Posternak Blankstein & Lund LLP is now Arent Fox. Read the press release

Supreme Court Holds First of Its Kind Hearing To Decide: Can BOOKING.COM Be a Protectable Trademark?

In a first of its kind event, on May 4, 2020, the Supreme Court heard arguments-by-telephone, complete with apparent unintentional uses of the mute button, a pitfall many Americans can relate to as of late. The case is between the US Patent and Trademark Office (PTO) and Booking.com B.V. (BBV), the travel website that claims to be “the world’s #1 choice for booking accommodations.” With oral arguments out of the way, the Court’s task now is to decide whether the addition by an online business of a generic top-level domain (e.g., .com) to an otherwise generic term (e.g., booking) can create a protectable trademark.

Procedural Background

The case involves BBV’s claimed ownership of the trademark BOOKING.COM, and its attempts to secure four separate federal trademark registrations for BOOKING.COM and stylized versions thereof in connection with “online hotel registration services.” In the United States, though, a generic term is never entitled to trademark protection, nor registration. As such, the PTO denied BBV’s applications, finding that “booking” is generic for the reservation services; that “.com” is generic for online services; and that the combination of the two terms does not create a protectable mark.[1] The TTAB affirmed the PTO’s rejections, finding consumers would understand the “primary significance” of Booking.com as an online reservation service for lodgings generally.

BBV appealed to the United States District Court for the Eastern District of Virginia, which reversed the TTAB. Specifically, although the district court noted that “by itself, the word ‘booking’ is generic,” it found the addition of “.com” made a difference because a unique domain name “is generally a descriptive mark.” Having concluded that BOOKING.COM is descriptive for hotel-reservation services, and not generic, the district court went on to find that evidence introduced by BBV established that the BOOKING.COM mark had acquired secondary meaning.[2] As such, the district court determined that BOOKING.COM is entitled to registration because consumers associate it specifically with BBV.

At the next level of appeal, the Court of Appeals for the Fourth Circuit affirmed the district court’s decision. Importantly, the Fourth Circuit applied the “primary significance test,” which asks what the primary significance of the mark is to the relevant consuming public—if it is to indicate the nature of the class of product or services to which the mark related, that implies the mark is generic; if it is to indicate the source or brand, that implies the mark is not generic.[3] Applying that test here, the Fourth Circuit found that BOOKING.COM, taken as a whole, is not generic because the relevant public would primarily understand the term to indicate BBV. In its analysis, the Fourth Circuit acknowledged that the survey evidence introduced by BBV persuasively showed a majority of the public identifies BOOKING.COM as a source-identifying brand, and also noted “the PTO’s lack of evidence demonstrating that the public uses ‘BOOKING.COM’ generically.” The Fourth Circuit further rejected the PTO’s primary reliance on Goodyear’s India Rubber Glove Manufacturing Co. v. Goodyear Rubber Co., 128 U.S. 598 (1888)—a case where the Supreme Court held the addition of an entity designation like “Company” to a generic term cannot create a protectable trademark—stating that “Goodyear was decided almost sixty years before the Lanham Act and, crucially, did not apply the primary significance test.”

The Supreme Court Hearing

Monday afternoon’s televised hearing presented the Supreme Court its first opportunity to poke holes in both BBV’s and the PTO’s arguments.[4] In attempting to do so, the justices lodged their respective questions in an order-of-seniority manner, contrary to the typical fire-at-will format.

The PTO’s Main Arguments

The PTO’s position comprised two general themes. First, the PTO proffered that the per se rule mandated by the Goodyear Court also applies to this situation, in that the addition of “.com” is the on-line equivalent of “Company” or “Inc.” and therefore BOOKING.COM can never be a protectable, or registrable, trademark. Second, the PTO stressed that registration of BOOKING.COM as a trademark would be anticompetitive, as it would give BBV federal presumptions of rights that it could use to try to restrict otherwise permissible third-party use of the wording (e.g., domain names that incorporate the wording “BOOKING.COM,” such as Airfarebooking.com or Ebooking.com).

Chief Justice Roberts began the charge against the PTO, questioning whether the 150-year-old Goodyear holding still applied, particularly where the Lanham Act (which was enacted much more recently than the Goodyear decision) purportedly codifies that the primary significance of the mark shall be the test for determining whether the mark has become generic. Justice Alito went one step further, asking if even the Lanham Act, which was enacted during a pre-internet era, was ill-suited to apply to the current Internet age. Justice Ginsburg questioned the repercussions of a per se rule prescribing that the addition of “.com” can’t make a generic term non-generic; namely, the extent of registrations on the Principal Register that would then be subject to cancellation, and whether the PTO would then seek to cancel such registrations. And Justice Thomas honed in on other marks that had been found registrable by the PTO, such as 1-800 and 1-888 phone-number marks. As to those marks, however, the PTO noted a key distinguishing factor—unlike a character-limited 1-800 phone-number, a domain name like Booking.com can be encapsulated within longer domain names (such as Ebooking.com), exemplifying the PTO’s anti-competition concerns here.

