The Consumer is King: High Court Sides with Booking.com, Rejecting Per Se Test for Generic.Com Trademarks
“If ‘Booking.com’ were generic, we might expect consumers to understand Travelocity—another such service—to be a ‘Booking.com.’ We might similarly expect that a consumer, searching for a trusted source of online hotel-reservation services, could ask a frequent traveler to name her favorite ‘Booking.com’ provider. Consumers do not in fact perceive the term ‘Booking.com’ that way, the courts below determined.” – SCOTUS decision in Booking.com
The U.S. Supreme Court has sided with Booking.com, ruling that a generic term paired with .com “is a generic name for a class of goods or services only if the term has that meaning to consumers.” The opinion was delivered by Justice Ginsburg and joined by eight members of the Court, with Justice Breyer dissenting and Justice Sotomayor filing a separate concurring opinion.
In the Booking.com case, the U.S. Patent and Trademark Office (USPTO) was urging the High Court to reverse a judgment of the U.S. Court of Appeals for the Fourth Circuit that held BOOKING.COM to be a registrable trademark. Booking.com argued that “under the Lanham Act, the consumer is king,” and the fact that survey evidence has proven 74.8% of relevant consumers to consider BOOKING.COM a brand, rather than a generic name, “should end this case.” Booking.com also said that the “primary significance test”—showing the primary significance of the mark to the relevant public—rather than the Federal Circuit’s precedent in Goodyear Co. v. Goodyear Rubber Co.—which held that “the addition of commercial indicators such as ‘Company’ to terms that merely describe classes of goods could not be trademarked”—should govern how to distinguish between descriptive and generic names, and under the primary significance test, BOOKING.COM is a registerable trademark.
The USPTO had countered that the Fourth Circuit’s ruling was contrary to “established principles of trademark law, and conflicts with decisions of the Federal and Ninth Circuits, the only other courts of appeals that have considered the protectability of ‘generic.com’ terms.” The Office pointed to Federal Circuit decisions finding marks such as “HOTELS.COM” and “LAWYERS.COM” not protectable “based on highly similar evidence” to the Booking.com case.
But the Supreme Court ultimately found that the genericness analysis should turn on consumer perception, rather than a “per se rule” against trademark protection for a generic.com term. The Court explained:
If “Booking.com” were generic, we might expect consumers to understand Travelocity—another such service—to be a “Booking.com.” We might similarly expect that a consumer, searching for a trusted source of online hotel-reservation services, could ask a frequent traveler to name her favorite “Booking.com” provider. Consumers do not in fact perceive the term “Booking.com” that way, the courts below determined. The PTO no longer disputes that determination….
According to the PTO, adding “.com” to a generic term—like adding “Company”—can convey no source-identifying meaning. That premise is faulty, for only one entity can occupy a particular Internet domain name at a time, so a “generic.com” term could convey to consumers an association with a particular website. Moreover, an unyielding legal rule that entirely disregards consumer perception is incompatible with a bedrock principle of the Lanham Act: The generic (or nongeneric) character of a particular term depends on its meaning to consumers, i.e., do consumers in fact perceive the term as the name of a class or, instead, as a term capable of distinguishing among members of the class.
The combination of consumer survey evidence and “sources such as ‘dictionaries, usage by consumers and competitors, and any other source of evidence bearing on how consumers perceive a term’s meaning’ may also inform whether a mark is generic or descriptive,” said Justice Sotomayor in her short concurring opinion. Sotomayor was addressing Justice Breyer’s dissenting opinion that “survey evidence has limited probative value in this context.” Breyer argued that Goodyear should prevail, and that:
By making such terms eligible for trademark protection, I fear that today’s decision will lead to a proliferation of “generic.com” marks, granting their owners a monopoly over a zone of useful, easy-to-remember domains. This result would tend to inhibit, rather than to promote, free competition in online commerce.
But David Bernstein of Debevoise & Plimpton, who filed a brief for Booking.com as co-counsel, along with Jonathan Moskin of Foley& Lardner and Lisa Blatt of Williams & Connolly, told IPWatchdog that he rejects such “Chicken Little” views that the sky is falling and that Breyer’s concerns are “overblown”.
“It’s not going to open the floodgates,” said Bernstein. “It’s simply a common-sense decision that reaffirms that consumer perception is the key. I still trust the trademark office and the courts to make the appropriate decision.”
