On July 23, 2009, the US Court of Appeals for the Federal Circuit affirmed a decision by the US Patent and Trademark Office (PTO) to refuse registration for the mark HOTELS.COM. See In re Hotels.com, L.P., __ F.3d __, 2009 WL 2183269 (Fed. Cir. July 23, 2009).  

The Federal Circuit agreed with the PTO’s Trademark Trial and Appeal Board that HOTELS.COM is a generic term for providing information about temporary lodging and making reservations for temporary lodging. The generic label means that the HOTELS.COM trademark is ineligible for federal registration for those services. The court found the mark to be generic despite a consumer survey showing that 76 percent of respondents understood the mark to be a brand name rather than a common term.

According to both the Federal Circuit and the Trademark Trial and Appeal Board, the addition of the “dot-com” merely refers to Internet commerce and does not convert the generic term “hotels” into a brand name. According to the court, the composite term HOTELS.COM communicates no more than the common meanings of the individual components, that is, that Hotels.com operates a commercial Web site that provides information about hotels but adds nothing as an indication of source.

The finding might surprise consumers who are inundated with millions of dollars in advertising for the HOTELS.COM Web site every year and who no doubt understand that the mark HOTELS.COM refers to a specific Web site and single provider of hotel reservation services. According to the court and the PTO, millions of dollars in advertising and high consumer recognition cannot turn generic terms (as opposed to terms considered merely descriptive or suggestive) into protectable trademarks. They are allegedly incapable of indicating source (despite the fact that HOTELS.COM appears to do just that).

In an earlier case involving the HOTELS.COM logo, Hotels.com argued that because no two entities can register the same domain name, each domain name is unique and necessarily indicates only one source. The PTO rejected that argument based on the fact that it is possible that numerous entities could wholly incorporate HOTELS.COM into their own domain names – 123-HOTELS.COM, ALL-HOTELS.COM, MY-DISCOUNT-HOTELS.COM, etc. Trademark law gives the owner of a trademark registration the exclusive right to use the registered mark in commerce with the goods and services listed in the registration. If Hotels.com were given the exclusive right to use HOTELS.COM with hotel reservation services, the argument goes, then competitors could be prohibited from using HOTELS.COM in their own domain names.
 
Owners of generic domain names are thus faced with a challenge. Because of the common words in their domain names, they could have very high traffic, and that traffic can be boosted with large advertising expenditures. But is the investment worth it if the domain name owners cannot stop competitors from using similar domain names and profiting from consumer confusion?

Hotels.com has not been wholly unsuccessful. It has managed to register the HOTELS.COM mark for other services, including travel information and reservation services, as well as its familiar bellhop logo:

Owners of descriptive marks and generic domain names must adopt creative strategies to build brand equity and stop competitors from profiting unfairly from consumer confusion. The Arent Fox trademark team has significant experience developing such strategies and helping clients with challenging marks, in the United States and around the world. If you face similar challenges, please contact us.

N. Christopher Norton
norton.christopher@arentfox.com
202.715.8411