The US Supreme Court has rejected a bright-line rule denying applications to register trademarks comprising a generic term and “.com.” In an 8–1 decision by Justice Ruth Bader Ginsberg in United States Patent and Trademark Office v. Booking.com B.V., the Court held on June 30 that “generic.com” is a generic name for a class of goods or services only if the term has that meaning for consumers.
Because it was uncontested on appeal that consumers “do not perceive the term ‘Booking.com’ to signify online hotel reservation services as a class,” the US Supreme Court held that BOOKING.COM is eligible for federal trademark registration. The Court expressly declined to issue a rule automatically classifying all “generic.com” names as nongeneric, saying that whether a “generic.com” term is generic will depend on the facts of each case relevant to consumer perception.
The question of whether a “generic.com” term can be a protectable trademark rose to the Supreme Court because Booking.com filed an application to register BOOKING.COM for hotel reservation services. The US Patent and Trademark Office (PTO) rejected the application, stating that the claimed trademark was generic. Generic terms, as the Supreme Court acknowledged, “are ordinarily ineligible for protection as trademarks at all.” Rather, the law allows for registration of marks on the Principal Register that are suggestive, arbitrary, or fanciful, and of marks that are descriptive so long as they achieve significance in the minds of the public as identifying the applicant’s goods or services (referred to as “acquired distinctiveness” or “secondary meaning”).
Booking.com appealed the decision to the Trademark Trial and Appeal Board, which also concluded that the term BOOKING.COM is generic. In the alternative, the Board found that even if the term BOOKING.COM were descriptive, it would not be registrable because it lacks secondary meaning. Booking.com appealed the decision to the district court, which found that BOOKING.COM is descriptive rather than generic, and that the term had acquired secondary meaning for hotel reservation services, such that the mark was entitled to registration. The PTO appealed the district court decision to the US Court of Appeals for the Fourth Circuit, which affirmed the district court decision. Like the district court, the Fourth Circuit rejected the PTO’s contention that the combination of a generic term with “.com” “is necessarily generic.” The Supreme Court affirmed.
In reaching its decision, the Supreme Court noted that domain names “are unique” and that a given domain name is assigned to only one entity at a time. As a result, “generic.com” terms may convey to consumers a source-identifying characteristic, namely, association with a particular website. The exclusive nature of domain names makes “generic.com” different from Generic Company or Generic Inc., which are generic terms that are incapable of acquiring secondary meaning because the terms only indicate that the owners have formed an association to deal in such goods or services. The Court also noted that the PTO had granted registrations in the past to ART.COM and DATING.COM, and that the per se rule advanced by the PTO would put those registrations at risk.
As it has done in other cases involving intellectual property of late, the Court held that a flexible approach is required, and that whether a “generic.com” term is generic will depend 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.” Evidence relevant to this inquiry includes consumer surveys, dictionaries, usage by consumers and competitors, and any other source of evidence bearing on how consumers perceive a term’s meaning.
In addition to rejecting the PTO’s per se rule that “generic.com” terms are generic and ineligible for registration, the Court rejected the argument that protection for “generic.com” terms would be anticompetitive. The Court said that the scope of rights afforded such marks would be hemmed in, as they may be weaker and exist in a “crowded field,” and also that third parties will have a fair use right to use descriptive terms to “fairly and in good faith” describe their goods.
The Booking.com decision is likely to result in an uptick in the number of applications filed for generic.com terms claimed as trademarks, as well as an increase in enforcement efforts and litigation over whether such terms are protectable and to what extent trademark owners can enforce their rights.
We also expect to see additional “generic.com” terms being registered as trademarks in the United States. But we do not expect a large number of such registrations since the Supreme Court made clear that it was not issuing a blanket rule automatically classifying such terms as nongeneric, and emphasized that any assessment will depend heavily on consumer perception.
In this regard, the majority opinion and Justice Sotomayor in her concurring opinion both noted that the PTO had not contested the lower courts’ assessment of consumer perception, and that there can be issues with consumer surveys involving generic terms. Those issues attracted a fair amount of attention in each of the majority, concurring, and dissenting opinions issued in Booking.com, as well as during oral argument, with the justices referencing an amicus brief filed by academics who warned about the challenges of surveys regarding generic terms.
As a result, the door is open for the PTO and the courts to require trademark owners to marshal solid evidence of consumer perception that is not limited to consumer surveys, which may well require owners seeking to establish “generic.com” marks to invest heavily over a period of time. While Booking.com was able to do that, not all businesses will be in the same position.
Our team of trademark lawyers at Morgan Lewis have experience assisting companies of all sizes and across all industries assessing the registrability of proposed marks, evidence required to establish that terms have acquired distinctiveness, consumer surveys, and the various doctrines discussed by the Supreme Court, both offensively and defensively.
If you have any questions or would like more information on the issues discussed in this LawFlash, please contact the authors, or any of the following lawyers from Morgan Lewis’s trademark/copyright team:
Boston
Joshua M. Dalton
Rachelle A. Dubow
San Francisco
Carla B. Oakley
Gene K. Park
Washington, DC
Kristin H. Altoff
Robert C. Bertin
Ron N. Dreben
Dana S. Gross
Rebecca E. McDougall
Anita B. Polott
Joseph E. Washington