United States Patent and Trademark Office v. Booking.com B. V., No. 19-46 (June 30, 2020).
On June 30, 2020, Booking.com, a travel-reservation website, prevailed against the U.S. Patent and Trademark Office (“USPTO”) as the U.S. Supreme Court opened the door to a new class of trademarks derived from generic terms. The 8-1 decision followed the Court’s first-ever telephonic oral arguments, holding that generic words coupled with “.com” may be eligible for trademark registration if they are distinctive to consumers. In Justice Ruth Bader Ginsburg’s final majority opinion on the Court, she wrote that “[b]ecause Booking.com is not a generic name to consumers, it is not generic.”
This decision marks the resolution of a long-running legal dispute beginning in 2012 after Booking.com applied to register four marks containing the term “Booking.com.” The USPTO’s examining attorney and Trademark Trial and Appeal Board rejected the travel site’s applications, concluding that “booking” is a generic term used to refer to any travel-reservation website, and is thus ineligible for registration. Booking.com sought review in the U.S. District Court for the Eastern District of Virginia, which determined that consumers understand “Booking.com” as a descriptive rather than generic term. The Fourth Circuit Court of Appeals affirmed and the USPTO’s petition for certiorari brought the issue to the Supreme Court.
Under the Lanham Act, eligibility for trademark registration turns on a mark’s capacity to distinguish goods in commerce. The distinctiveness of a mark is typically measured on an increasing scale: 1) generic; 2) descriptive; 3) suggestive; 4) arbitrary; or 5) fanciful. Generic marks are not usually eligible for protection. Because they are broadly used to identify a particular product, allowing companies to control them would grant allow for an unfair competitive advantage. However, Justice Ginsburg reasoned that where a generic term carries a secondary, distinctive, meaning to consumers, it may be eligible for trademark registration as a descriptive mark.
The Court dismissed the USPTO’s argument that Booking.com is analogous to Goodyear, a 19th century case holding that generic terms appended with commercial designations like “company” or “incorporated” (e.g. “Generic Co.”) produce generic names that are ineligible for registration. Goodyear's India Rubber Glove Mfg. Co. v. Rubber Co., 128 U.S. 598 (1888). The Court distinguished “Generic.com” marks from “Generic Co.” because consumers are less likely to be confused as to the source of a domain name. Unlike generic business associations, Internet domain names are exclusive to the owner. This results in less confusion for consumers because they are immediately directed to the source of the good or service upon entering the domain name into their browser address bar.
While the Court rejected the USPTO’s proffered bright-line rule that composite generic terms are ineligible for registration, the majority disclaims that “Generic.com” websites are not automatically non-generic. Rather, “Generic.com” websites are only eligible for registration if the term has acquired distinctiveness as a descriptive mark. The Court relied upon Booking.com’s consumer survey results showing that nearly 75% of respondents regarded “Booking.com” as a brand name to hold that “Booking.com” is non-generic.
In his dissent, Justice Stephen Breyer argued that the majority decision is “inconsistent with trademark principles and sound trademark policy” and will have troubling anticompetitive consequences for online commerce. The justice expressed concern that trademark protection for “generic.com” domain names is excessive because the domain owner already enjoys exclusive rights to the web-address. The anticompetitive effect of such protection is troubling because generic terms already enjoy competitive advantages, including instant trust, credibility, and authority status in the marketplace. The majority dismisses these concerns, noting that the decision only extends descriptive mark privileges which are permissible under established trademark principles.
Ultimately, this case may change the way businesses brand their services and generate marketing strategies. Practitioners should take heed that mark eligibility will only extend to those domain names that have established brand awareness among consumers. Given the Court’s reliance on consumer perception surveys in this decision, domain owners should focus on cultivating brand recognition with customers and conducting surveys to support an acquired distinction claim.