By: Timothy Chien
Next year, the Supreme Court will decide whether the addition of top-level domains such as “.com” can turn otherwise generic marks into protectable trademarks under the Lanham Act. On Friday, November 8, The U.S. Supreme Court granted cert in Booking.com B.V. v. United States Patent and Trademark Office (USPTO). In its petition, the USPTO asked the Supreme Court to review a Fourth Circuit ruling that rejected the Trademark Trial and Appeal Board (TTAB) finding BOOKING.COM generic and thus not federally registrable.
The Lanham Act
Under the Lanham Act, the main federal statute governing trademark law, trademark protection is only conferred on terms or marks that are distinctive. Put another way, only terms that can distinguish the source of a particular product or service from others in the market can be trademarked.
Courts have established four different categories where marks may fall on a distinctiveness spectrum. Where a mark is classified on the spectrum has a direct impact on the mark’s registrability and strength of protection given to it. The categories, listed below in order of decreasing distinctiveness and strength of protection, are: Fanciful and Arbitrary; Suggestive; Descriptive; and Generic.
The distinction between generic and descriptive marks is crucial and often litigated, as it is in this case, because generic marks—everyday terms that name a product or service category, rather than the source of the product—can never be trademarked. It is important to note that whether a mark is generic is always considered in the context of the particular good or service offered by the mark. For example, the mark APPLE for an apple-tree grower would be generic but would not be generic for a certain well-known manufacturer of computers and phones. On the other hand, descriptive marks—marks that only describe the good or service—may acquire trademark protection if the mark acquires secondary meaning. If the public associates the descriptive mark with the source for that product or service, rather than merely describing the product or service, the mark has acquired secondary meaning and is thus capable of being trademarked.
Background on Booking.com B.V. v. USPTO
Booking.com is a company that operates a website on which customers can book travel and hotel reservations. In 2011 and 2012, Booking.com sought federal trademark registration for its name and filed four trademark applications for the use of BOOKING.COM.
After evaluating Booking.com’s applications, the USPTO examiner determined that the mark was generic with respect to “online hotel and lodging services” and concluded that BOOKING.COM as a mark was not registrable. Booking.com appealed to the Trademark Trial and Appeal Board, an adjudicatory body within the USPTO that, among other things, decides disputes concerning whether a mark is entitled to trademark registration. The TTAB affirmed the refusal of the USPTO.
The TTAB concluded that the term BOOKING was generic to the hotel reservation services that the company provided and that the addition of “.com” did not render the composite mark capable of functioning as a source identifier. Although the TTAB acknowledged that it was impossible to use, “BOOKING.COM in a grammatically coherent way to refer generically to anything” (for example, Travelocity or Expedia referring to themselves as “Booking.coms” to describe the hotel and travel reservation services they provided), the TTAB iterated that the true test of genericness was whether “the public understands the term to refer to the genus [hotel reservation services].” As a result, the TTAB found the dictionary definitions and how actual third parties used the words “booking” and “.com” to be highly persuasive in understanding how the public perceived the terms of the mark.
In 2016, Booking.com filed a new action in the District Court for the Eastern District of Virginia. The district court reversed the USPTO’s determination that BOOKING.COM was generic as applied to the services that it provided. The USPTO maintained that BOOKING.COM was generic based on the dictionary definition of the mark because these dictionary definitions usually “reflect the public’s perception of a word’s meaning and its contemporary usage.” However, the court found evidence produced by Booking.com in the form of a Teflon survey (a type of survey that assesses whether subjects perceive a term as a brand name or a generic term) especially persuasive. The survey demonstrated that over 74.8% of customers associated BOOKING.COM with the company, rather than as the generic name of the service. The court saw this as compelling evidence of what consumers actually believed. Ultimately, the court concluded that BOOKING.COM was not generic but descriptive and had acquired secondary meaning. Accordingly, the court ordered the USPTO to register the mark in the classes where it had acquired secondary meaning.
The USPTO then appealed to the Fourth Circuit Court which affirmed the district court. The court emphasized that the party seeking to establish genericness always has the burden of establishing that a proposed mark is generic, and that the present case was, “one such rare occasion where the record evidence supported a finding that the USPTO failed to meet its burden of proving that the public primarily understood BOOKING.COM to refer to the genus of online hotel reservation services, rather than the company or brand itself.”
Although the court agreed with the USPTO’s interpretation of the law that whether or not consumers referred to other online hotel services as “Booking.coms” was not an element of the primary significance test, the court still found public usage to be “highly relevant” and probative of what the public actually understood the mark to mean under the primary significance test. Furthermore, the court held that it was not an error for the district court to have placed greater weight in direct consumer evidence than other forms of indirect evidence, such as dictionary definitions, in evaluating whether the public recognized BOOKING.COM as a company rather than as a generic term of hotel reservation services.
Furthermore, the court categorically rejected the USPTO’s assertion that adding a top-level domain name to a generic term should always result in a generic composite mark. The court iterated that such marks may be “non-generic where evidence demonstrates that the mark’s primary significance to the public as a whole is the source, not the product.”
In response to the Fourth Circuit ruling, the USPTO filed a petition with the Supreme Court on July 5, 2019.
What does the US Supreme Court decision mean for trademark law?
It will be interesting to see where the Supreme Court settles on the issue of whether adding a domain name to an otherwise generic term would allow such terms to be trademarked. If the Court sides with Booking.com, it is not clear if this would lead to an increased number of “generic.com” trademark owners bringing infringement suits against similar domain names (a concern that the USPTO expressed in its petition). Although the Lanham Act militates against such anti-competitive behavior—infringement being harder to prove for descriptive marks and there existing a descriptive fair use defense that permits, in some circumstances, use of another’s mark—this may not dissuade some trademark owners from trying their luck in court.