Bernstein also said he was not surprised by Sotomayor’s concurrence, as she was an IP litigator herself. Sotomayor may have been seeking to quell fears that the ruling will result in a flood of generic.com registrations by reiterating that the analysis will still ultimately turn on the facts of a particular case. While people may disagree about whether Booking.com is generic, that was not the question before the Court, said Sotomayor.
Bernstein said the ruling is a victory for brands whose trademark rights have been in limbo or at risk while this question remained unresolved:
The Supreme Court has confirmed what millions of consumers have known for years – Booking.com is a brand name, not simply a web address. In a 8-1 decision written by Justice Ginsburg, the Court confirmed that the consumer is king when it comes to brand names, and if consumers perceive a term to be a brand name and not merely a generic or descriptive reference, then that name is entitled to trademark protection. This decision is a victory for countless brand owners that have invested significant resources in building their brands – such as Weather.com, Law.com, Wine.com and Hotels.com, as well as others like Home Depot, Salesforce, TV Guide, Pizza Hut, and The Container Store – whose trademarks, the Court acknowledged, would have been at risk if the government’s position was accepted.
Here’s what some other trademark practitioners had to say of today’s decision:
T.J. Mantooth, Hall Estill
“Trademark eligibility has been turned on its head with the Supreme Court’s support of the primary significance test to determine trademark eligibility. A potential race to the courthouse to file a trademark application has been created for any website that can show significance to the relevant consumer. This decision may end up being one step forward and two steps backward as the U.S. Trademark Office transitions to evaluating trademark applications based on the primary significance test to determine trademark eligibility. The power has shifted with the Booking.com decision allowing evidence of public perception to determine trademark eligibility of a word or term. The Court has indicated that the addition of ‘.com’ to a term can alter the trademark eligibility of the term, which could muddy the waters of website domain names significantly.”
Fara Sunderji, Dorsey & Whitney
“The Court got it right – the public perceives booking.com as a trademark instead of generic term and so it can be registered as a trademark. Quoting the Lanham Act, the Court noted, ‘Eligibility for registration, all agree, turns on the mark’s capacity to ‘distinguis[h]’ goods ‘in commerce.’ In the short term, we may see more generic.com trademark applications filed by brand owners that end up on the Supplemental Register. You will likely need a survey showing the public’s perception of a trademark in order to get a registration on the Principal Register.
Smartly, the Court dismissed the PTO exaggerated concerns about overzealous enforcement against similar domains like ebooking.com by noting that weaker marks have a smaller scope of protection. This has always been the case when a brand owner chooses to use a descriptive mark as opposed to a fanciful or arbitrary mark.”
Mitchell Stein, Sullivan & Worcester
“This is a sensible result and accords with what is likely a widespread understanding that ‘Booking.com’ refers to a specific company, and therefore functions as a brand name. The majority’s decision pivoted in part on its reasoning that, unlike ‘Inc.’ or ‘Co.’, the fact that only one company can control a domain name using a specific word or arrangement of words with ‘.com’ favors a finding that consumers will identify the domain name site with a specific company, even if the domain name uses a word that would otherwise be considered generic for the services provided at the website. This reasoning stood on its head the Trademark Office’s arguments that ‘monopoly’ granted to Booking.com by virtue of registering its domain name should abrogate the need for Booking.com to have a trademark registration as well. Likewise, the majority expressed little concern for the potential anticompetitive effects of granting Booking.com trademark rights in the domain name, noting that the risks of monopolization and the availability of defenses against infringement claims brought by Booking.com would be no different than for when any other marks are registered.”
“The court demonstrated an understanding that trademark law is designed to protect consumers from confusion, versus a property right owned by the inventor as in patent law. Thus, consumer perception and understanding is necessary when determining the scope of protection to which a purported mark is entitled.
Monica Riva Talley, Sterne, Kessler, Goldstein & Fox
This case will likely impact the way people choose brands going forward, and provides a roadmap for protecting less inherently distinctive brands. This decision will also likely be viewed as positive from the marketing community, who often favor brands on the descriptive end of the spectrum as they typically require less effort to educate consumers on the nature of the offering. On the other hand, it may lead to increased litigation costs for enforcing such brands, necessitating the employ of consumer surveys to gauge consumer perception.
