The Wall Street Journal heralded the Supreme Court’s decision in the Booking.com case with the headline “Supreme Court Eases Trademark Rules for Websites.” (United States Patent and Trademark Office et. al. v. Booking.com B.V., decision by J. Ginsburg.) The Court “gave online companies broad latitude to trademark their website names,” it proclaimed as an opener to its article on July 1, 2020. Not so fast.
The decision only establishes that there is no per se rule against federal trademark registration of a domain name that consists of a generic term plus a top-level domain (TLD) like .com (or .org, .net, .biz, etc.) An applicant still needs to prove that the primary significance to the public of the mark taken as a whole is as a designator of the source of specific products or services. In this case, the Court held that the mark Booking.com is entitled to registration because the public perceives it as designating a particular source of online hotel reservation services, rather than referring to a class of online hotel reservation services for which there might be many different providers.
This is not necessarily a burden that every website company can sustain. Surveys about consumer perception of marks are tricky to design and expensive to boot. Justice Breyer observed in his dissent that consumer-survey evidence “may be an unreliable indicator of genericness.” As Justice Sotomayor wrote in her concurrence: “Flaws in a specific survey design, or weaknesses inherent in consumer surveys generally, may limit the probative values of surveys in determining whether a particular mark is descriptive or generic in this context.”
How Does an Online Provider Prove that Its Choice of a Generic type Name has Taken on Trademark Significance?
Online companies will have to tred carefully to successfully assert that their marks comprised of a generic.com domain name warrant trademark registration. How likely are they to succeed? That will depend on the evidence they can marshall.
The adequacy of the evidence submitted by Booking.com B.V., the Dutch company that operates the website www.booking.com, was not at issue before the Supreme Court. In a new trial at the Eastern District of Virginia after appealing a refusal to register by the Trademark Trial and Appeal Board (TTAB), the company submitted a consumer survey that showed that approximately 74% of 400 people who took part in a structured inquiry known as a Teflon survey thought that Booking.com was a brand, rather than a generic term for a class of services. The finding was accepted by the district court judge as evidence that the mark was more than merely descriptive and certainly not generic. The appellate court majority did not find any error by the lower court’s assessment of consumer perception of BOOKING.com. Only dissenting Judge Wynn of the Fourth Circuit found fault with the district court’s presumption that a mark comprised of a generic term and a TLD would usually be descriptive, rather than generic. At the Supreme Court, the majority endorsed the finding that consumers perceive BOOKING.com to be an identifier of a particular online hotel reservation service. But the majority also cautioned that neither is there an automatic rule classifying marks in the form of generic.com as registrable. “Whether any given ‘generic.com’ mark is generic,” wrote Justice Ginsburg, “depends on whether consumers in fact perceive that term as the name of a class or, instead, as a term capable of distinguishing among members of the class.”
An amicus brief submitted by a group of researchers and consultants who specialize in measuring consumer perceptions of trademarks argued the view espoused by the leading trademark treatise (McCarthy on Trademarks and Unfair Competition) that the primary significance of a mark can be established by the views of a majority of consumers participating in a survey. Only a simple majority is needed. This is different from requirements to meet a consumer test for likelihood of confusion, where even a low measure of confusion, like 25-30% of respondents, can be enough to find infringement.
But is the Teflon inquiry the appropriate test for this question?
The USPTO had argued at the Fourth Circuit that the Teflon test was designed to measure consumer understanding of when marks that start out as brands become so widely used to denominate products that they wind up as generic. These are the brands of yesterday that have entered the lexicon: ESCALATORS, THERMOS, and NYLON, to name a few. They lost their ability to designate the source of a product because they became the name of the thing itself. The public stopped thinking of them as brands. Law students learn that they suffered “genericide.” Marks for novel products run the risk of just this sort of death by too much public affection. If all moving staircases become known as ESCALATORS, then the term no longer can identify the producer/source of that innovation.
The USPTO had argued below that the Teflon test was not the appropriate analysis where a mark begins life as generic.com and takes on new meaning over the course of time as the source of services, thanks to assertive advertising. This attack was not supported by the Fourth Circuit and seems to have fallen by the wayside at the Supreme Court. Rather, the Court embraced the importance of the primary significance to consumers as the measure by which to assess whether a mark is generic or not. The Teflon test, it seemed to say, measured just what was needed, regardless of the lifecycle stage of a mark.