Justices Kagan and Gorsuch seemingly tried to ascertain the type of rule the PTO would want the Court to promulgate if not for a per se rule mandating that “[generic].com” domains could never be protectable trademarks. In response, the PTO ostensibly suggested an “adjusted” likelihood of confusion test (the test for infringement) that would take into account the uniqueness of a domain name (i.e., that there is and can only be one registrant per domain name). That is, if Booking.com“gets trademark protection because it’s unique”, then a domain name accused as infringing, such as Ebooking.com, “should get equal protection because it, too, is unique.”

BBV’s Main Arguments

BBV’s argument, on the other hand, was that the primary significance test, and not Goodyear, controls the Court’s analysis for three reasons: (1) the Lanham Act mandates the test; (2) the Lanham Act overturned the Supreme Court’s decision in Goodyear; and (3) the primary significance test furthers the Lanham Act’s purported purpose of letting consumers decide what deserves trademark protection. Further, as the Fourth Circuit determined, the evidence established that the primary significance of the BOOKING.COM mark was in indicating BBV.

It was pretty clear that the overarching concern of the justices was regarding the risk of monopolization if BOOKING.COM became a registered trademark. For example, Chief Justice Roberts referenced domains such as Ebooking.com, Hotelbooking.com, Eurobookings.com, and Travelbooking.com, asking whether registration of Booking.com would impede use of these domains. Justice Alito cautioned the scope of any such trademark rights that may be instilled to Booking.com, first essentially asking BBV what other trademark applications it would oppose, and second declaring that BBV was “seeking a degree of monopoly power that no one could have had prior to the Internet age.” Justice Kagan went as far as to ask, bluntly, “[w]ho would you sue?” In that regard, BBV admitted that it would not object use of a trademark that simply made a slight variation of Booking.com, as long as it wasn’t someone seeking to freeride off the goodwill built in BOOKING.COM mark. Even so, BBV admitted, “it would be very hard to bring that lawsuit. Very hard.” 

Outside of monopolization concerns, Justices Ginsberg and Breyer questioned why BBV’s goals couldn’t be achieved through unfair competition law, as opposed to trademark law. BBV in response advocated that it deserves the same rights that are afforded to other travel agencies with registered trademarks, including by being allowed to file in rem civil actions against domain names that have committed cybercrimes. Indeed, this benefit of registration, and not filing trademark infringement lawsuits, was seemingly portrayed as the most important aspect of trademark registration for BBV—it does not like “Internet scams and cyber scams stealing its business and ruining its reputation.” Justice Sotomayor’s questioning also included her own apprehension—would a holding in BBV’s favor also require that the PTO run its own consumer perception surveys before deciding that any term is generic? According to BBV, though, there was no reason for this concern, as the PTO has been applying the primary significance tests for many years relying on all types of evidence other than surveys, and resulting in the registration of other .com marks without incident.

Closing Thoughts

In sum, the main driving factor of the case will be whether the century-old Goodyear decision controls the show, thereby mandating a per se rule that prohibits Generic.com domains from ever obtaining trademark protection. Or rather, whether the primary significance test governs, requiring an analysis of how the public views the use of the terms as a whole. While it appears that only the former will result in a win for the PTO in terms of registration, it is also possible that the Court’s voiced concerns about possible monopolization will drive it to explicitly limit the scope of such Generic.com registrations, including perhaps with a fine-tuned likelihood of confusion analysis to be specifically applied to Generic.com trademarks. Regardless, one thing is clear—the Supreme Court’s decision in this case will impact how the PTO and businesses evaluate the descriptiveness and genericness of marks generally, and in turn, may impact how much businesses are willing to spend to purchase domain names consisting of generic terms.  Existing owners of allegedly generic “.com” trademark registrations will also eagerly await the Court’s decision, keeping in mind Justice Ginsberg’s concerns.

 

[1] The Examiner initially had refused BBV’s applications on descriptiveness grounds, finding the Booking.com marks were merely descriptive for the applied-for services. In response, BBV produced evidence purporting to show Booking.com had acquired distinctiveness, to which the Examiner then deemed Booking.com generic and refused registration.

[2] Notably, BBV introduced for the first time at the district court level a “Teflon survey,” which purported to show that 74.8 percent of surveyed consumers identified Booking.com as a trademark identifying BBV.

[3] Although the Lanham Act codifies the primary significance test as the test for determining whether a registered trademark has become generic in cancellation of registration proceedings, (15 U.S.C. § 1064(3)), the Fourth Circuit noted that the primary significance test had also been applied by itself and the Federal Circuit to determine genericness in registration proceedings. 

[4] Notably, of the 15 amicus briefs that were filed, only one was in support of the PTO; 12 were in support of BBV, and two supported neither party.

Contacts

Continue Reading