The Supreme Court Endorses Federal Trademark Registration of “Booking.com”

On June 30, 2020, the Supreme Court decided United States Patent and Trademark Office v. Booking.com B.V., finding that Booking.com’s company name is entitled to federal trademark protection, even though the generic term “booking” alone is not. This highly anticipated ruling significantly expands the scope of federal trademark protection for domain names. In an 8-1 decision written by Justice Ginsburg, the Court held that the combination of “.com” with a generic and otherwise unregistrable term creates a federally protectable trademark if consumers associate the mark with a particular company or product. We previously discussed the oral arguments in this case, which the Court heard remotely by phone for the first time in history. In this post, we discuss the Court’s ruling and highlight the important implications for current and future trademark and domain name owners.  

The Decision

The question before the Court was whether a “generic.com” term is eligible for federal trademark registration. As we previously discussed, the U.S. Patent and Trademark Office (“PTO”) argued unequivocally no and urged the Court to adopt a per se rule that generic words, which name a class of goods or services (e.g., “booking” or “wine”), combined with “.com” are ineligible for registration regardless of consumer perception. On the other hand, Booking.com argued that consumer perception should dictate the determination of whether a mark is either generic and unregistrable or descriptive and registrable only upon showing that consumers identify the mark with a single brand.  

Ultimately, the Court rejected the PTO’s categorical rule and opted for a flexible, fact-intensive standard based solely on consumer perception. Specifically, it stated that a term styled “generic.com” is an unregistrable generic name for a class of goods or services only if the term has that meaning to consumers. Because the parties did not contest the lower court’s ruling that the public does not understand “Booking.com” to signify online hotel reservation services as a class, the Court held that the term is nongeneric and thus eligible for trademark registration.

In rejecting the PTO’s position, the Court flagged two flaws in its argument. The first was the PTO’s misplaced reliance on an 1888 Supreme Court case, Goodyear’s India Rubber Glove Manufacturing Co. v. Goodyear Rubber Co., which held that a corporate designation, like “company,” added to a generic term does not confer trademark eligibility. Unlike “generic company” terms, “generic.com” combinations can convey to consumers a source-identifying characteristic—an association with a particular business’s website—given that only one entity can hold a specific domain name at a time. The Court reasoned that the exclusivity of “generic.com” terms sets them apart from generic terms with corporate designations. Second, the Court found the PTO’s position unsupported by trademark policy. It rebuffed the PTO’s concern that registration will inhibit competitors from using the word “booking” or adopting similar domain names, such as “ebooking.com.” Because of the difficulty of proving infringement of descriptive marks under the likelihood of confusion analysis and the shield from liability afforded to users of those marks under the fair use doctrine, the Court concluded that the anticompetitive effects identified by the PTO are adequately addressed. A final noteworthy point made by the Court was that the PTO’s past practices are inconsistent with its per se rule and accepting that rule would result in cancellation of many “generic.com” marks that are currently registered, like DATING.COM and ART.COM. 

Justice Sotomayor filed a brief concurring opinion. She agreed with the Court’s decision but made two additional points. First, she clarified that consumer survey evidence, which may be unreliable, should not be the “be-all and end-all” in assessing genericness. Second, Sotomayor noted that the PTO may have accurately found that “Booking.com” is generic based on dictionary and usage evidence, and thus the district court’s contrary ruling is erroneous, but that this issue was not before the Court.

Justice Breyer was the sole dissenter. He sided with the PTO, endorsing its categorical rule as consistent with established trademark principles. In Breyer’s view, a “generic.com” term ordinarily yields no protectable trademark because it conveys only that the owner operates a website related to the item, not any source-identifying information entitling it to registration. He took a critical view of the majority’s genericness standard, specifically the variety of evidence supposedly informing this analysis, such as consumer surveys, dictionaries and usage by consumers and competitors. Given the unlikelihood that consumers refer to a particular class of online merchants as “generic.coms” (e.g., calling Travelocity a “Booking.com”) and that such terms appear in dictionaries, in most cases this inquiry will depend primarily on survey evidence. Consumer surveys, Breyer argued, are of little value in the context of domain name marks—since only one entity uses a particular domain name at a time, it is easy to generate a survey that concludes that consumers associate that domain with a specific business. He also raised concerns about the anticompetitive effects of registration in that it will allow “generic.com” trademark owners to prohibit competitors from not only using similar domain names but from enjoying the competitive advantages of operating under an easy-to-remember generic business name. And Breyer dismissed the majority’s reliance on the infringement doctrines, arguing that the threat of costly litigation will undoubtedly chill many from using variants of the registered mark.

The Implications

While the Court was careful to clarify that it “do[es] not embrace a rule automatically classifying such terms as nongeneric,” the decision is a clear win for brand owners, especially existing companies with generic business names and a strong online presence. However, the implications for their competitors, especially newer entrants and those with limited budgets, may not be as bright. There is a genuine concern, as recognized by Justice Breyer, that owners of “generic.com” trademarks will have a “monopoly over a zone of useful, easy-to-remember domains,” making it difficult for competitors to effectively compete. Competitors should be aware that using the term or adopting a similar domain name could now be a costly decision. Trademark litigation is expensive and time consuming, especially when concerning the likelihood of confusion analysis or fair use doctrine, which are fact-intensive questions difficult to resolve prior to trial.

In addition, the Court’s ruling will likely lead to a surge of trademark applications for “generic.com” marks as well as generic words paired with other top-level domain names, such as “.edu” and “.org.” One noteworthy type of new applicant may include businesses that previously operated under an unregistrable generic name but since this ruling have rebranded themselves as a “.com” in an effort to obtain trademark protection. This decision may also open the door to registration of marks comprising other terms or symbols, such as hashtags. Currently, the PTO’s Trademark Manual of Examining Procedure specifies that simply adding the word “hashtag” or the symbol “#” to an otherwise unregistrable mark, like a generic term, does not render it registerable. A mark containing “#” or “hashtag” is only registrable as a trademark if it functions as an identifier of the source of the applicant’s goods or services. Applications for marks such as “Hashtag Clothing” have been denied on the basis that “hashtag” serves no source-indicating function. But, if brand owners prove that consumers view “#generic” or “hashtag generic” as referencing a particular company, they may now be able to obtain registration. However, unlike domain names, multiple entities can use the same hashtag simultaneously so it would be difficult for an applicant to prove consumer recognition by exclusive use alone. In Booking.com, the Court suggested that consumers may perceive “generic.coms” as conveying a source-identifying characteristic because of this particular exclusiveness feature of the domain name system.

Overall, the Court’s decision is important for clarifying the standard for determining genericness, but its limited discussion on the application of this standard leaves many unanswered questions that the PTO and lower courts will need to address. One such question concerns how evidence of a mark’s significance to consumers will be analyzed and weighed. As the Court emphasized, this ruling does not automatically convey trademark rights to applicants of “generic.com” marks. Brand owners will still have to prove that consumers recognize their mark as a source identifier rather than just a generic or descriptive term for the goods or services offered thereunder. In addition, if federal registration is obtained, the value of such registration is still up for debate. The PTO will bear the burden of deciding the exclusivity of a generic term in a “generic.com” mark as applied to a particular applicant. One way or another, this will significantly impact an owner’s ability to enforce a “generic.com” mark against competitors using a similar mark. We will have to wait to see how this plays out during the examination process at the PTO and with the lower courts.

If you have any questions about the implications of this decision or potential rights you may have to a “generic.com” domain name, please contact us at jeannette@lutzker.com.