark was generic, and therefore noted that the USPTO did concede that if the mark is descriptive, then it would be entitled to protection.
Here, the Fourth Circuit ultimately concluded that adding a “.com” to a second-level domain can result in a non-generic, descriptive mark upon a showing of acquired distinctiveness in the eyes of the relevant public, and such was the case here, and therefore affirmed the district court’s opinion that the Booking.com mark was descriptive. Notably, the Fourth Circuit pointed out that the USPTO did not challenge the district court’s finding that Booking.com had acquired secondary meaning where the mark is considered descriptive.
Following the Fourth Circuit’s decision, the USPTO did petition for rehearing, but this petition was denied on 5 April 2019. The Solicitor General, on behalf of the USPTO, filed a petition for a writ of certiorari to the Supreme Court on 5 July 2019. On 8 November 2019, the Supreme Court granted the USPTO’s petition.
The key issue that was before the Supreme Court here was whether the addition by an online business of a generic top-level domain (.com) to an otherwise generic term can transform an otherwise unprotectable mark into one that can be protected and registered pursuant to the Lanham Act.
One of the central concerns of the USPTO was that if the decision of the Fourth Circuit was affirmed, then companies would be allowed to reserve generic terms for themselves simply by adding a “.com” to a generic top-level domain. In support of this argument, the USPTO in its briefing noted that in the online context, allowing a “.com” to be added to a generic top-level domain would hinder competition because only one entity can have contractual rights to use a specific domain at a given time and allowing entities to create “generic.com” trademarks would enhance the competitive effects present in the online context – which is in contradiction to the intent of what trademark law seeks to protect. Furthermore, the USPTO relied heavily on the Supreme Court’s precedent in Goodyear, decided in 1888, which held that the addition of an entity name does not render a combination non-generic, and the same rationale should apply to adding a top-level domain such “.com” to an otherwise generic term, such as “booking”. The USPTO further argued that if the Fourth Circuit’s decision stands, the decision may have significant anticompetitive effects, namely by allowing companies to usurp contractual rights with respect to domain names and trademark rights to generic “.com” domain names. Moreover, the USPTO argued that this would also harm consumers because such a holding would prevent competitors from being able to call their products and services by their common names. The USPTO added that Booking.com would have sufficient protection against its competition concerns through unfair competition laws, even without federal protection for the Booking.com trademark.
In contrast, Booking.com advocated that the proper test to determine if a mark was generic was the primary significance test, and that this test comports with the objectives of the Lanham Act in promoting the goodwill of brands and providing protection to brands. Because of this, Booking.com agreed that the Fourth Circuit properly followed this test by giving credit to the district court’s evaluation of Booking.com’s survey evidence and finding the mark to be non-generic. Moreover, Booking.com took issue with the USPTO’s reliance on Goodyear and its argument to put forth a rule rooted in the holding of that case. In its argument, Booking.com emphasised that if the Supreme Court were to accept the USPTO’s position – namely that combining a generic term with a suffix such as “Company,” “.com” or “store” always makes those marks generic for those goods and services, despite consumer evidence to the contrary that the public believe the mark is not generic and associated with the brand – this would be confusing to consumers. In support of this, Booking.com referred to a number of national chain stores, such as the Container Store, the Mattress Shoppe, the Medicine Shoppe and Waffle House, as a few examples, that sell the products or services contained in the name of the branded businesses and attached an appendix to detail such evidence. Additionally, Booking.com asserted that the USPTO’s position would also subject these marks to cancellation for a number of registered “generic.com” marks, and stated that companies use these marks to identify themselves to consumers. Furthermore, Booking.com argued that denying protection for its mark Booking.com, and other similar marks, would allow competitors to use same term “booking.com” to attract customers and falsely promote themselves as Booking.com and offer the same services that Booking.com currently offers under its mark in attempt to deceive and defraud consumers.
On 4 May 2020, the Supreme Court heard oral arguments in the case in the Court’s first ever telephonic hearing. The crux of the USPTO’s argument was that the Supreme Court should find that the term “booking” is generic and would not be a protectable mark under Goodyear, which held that the addition of entity designations such as “Company” or “Inc” to a generic term does not make a mark protectable under the Lanham Act.
