Posted Mon, March 16th, 2020 10:03 am by Jessica Litman
Editor’s note: On March 16, the Supreme Court postponed oral argument in U.S. Patent and Trademark Office v. Booking.com and other cases scheduled for the March sitting, and “will examine the options for rescheduling those cases in due course.”
U.S. Patent and Trademark Office v. Booking.com raises the question whether a business can create a registrable trademark by combining an unprotectable generic term with a generic top-level domain name like “.com.”
Trademarks and service marks are words or symbols that communicate the source of goods and services. The Lanham Trademark Protection Act provides rules for registering trademarks and for protecting both registered and unregistered marks. The law bars trademark protection for generic terms, like “shredded wheat” or “rubber.” Generic terms may not be registered as trademarks, and any registered mark that is or has become the generic term for the product it identifies may be canceled at any time. The courts have explained that competitors need and are entitled to use generic terms to describe their products to consumers, so it would undermine the competitive policies embodied in the trademark law to allow a business to monopolize generic terms.
Even though the statute does not allow the registration of generic terms, it does permit the registration of terms that were initially “merely descriptive” of goods or services if the public has come to understand them primarily as trademarks rather than as words or symbols that describe product qualities. The trademark COCA-COLA is protected even though it originally described a syrup made from coca leaves and kola nuts, because the name came to signify a trademark for a soft drink rather than a description of the product’s characteristics. A generic term, however, may not be a protected trademark even if an extensive advertising campaign or a long period of exclusive use has caused consumers to recognize the term as a brand name for a particular seller of the product. This heightens the importance of the decision whether a term is merely descriptive (which means that it can become a protected trademark for the product it describes by earning secondary meaning) or is generic (which means it cannot become a protected trademark for the product it describes). The statute doesn’t define the terms “generic” or “descriptive,” or give much guidance about how to tell the difference. The courts have adopted a variety of rules of thumb, but the rules are neither consistent nor predictable.
The Patent and Trademark Office is responsible for registering trademarks and service marks. The office has long taken the position that top-level domain names like “.com” or “.org” serve no independent source-designating function, but instead tell consumers where to find an entity on the internet. PTO practice is to deny trademark registration to purported marks that combine the generic name for the class or category of a product with the suffix “.com.” The PTO rule follows an 1888 Supreme Court case, Goodyear’s India Rubber Glove v. Goodyear Rubber Co., which held that combining a generic term with a corporate designation such as “Company” or “Inc.” did not create a protectable trademark. The U.S. Courts of Appeals for the Federal Circuit and the 9th Circuit have agreed, upholding the PTO’s refusal to register HOTELS.COM for hotel information and reservation services, ADVERTISING.COM for online advertising services and MATTRESS.COM for online bedding sales.
In 2012, Booking.com SV applied to register BOOKING.COM as a service mark for online hotel reservation services. The PTO determined that “booking” is the generic term for hotel reservation services. In reaching that conclusion, the PTO consulted dictionary definitions of the terms “booking” and “.com,” reviewed the use of the term “booking” by numerous websites to refer to reservation services and looked at domain names and trade names used by third parties. It denied registration on the ground that combining a generic term like “booking” with a generic top-level domain name like “.com” merely communicates to consumers that the business offers online hotel reservations.
Booking.com sought review of the denial of registration in the U.S. District Court for the Eastern District of Virginia. The court agreed with the PTO that the term “booking” is generic as applied to hotel reservation services. The court concluded, however, that combining the generic term “booking” with the top-level domain name “.com” results in a term that is merely descriptive rather than generic. The combination would therefore be registrable if Booking.com could show that consumers recognize the term as a specific brand. Booking.com introduced survey evidence that tended to show that a majority of consumers recognize BOOKING.COM as a brand name rather than a product category. The district court held that the survey evidence and evidence of Booking.com’s substantial advertising expenditures sufficed to make that showing. A divided U.S. Court of Appeals for the 4th Circuit affirmed.
In the Supreme Court, the PTO makes two major arguments. The first argument relies on the 1888 Goodyear case. If, as the lower courts recognized, “booking” is a generic term for hotel reservation services, Goodyear makes clear that Booking.com could not register “Booking Company” as a mark for its services. The same principle applies to the addition of “.com,” which conveys only that the company operates a commercial website via the internet. Booking.com’s survey evidence doesn’t change that result. Just as a survey showing that many consumers associate “Booking Company” or “Booking Inc.” with a particular entity would not render those terms federally registrable as trademarks, Booking.com’s survey evidence provides no basis for allowing federal registration of BOOKING.COM.
The PTO’s second argument is that the competition and consumer protection policies underlying the rule that generic terms may not be trademarks support its refusal to register the mark. The distinction between the law’s treatment of generic terms and its treatment of merely descriptive terms ensures that a generic term cannot be monopolized, even by a business that devotes substantial resources to persuading consumers that a generic term represents its particular brand. The lower court’s decision would permit businesses to monopolize language by registering generic terms as domain names, and then to use their trademark rights to preclude competitors from calling their products by their ordinary names.
Booking.com argues that Goodyear is no longer good law because the Lanham Act, enacted in 1946, superseded it. The statute (as amended in 1984) says that in deciding whether a formerly valid trademark has become generic, courts and the PTO should determine the primary significance of the term to the relevant public. Booking.com argues that this test is equally appropriate for deciding whether a term is generic or merely descriptive as an initial matter, and that consumer surveys are the best way to assess a term’s primary significance to consumers. Applying the primary-significance test would advance the Lanham Act’s objectives by enabling the owners of marks to take action to prevent consumer confusion whenever consumers understand a term to be a trademark or service mark, and by rewarding businesses for making investments in their brands. Booking.com claims that its survey evidence proves that the public recognizes BOOKING.COM as a brand name rather than a product category. Therefore, Booking.com argues, the term should be deemed to be descriptive rather than generic. The company’s brief includes a long list of registered trademarks and service marks that it argues would be subject to cancellation under the rule that the PTO applied to its application.
Booking.com doesn’t challenge the conclusion that “booking” is generic for its services. The PTO doesn’t contest the lower court’s conclusion that if BOOKING.COM is properly treated as a descriptive term rather than a generic one, Booking.com’s advertising expenditures and survey evidence would suffice to show secondary meaning. So the case will come down to the question on which the court granted certiorari: “Whether, when the Lanham Act states generic terms may not be registered as trademarks, the addition by an online business of a generic top-level domain (“.com”) to an otherwise generic term can create a protectable trademark.” In answering that question, the Supreme Court is expected to articulate a test for distinguishing generic from descriptive terms, and to approve or discard the longstanding rule that a generic term cannot be protected as a trademark for the product even if the applicant has some evidence that consumers perceive the term as a brand name.
Recommended Citation: Jessica Litman, Argument preview: Is “Booking.com” generic for online hotel reservation services?, SCOTUSblog (Mar. 16, 2020, 10:03 AM), https://www.scotusblog.com/2020/03/argument-preview-is-booking-com-generic-for-online-hotel-reservation-services/