On May 4, 2020, for the first time in history, the Supreme Court heard oral arguments through a telephone conference call in United States Patent and Trademark Office v. Booking.com B.V. The Court considered whether the online hotel reservation company, Booking.com, is entitled to federal trademark registration for its company name or whether simply adding “.com” to an otherwise generic term fails to create a protectable trademark under the Lanham Act. Typically, generic terms, which are words that identify a group or class of goods or services as opposed to a specific thing, are not registrable as trademarks. For this reason, the United States Patent and Trademark Office (“USPTO”) denied Booking.com’s trademark registration application, concluding that “booking” is a generic term. But the District Court reversed, and the Fourth Circuit later affirmed, holding that BOOKING.COM is not generic and is a potentially registrable trademark.
To determine whether a term is generic, courts apply the “primary significance” test, which is mandated by the Lanham Act, and ask whether consumers mainly view the term as referring to a category of goods or services. Generic terms are distinguished from descriptive terms that describe the characteristics of a product or service. Descriptive terms may qualify for trademark protection if they acquire “secondary meaning” in that consumers identify the mark with a single brand. In this case, the parties do not dispute that “booking” is a generic term for travel reservation services. Rather, they disagree as to whether the combined term “BOOKING.COM” is also generic.
The USPTO, represented by Erica L. Ross, argued that BOOKING.COM is not a registrable trademark because the addition of “.com” does not change the nature of the generic term. In urging for the adoption of this categorical rule, the government relied primarily on an 1888 Supreme Court case, Goodyear’s India Rubber Glove Manufacturing Co. v. Goodyear Rubber Co., that was decided before the passage of the Lanham Act and held that the addition of an entity designation like “Inc.” to a generic term does not make it registrable. Many of the Justices expressed reluctance about accepting the government’s categorical rule. For instance, Chief Justice Roberts questioned why the Court should rely on its 19th century decision rather than the express language of the Lanham Act, and Justices Kagan and Gorsuch asked Ross to propose an alternative test assuming the bright-line rule was rejected. On the other side of the argument, Lisa Blatt, on behalf of Booking.com, argued that the statutorily-mandated primary significance test should apply to assess whether “generic.com” marks are registrable. According to Blatt, the Lanham Act forecloses the government’s categorical rule by prescribing the primary significance test for genericness, which requires consideration of how consumers view a particular mark. Several Justices questioned whether, in light of its exclusive ownership rights to its domain name, affording additional protection to Booking.com through trademark registration would allow it to monopolize the generic term to the detriment of competitors. Justices, such as Justice Ginsburg, also expressed doubts that trademark rights were even necessary to protect Booking.com’s investment in its domain name when it could rely on unfair competition law.
In addition to the novel format of the proceedings, the case itself is noteworthy because it marks the first time the Court heard arguments on generic terms since the enactment of the Lanham Act in 1946. Now, the Court faces the difficult task of determining whether either of the two arguably outdated, pre-internet standards should apply in the modern digital age. Based on their line of questioning, some of the Justices are clearly uncomfortable applying an 1888 Supreme Court decision and a pre-internet-era statute to this case. Additionally, the Court’s decision must address the competing interests of domain name ownership and trademark rights. A business has a legitimate interest in 1) securing a domain name to solidify its online presence and establish consumer recognition and 2) obtaining trademark registration to protect its brand and prevent consumer confusion. But there is an undeniable, and arguably unfair, commercial advantage to receiving both through trademark registration of a “generic.com” term. Moreover, in reaching a decision, the Court must also consider the precedent its ruling will set for other “generic.com” companies. While there is a significant commercial advantage to securing a “generic.com” domain name, the tradeoff has always been that trademark protection is not available. Up until now, businesses had to choose between two compelling commercial advantages—a generic domain name or trademark registration of a distinctive, non-generic term. If Booking.com prevails and the Court adopts a flexible test, a business may be bestowed an unearned monopoly over an otherwise generic term simply by adding “.com.” This arguably conflicts with the underlying goal of trademark law, which is to protect consumers and encourage competition, not reward originators of marks.
While the outcome of this case is especially hard to predict, the tone of the questioning by most of the Justices suggests the Court may not adopt a bright-line rule. Instead, the Court may settle on a middle ground allowing for a case-by-case determination of the registrability of a generic term as used within a domain name. Such a precedent could encourage competition online while giving certain early adopters of a “generic.com” mark a distinct competitive advantage. What is clear is that the Court’s decision will likely have significant implications for current and future trademark and domain name owners. We’ll be waiting for the Court’s ruling and advising clients when the Booking.com decision is published next month.