In response, Booking.com advocated for the Supreme Court to hold that the primary significance test is the correct method for distinguishing between descriptive marks, which can be eligible for protection, and generic terms, which are not. Booking.com’s argument relied upon three main points, namely: the Lanham Act requires applying the primary significance test; the passage of the Lanham Act abrogated Goodyear; and the primary significance test is consistent with the statutory purpose of the Lanham Act to allow the public to decide which marks are entitled to protection.
Some of the justices expressed concerns that allowing registration of Booking.com would create monopoly power for companies, rather than a commercial identification, in the context of adding a “.com” to an otherwise generic term. For example, in response to the argument presented by Booking.com, Justice Breyer commented: “The trademark law is supposed to give the company the advantage that grows out of a commercial identification. It’s not supposed to created monopoly power or market power beyond that.” Justice Breyer elaborated on these concerns and noted that the concerns presented by Booking.com may also be alleviated through recourse from unfair competition law.
On 30 June 2020, the US Supreme Court affirmed the Fourth Circuit’s decision in an 8-1 decision, rejecting the USPTO’s contention that the term “Booking.com” is generic and thus ineligible for federal trademark registration. The Court held that because “Booking.com” is distinguishable to consumers from a class of online hotel-reservation services, it cannot be considered a generic term. The Court rejected the USPTO’s argument that adding “.com” to a generic term conveys no distinguishable meaning from one provider to another. Justice Ginsburg, writing for the majority, found that “only one entity can occupy a particular Internet domain 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.’”
In concluding that the Booking.com mark was not generic and eligible for trademark protection, the Court first explained that a generic term “names a ‘class’ of goods or services, rather than any particular feature” of that class. The Court additionally noted that with respect to compound terms, the term must be viewed “as a whole” when analyzing whether the mark has acquired distinctiveness or secondary meaning. And lastly, the Court noted that that distinctiveness of mark will be determined by the term’s “meaning to consumers.” In its analysis, the Court referred to the intent behind the Lanham Act, explaining that consumer perception is of primary significance in determining a mark’s distinctiveness or genericism. Thus, the Court explained that, “if ‘Booking.com’ were generic, we might expect consumers to understand Travelocity—another such service—to be a ‘Booking.com.’” The Court found no such evidence that consumers perceived “Booking.com” mark this way.
The Supreme Court declined to extend the holding of Goodyear to company names for domain names and noted that the addition of “Company” or “Inc” relating to the partnership or association of a company does not necessarily apply to “generic.com” terms. In its analysis, the Court found that a consumer could, in fact, view a “generic.com” term to be a source-identifying characteristic and may be able to infer that “Booking.com” referred to “some specific entity.”
The Supreme Court also rejected the USPTO’s concern that a “Booking.com” trademark would prevent competitors from using the term “booking,” explaining that a “competitor’s use does not infringe a mark unless it is likely to confuse consumers.” The Court noted that even in cases where there may be consumer confusion, the fair use doctrine would prevent competitors from liability where a descriptive term is used to merely describe one’s goods or services in a fair and good faith manner.
The sole dissenter, Justice Breyer, disagreed that the enactment of the Lanham Act “repudiate[d] Goodyear and its ilk.” In his dissent, Justice Breyer noted that although the Lanham Act extended protection to descriptive marks that have acquired distinctiveness, this did not change the principle that generic terms are ineligible for trademark protection.
The Supreme Court’s decision in USPTO v Booking.com essentially means that the USPTO may no longer, as a rule, determine that combining a generic term with “.com” will automatically render that compound term generic. Where the term has acquired distinctiveness in the eyes of the public for the mark at issue, these compound marks may very well be eligible for federal trademark protection. However, the Supreme Court did not set a specific standard of what is required to show distinctiveness, and it will be important for brands to monitor if the USPTO issues further guidance on this issue within the coming months.
The most important implication of this decision is that it provides a new avenue for federal registrations for brands that choose to market their product or service names in conjunction with their domain names, like Booking.com has done, and will be important for brands seeking to register such marks similar to Booking.com to keep in mind the holding of this decision when considering if their mark plus “.com” will now be eligible for registration based upon acquired distinctiveness.