June 30, 2020
In United States Patent and Trademark Office et al. v. Booking.com B. V., the Supreme Court rejected the United States Patent and Trademark Office’s (“PTO”) hidebound rule that the combination of a generic word and “.com” is also generic.
To appreciate the holding, it is helpful to consider the meaning of “generic” that is particular to trademark law: a term is generic if it is the name of a class of goods or services as opposed to the name of some feature of the goods or services. For example, the office supply retailer Staples sells staples, but “staples” is not the term consumers use to refer to office supply retailers. Accordingly, the mark STAPLES is not generic for office supply retail services, although of course it would be generic for staples.
Applying that definition and foundational trademark principles, Justice Ginsberg, writing for an eight-to-one majority, finally resolved Booking.com’s quest to overturn the PTO’s determination that its trademark BOOKING.COM is generic for travel-reservation services.
Little remained in dispute after the district and circuit court decisions. The parties agreed on the relevant facts: “booking” is generic for travel-reservation services, but consumers do not perceive BOOKING.COM to signify online travel-reservation services as a class. The parties also largely agreed on the law: (1) a generic term names a class of goods or services, rather than any particular feature of the class; (2) whether a compound term like “booking.com” is generic depends on the mark as a whole, not its parts in isolation; and (3) the relevant meaning of a term is its meaning to consumers.
The majority also agreed with those principles, holding that a trademark of the form “generic.com” is generic for a class of goods or services only if it has that meaning to consumers. And because consumers do not perceive the term “booking.com” to mean online travel-reservation services as a class, it is not generic.
In reaching its decision, the majority distinguished a pre-Lanham Act case that held that the addition of “company” to a generic term does not render the combination nongeneric. The Court found the present situation different because only one entity can occupy a particular Internet domain name at a time, and therefore a domain name of the form “generic.com” is capable of identifying a source. The same is not true of adding “company” since the United States alone could harbor fifty or perhaps more firms called “Wine Company.” In addition, the court held that the bedrock principle is how consumers would understand the term. That principle is incompatible with the PTO’s proposed rule banning registration of all “generic.com” domain names, which entirely disregards consumer perception.
The Court was clear that its decision does not imply that all trademarks of the form “generic.com” are automatically nongeneric. It depends on whether consumers perceive the term as the name of a class. (Of course, as Justice Breyer notes in his dissent, there will probably never be a scenario where consumers query their friends regarding which pizzeria to patronize by asking, “What pizza.com should we order from tonight?,” so the Court’s decision in this case may result is something close to an automatic rule.)
The Court also addresses concerns, voiced by the PTO and the dissent, that allowing registration would be unduly anti-competitive. The majority dismissed such concerns as already addressed by existing trademark doctrines like the strength of a mark (the more descriptive a term, the narrower its range of protection) and classic fair use (using a term descriptively otherwise than as a mark is always permissible, even if there is a likelihood of confusion). Justice Breyer enumerates these concerns in a relatively unpersuasive litany (e.g., generic names are easy to remember and create an impression of authority) with the exception of an item culled from the Electronic Frontier Foundation’s amicus brief, namely that even if ultimately unsuccessful, the threat of costly litigation by owners of these registrations may chill others from using variants on the registered mark.
Justice Breyer was unconvinced that adding a top-level domain name to a generic term was any different than adding “company,” stating that “a top-level domain such as ‘.com’ has no capacity to identify and distinguish the source of goods or services.” But how many sources of wine would a consumer expect to be using the trademark WINE.COM? Presumably just the one used by the firm that operates the website at wine.com. It would be strange indeed if wine.com’s competitors began using WINE.COM as a trademark, thereby sending untold consumers to buy their wine through a competitor’s website. Justice Breyer also echoes the PTO’s argument that because domain names are functionally exclusive, their owners don’t need the protection afforded by federal registration. Booking.com’s litigation of this matter from the PTO through the Supreme Court suggests otherwise.
As the majority noted, because only one entity can occupy a domain name at a given time—including domain names of the form “generic.com”—they are capable of identifying a source, and thus should be eligible for trademark protection in accordance with standard trademark principles. Lower courts should, of course, afford these marks only the degree of protection that is commensurate with their strength. In many cases, these marks will be weak relative to suggestive, arbitrary and fanciful marks.
Author: David Steiner