Daniel Frohling, Loeb & Loeb
“The Court provides important certainty to marketers and practitioners by rejecting a near per se rule that all “generic.com” marks are generic and by confirming the established touchstone that each mark’s primary significance to the relevant public determines whether or not it is generic.
Critically, however, in limiting its decision to this narrow question, the Court leaves open the pivotal question of how particular evidence regarding a mark’s significance should be analyzed and weighted. As both Justice Sotomayor’s concurrence and Justice Breyer’s dissent intimate, this will not necessarily be simple and straightforward and is bound to lead to future appeals.”
Hope Hamilton, Holland & Hart
“The Supreme Court’s decision was predictably narrow – namely, there is no per se rule that Generic.com marks are, on whole, generic.
I sense that some practitioners may try to bootstrap today’s opinion to try to extend trademark rights to generic terms that have become source identifiers over time, but that were undeniably generic when first adopted. I read nothing in today’s opinion that overrules the long-established principal that no amount of proffered evidence can rescue a generic mark – and Footnote 3 of the majority’s opinion seems to expressly disclaim any attempt to decide that issue.
Our ‘best practices’ tip remains the same: Choose a distinctive mark and avoid descriptive marks. Your rights will be stronger and easier to enforce.”
Alan Behr, Phillips Nizer
“Interestingly, the owner of the mark BOOKING.COM admitted in oral argument before the court that it is a ‘weak mark,’ but the court found it to be a mark just the same. In my experience, marketers are rarely daunted by legal evaluations of the relative strength of marks. If a marketer loves a mark, whether it is as strong as titanium or as weak as tissue paper, he or she will usually go for it and let the law follow along as best it knows how. In this case, the law did just that.
What the case likely means is that there can be no automatic rejection of an application to register a mark that is simply a combination of a generic term such as ‘booking’ and a familiar top-level domain extension such as ‘.com.’ It does not, however, mean that any such combination would necessarily be registered as a trademark. That is, you cannot take any generic term and add “.com” to it and say you definitely have a registrable mark for any goods or services. Each case would still need to be examined on its own merits. The Supreme Court noted, for example, that ART.COM is already registered as a trademark but did not make a new rule that all such combinations are automatically registrable. What the case signifies is that, in the Internet age, top-level domain extensions, when added to generic terms might well create registrable marks. And that is news—an important clarification from the Supreme Court of how old law applies to the new tricks of electronic commerce.”
Maureen Beacom Gorman, Marshall Gerstein
“The dissenting opinion, arising from Justice Breyer’ sole dissenting voice, argues that today’s decision will have a chilling anti-competitive effect arising from a proliferation of generic.com trademarks that will silence competition through monopolies arising from useful and easy to remember domain names, and enforcement of expensive litigation tactics.
Indeed, the practical effect of legally protecting trademark rights in generic.com terms might be, as Justice Breyer fears, monopolies arising from useful and easy to remember domain names. However, the Court’s protection conceptually of generic.com terms as trademarks is consistent with historical trademark protection of unique geographic designations that are used as trademarks and acquire trademark significance in the eye of the consumer. Generic.com terms are cyber “street addresses.” As such, the Court is appropriately treating such terms as trademark law and policy has historically treated geographic terms – specific geographic locations can function as trademarks.”
Eric T. Fingerhut, Dykema
“My hope following this decision, though certainly not an expectation, is the PTO will realize it is in the business of registering marks rather than denying them. Moreover, I hope the PTO will make its examination practices more consistent and stop sending Office Actions indicating that Examining Attorneys are not bound by past practices of the Trademark Office. Trademark lawyers need to be able to advise their clients but the current and often inconsistent practice of the PTO on all sorts of important issues such as distinctiveness and likelihood of confusion makes doing so very difficult.
This decision reminds me that original Generic.com brands such as Drugstore.com and Beauty.com were effectively cheated from obtaining federal registration. This is a good decision for those Generic.com brands that continue to exist. They can now file for federal registration and if they have been using for five or more years they would likely have a presumption of acquired distinctiveness. What were formerly thought of as generic domain names (e.g., shoes.com, vitamins.com, etc.…..) just became a lot more valuable. I think this is a good day for owners of Generic.com brands and domainers sitting on stockpiles of generic domain names.”
Following today’s decision, the BOOKING.COM mark will be published in the USPTO’s Official Gazette and should ultimately be registered.
This article was updated with additional industry reactions on 6/30/2020.