The Supreme Court held June 30, 2020, in United States Patent and Trademark Office v. Booking.com B.V., that a generic term combined with a generic internet-domain suffix is not per se ineligible for trademark registration.
The Court held that consumer perception of the relevant public is the correct inquiry in determining whether a mark serves as an indication of source to consumers. Therefore, if consumers perceive a term to identify the source of the goods and services, the term may be registered as a trademark, even if it is comprised of otherwise generic parts.
Booking.com B.V. applied to register four marks in connection with travel-related services. Each mark had different visual features, but all contained the term “BOOKING.COM.” The USPTO examining attorney and the USPTO’s Trademark Trial and Appeal Board concluded that the term BOOKING.COM was generic for the travel-related services and thereby ineligible for federal registration. Booking.com B.V. sought review in the U.S. District Court for the Eastern District of Virginia and submitted new evidence, in particular, a survey showing that a majority of the surveyed consumers perceived BOOKING.COM as a mark, i.e., as source indicator for the services, and not as a generic name for internet travel booking services. Emphasizing that the USPTO failed to prove that the public uses “booking.com” to refer to a class or type of service, the district court ruled that “booking.com” was descriptive rather than generic and could, therefore, be registered upon proof of secondary meaning. The district court also credited a Teflon survey that demonstrated 74.8 percent of the consumers understood booking.com as a brand name rather than a generic term. The district court rejected the USPTO’s contention that the survey was irrelevant because “booking” was generic and adding “.com” was no different than adding “Inc.” or “Company.” Accordingly, the district court held that BOOKING.COM was not generic. The USPTO then appealed to the Fourth Circuit Court of Appeals, which affirmed the decision of the district court.
On appeal, the USPTO argued that the combination of a generic term and generic Internet-domain suffix cannot function as a mark as a matter of law, relying almost entirely on Goodyear’s India Rubber Glove Mfg. Co. v. Goodyear Rubber Co., 128 U.S. 598 (1888), which ruled that the combination of an unprotectable term (in that case “Goodyear Rubber”) and a generic corporate designation could not be protected as a trademark. In short, adding “company” or “Inc.” to an unprotectable term did not make the combination protectable as a trademark. Relying on the Goodyear case, the USPTO argued to the Supreme Court that adding the top-level domain “.com” to an otherwise unprotectable term (in this case “booking”) was the internet equivalent of adding “company,” and, accordingly, that registration should be refused.
In rejecting this argument, Justice Ruth Bader Ginsburg explained that a generic corporate designation was not the same as a generic internet-domain suffix because a “GENERIC.COM” term might convey to consumers a single source in a way that “company” or “Inc.” does not. Having rejected a per se rule, Justice Ginsburg emphasized the paramount importance of consumer perception, rejecting the USPTO’s reliance on the principle that survey or other evidence of consumer perception was irrelevant if the mark was generic, observing, “[t]hat principle presupposes that a term is generic.”
In reaching its decision, the Supreme Court balanced the risk that a brand owner might use a federal registration for a combination of generic terms to create a monopoly against the risk that a per se rule prohibiting protection for such marks would ignore consumer perception that such marks were brand names. Rather than adopt a per se rule, the Court held that each mark must be evaluated individually because a “bedrock principle of the Lanham Act” is that consumer perception of a mark is the key inquiry. The Court concluded that that there are other mechanisms in place—specifically, narrowing the scope of protection based on the strength (or, in this case, weakness) of the mark—to remedy a potential abuse of the system by the registrant of a mark such as BOOKING.COM.
Permitting the registration of generic terms with generic Internet-domain suffixes opens the possibility of more registrations, while potentially increasing the financial lure of cybersquatting, in the future. To obtain trademark protection for such a term, it will be critical for a brand owner to advertise and promote its brand in a manner that leads consumers to perceive the term as a trademark and not merely as an internet address or class of goods or services. Ultimately, proving how consumers perceive such a mark will likely require a strong consumer survey as well as thoughtful trademark enforcement efforts along the way.
Copyright © 2020 by Ballard Spahr LLP.
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