Locke Lord QuickStudy: Supreme Court Holds that Booking.com Isn’t Generic

In U.S. Patent and Trademark Office v. Booking.com B.V., the Supreme Court held that a term that combines a generic word with “.com” is not generic if consumers perceive the term to signify the source of a product and thus can be eligible for federal trademark registration.

Background

The digital travel reservation company Booking.com B.V. sought to register the mark “Booking.com” for online hotel-reservation services. The U.S. Patent and Trademark Office (“PTO”) refused registration of the term on the ground that “Booking.com” is generic for the relevant services because “booking” means making travel reservations and “.com” merely signifies a commercial website.

Booking.com appealed and submitted new evidence demonstrating that consumers perceived “Booking.com” as a mark and not a generic term. The District Court sided with Booking.com, finding that unlike “booking,” consumers understand that “Booking.com” describes travel reservation services that are available at that domain name. The District Court further concluded that Booking.com’s marks have acquired distinctiveness (a prerequisite for registering a descriptive mark). The PTO appealed the finding that “Booking.com” is not generic. The Fourth Circuit Court of Appeals affirmed and the PTO appealed to the Supreme Court.

Supreme Court Decision

The PTO urged the Supreme Court to adopt a firm rule that, when a generic term is combined with a generic top-level domain name (e.g., “.com”) the resulting combination is generic. "In other words, every ‘generic.com’ term is generic according to the PTO.” The PTO specifically posited that adding “.com” to a generic term was like adding “Company” to the name of a business. “Company” conveys no additional meaning that would distinguish one provider’s services—from those of another. In support of this conclusion, the PTO cited an 1888 Supreme Court decision where the Court held that a generic corporate designation, i.e., “Company,” does not confer trademark eligibility when added to a generic term.¹ Finally, the PTO warned of anti-competitive consequences if Booking.com prevailed because Booking.com will be able to stop others from using “booking” to describe competing travel reservation services.

Justice Ginsburg, writing for an 8-1 majority, declined to adopt the PTO's "unyielding legal rule." The Court noted that Goodyear is inapt because, unlike the “Generic Company” term in Goodyear, the “Generic.com” term “might also convey to consumers a source-identifying characteristic: an association with a particular website.” The Court also noted that the PTO’s proposed rule “entirely disregards consumer perception.” The Court concludes: “Whether any given ‘generic.com’ term is generic, we hold, depends 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.” Finally, the Court disputed the parade of horribles that the PTO argued will befall competitors if Booking.com obtained a registration, noting that “trademark law hems in the scope of [weak] marks short of denying trademark protection altogether,” such as providing weak marks a narrower scope of protection and shielding from liability certain instances of fair use. The dissent, penned by Justice Breyer, largely adopts the PTO’s reasoning, and warns that in practice the majority’s “fact-specific approach” will bestow automatic trademark eligibility for every “generic.com” domain name because it will be impossible to find evidence that consumers literally refer to the relevant class of online merchants as “generic.com.”

Takeaways

• Survey Measuring Consumer Perception Important. Justice Sotomayor (concurring) and Justice Breyer both noted that consumer-survey evidence "may be an unreliable indicator of genericness." Yet, the majority, like the lower courts, relied heavily on Booking.com’s survey evidence showing that consumers perceived “Booking.com” as a mark. This underscores the importance of submitting survey evidence when seeking registered protection for a highly descriptive or arguably generic term. The PTO rarely has the resources to submit its own survey, so applicants have the upper hand because they can submit uncontradicted surveys. The PTO may of course challenge the design or questions of a survey, but it is unlikely that the PTO will submit affirmative survey evidence.
• Domain Names Important. The ownership of a “generic.com” domain name appears to be more important than ever. Companies that own those domain names would be smart to start building secondary meaning by connecting the domain name with its specific goods or services. This could be difficult because the land rush on domain names started years ago and a markowner may have a difficult time enforcing its rights against companies that have co-existed for years.
• No Bright Line Rule. The Supreme Court has rejected a few recent attempts to provide bright- line rules for specific trademark issues. For example, in B&B Hardware, Inc. v. Hargis Industries, Inc.², the Court declined to adopt a rule that forced district courts to apply issue preclusion when the Trademark Trial and Appeal Board (TTAB) decided a similar case. Rather, the Court held that courts must give preclusive effect to TTAB decisions if the ordinary elements of issue preclusion are met. Similarly, in Romag Fasteners Inc. v. Fossil Inc.³, the Court unanimously overruled the requirement that a plaintiff in a trademark infringement suit must show that a defendant willfully infringed the plaintiff’s trademark as a precondition to an award of profits. In Booking.com, the Court again refused to adopt a bright-line rule, choosing instead a factual inquiry, which is similar to the fact-based approaches of prior decisions.