The USPTO also argued unsuccessfully that the primary significance test which is set out in the trademark law in the section dealing with cancellations should not apply when the issue is registrability of a mark. The Supreme Court dispensed with that distinction in its wide embrace of the importance of establishing the primary significance of marks to the public as a hallmark of the Lanham Act system.
What Does the Public Understand about Domain Name Addresses?
Another prickly point: domain name addresses by their nature are singular. Only one domain name registrant can be assigned a specific domain name by the international domain name registration system administered by ICANN. After more than twenty-five years of experience with the Internet, the public is presumed to understand this. Does that taint consumer perception of the primary significance of a mark displayed in the form of generic.com? In other words, do most people “get” that there can be only one owner of a domain name like booking.com or cars.com or wines.com? An amicus brief by Trademark Scholars cited by the Court in a footnote worried that consumers may conflate the fact that domain names are exclusive in the sense of having a unique address with a conclusion that a given generic.com term has achieved secondary meaning and has risen above its generic origins. Regrettably, that question did not form part of the consumer survey submitted in evidence and was not before the Court; the USPTO had not contested the district court’s finding of consumer perception. But the question is a good one and should be further explored by research by competent and disinterested social scientists.
Are Merely Descriptive and Generic Marks Now the Same where a TLD is added?
Other unanswered questions: Does this case effectively collapse the distinction between merely descriptive and generic marks when marks are in a .TLD form? Merely descriptive marks are registrable if they have acquired distinctiveness, also known as “secondary meaning.” Previously, generic marks were never registrable, even in the form of a compound mark where the additional term like “Company” or “Inc.” was itself an empty signifier. If a mark in the form of “generic.com” can be registrable because it has come to be perceived as a designator of source (i.e., it has acquired distinctiveness), what becomes of these two distinct categories in the trademark hierarchy of distinctiveness? Is there any longer a different rule for descriptive vs. generic marks when a TLD is attached to the term?
Lost in the news coverage and analysis is that Booking.com B.V. already owned several other USPTO registrations for BOOKING.com in various fonts and colors. The familiar chubby blue mark as used on the company’s website was registered, as were other versions of the mark. (See my previous blog on the case.) The company was hardly deprived of its ability to enforce its marks as actually used against those who adopted a confusingly similar mark for the same or related hotel reservation services. What it lacked was the ability to enforce plain “booking.com” in the context of disputes about domain names, because BOOKING.com had been held unregistrable by the USPTO. Counsel for Booking.com B.V. said as much in her oral argument before the Court. A trademark registration for plain BOOKING.com provides very weak protection in the trademark system, given the extreme descriptiveness of the term “booking.” But a registration will enable her client to prevail in disputes brought under the Uniform Dispute Resolution Policy (UDRP) administered by WIPO’s Arbitration and Mediation Center and other designated alternative mediation centers.
Domain name disputes focus only on the words registered, and not on colors or other features that play a role in distinguishing trademarks. A trademark owner who complains under the UDPR that another entity is cybersquatting or engaging in fraudulent activity under a domain name must show proof of its rights in the mark as incorporated into the accused domain name. A trademark registration is just such proof. A lack of registration can doom a UDRP complaint. This point was made forcefully in the amicus brief filed by the self-styled Coalition of .com Brand Owners comprising the owners of websites like CARS.com, JERKY.com, BACKGROUNDCHECKS.com, FRANCHISE.com and WINE.com. Justice Breyer argued in his dissent that owners like these who choose to register obvious terms as domain names in the form of generic.com enjoy an unfair “first mover” advantage in appropriating “a particularly valuable piece of online real estate.” Granting them trademark protection later when they have most profited from this appropriation only enshrines their monopoly over a term that competitors should be able to use to describe their own goods or services, he argued.
What Next for Generic.com Marks?
Following the Supreme Court decision, USPTO will have no further grounds to refuse to register BOOKING.com. Once that registration is in hand, it remains to be seen whether Booking.com B.V. will institute a series of domain name challenges under the UDRP against .com domain registrations that include the term “booking” for related services. We will also be on the lookout to see whether Justice Breyer’s forecast of a proliferation of generic.com registrations at the USPTO will come to pass. One thing is for sure: the USPTO will be applying the consumer perception test from now on to applications to register generic.com marks. It will be up to applicants to supply the necessary evidence to meet this standard. That won’t necessarily be easy. Online companies expecting the “broad latitude” announced by the Wall Street Journal to achieve trademark protection for obvious website names will find they still have significant hurdles to surmount.