U.S. Patent and Trademark Office v. Booking.com

United States Patent and Trademark Office, et al. v. Booking.com B. V. is a U.S. Supreme Court case that overturned the PTO's long-held rule that a generic term plus a generic TLD identifier such as ".com" was still a generic term, and thus ineligible for federal trademark registration.

Background

Whether registered or not, trademarks signify the source of goods or services. For that reason, terms that are merely descriptive of the goods and services ("Lovely Topiaries") or that describe a generic class of goods and services ("arborist") are not eligible for federal protection, on the grounds that they do not indicate a distinctive source of goods and services. Descriptive and generic marks are denied registration under the Trademark Manual of Examining Procedure.

The application for the phrase "booking.com" was initially filed in 2012. The examining attorney initially rejected the application, stating that it was "merely descriptive" of the goods and services offered by the company. Booking.com responded to the office action with supplemental information intended to overcome the "merely descriptive" hurdle. While that effort succeeded, the examining attorney then rejected the application on the basis that the term was generic:

Thus, applicant’s claim of acquired distinctiveness under Section 2(f) is insufficient to overcome the refusal because no amount of purported proof that a generic mark has acquired secondary meaning can transform it into a registrable trademark or service mark. See 15 U.S.C. §1052(f); In re Bongrain Int’l Corp., 894 F.2d 1316, 1317 n.4, 13 USPQ2d 1727, 1728 n.4 (Fed. Cir. 1990); H. Marvin Ginn Corp. v. Int’l Ass’n of Fire Chiefs, Inc., 782 F.2d 987, 989, 228 USPQ 528, 530 (Fed. Cir. 1986); TMEP §1212.02(i). Such a designation cannot become a trademark or service mark under any circumstances. The applied-for mark is generic because it consists of the generic wording “BOOKING”, combined with the top-level domain (TLD) “.COM.” See In re 1800Mattress.com IP, LLC, 586 F.3d 1359, 1364, 92 USPQ2d 1682, 1685 (Fed. Cir. 2009). Because a TLD generally serves no source-indicating function, adding it to an otherwise unregistrable mark typically does not render the mark registrable. See In re 1800Mattress.com IP, LLC, 586 F.3d at 1364, 92 USPQ2d at 1685; In re Hotels.com, LP, 573 F.3d 1300, 1301, 1304, 91 USPQ2d 1532, 1533, 1535 (Fed. Cir. 2009); In re CyberFinancial.Net Inc., 65 USPQ2d 1789, 1792-94 (TTAB 2002); cf. In re Steelbuilding.com, 415 F.3d 1293, 1297, 75 USPQ2d 1420, 1422 (Fed. Cir. 2005) (“Only in rare instances will the addition of a TLD indicator to a descriptive [or generic] term operate to create a distinctive mark.”); TMEP §§1209.03(m), 1215.05.

The office issued a final rejection in November 2013, and issued a refusal of Booking.com's request for reconsideration in July 2014. Booking.com appealed the PTO's decision to the U.S. District Court for the Eastern District of Virginia. Appeal to the courts presented Booking.com with an opportunity to present evidence that was out of scope with the PTO application process. Based largely on new evidence presenting consumer awareness surveys regarding the recognition of "booking.com" as representative of a specific company and service at a specific location on the Internet, the District Court ruled that "booking.com" was not generic, and that it had "acquired secondary meaning as to hotel-reservation services." The PTO appealed only the ruling that "booking.com" was not generic. The Fourth Circuit Court of Appeals affirmed the District Court's opinion, and certiorari was granted by the U.S. Supreme Court in 2019.

Opinion of the Court

The Court summarized the PTO's argument in this case:

In the PTO’s view, which the dissent embraces, when a generic term is combined with a generic top-level domain like “.com,” the resulting combination is generic. In other words, every “generic.com” term is generic according to the PTO, absent exceptional circumstances.

Notably, the PTO's sole example of an "exceptional circumstance" was the practice of domain hacking-style "wordplay" like "tennis.net." The Court, in an 8-1 decision, "decline[d] to adopt a rule essentially excluding registration of 'generic.com' marks. As explained below, we discern no support for the PTO’s current view in trademark law or policy." The Court noted that the PTO's own practice was not consistent - "art.com" is a registered mark, and "dating.com" is on the supplemental register.

The Court's holding specifies a rule for "generic.com" mark might succeed in proving that it had moved into the realm of distinctive:

While we reject the rule proffered by the PTO that “generic.com” terms are generic names, we do not embrace a rule automatically classifying such terms as nongeneric. Whether any given “generic.com” term is generic, we hold, 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.

In a footnote to that holding, the Court identified the following types of evidence as germane to that inquiry: "Evidence informing that inquiry can include not only consumer surveys, but also dictionaries, usage by consumers and competitors, and any other source of evidence bearing on how consumers perceive a term’s meaning." In her concurring opinion, Justice Sotomayor emphasized that surveys may not be the most reliable evidence of distinctiveness. However, because the issue was not before the Court, she declined to assess the sufficiency of Booking.com's survey evidence, presented to and accepted by the District Court.

The Court concluded:

The PTO challenges the judgment below on a sole ground: It urges that, as a rule, combining a generic term with “.com” yields a generic composite. For the above-stated reasons, we decline a rule of that order, one that would largely disallow registration of “generic.com” terms and open the door to cancellation of scores of currently registered marks. Accordingly, the judgment of the Court of Appeals for the Fourth Circuit regarding eligibility for trademark registration is Affirmed.

Booking.com's application for the phrase "booking.com" was duly registered.

Implications

Commentators noted that the decision has wide-reaching implications for trademark law in the context of domains. SCOTUSblog summarized the implications for brands and trademark practitioners:

Today’s decision significantly expands the availability of trademark protection for domain names, and limits the number of terms that will be deemed unprotectable because they are generic. The court did not explicitly discard the rule that generic words cannot be made into trademarks by persuading consumers to perceive them as trademarks, but it is difficult to see how that rule can be reconciled with the court’s rationale. Moreover, despite Sotomayor’s qualifications, it seems likely that the decision will make surveys even more essential in trademark litigation, and will encourage their use in the registration context as well.

Practitioners noted that the Court offered no threshold or guidelines regarding what amount or quality of evidence would need to be presented, and that the PTO would likely issue restrictive guidance based on the ruling. Nonetheless, it was also clear that the ruling marked an opportunity for brands:

Now is the time for any company with a “.com” name to reassess brand strategy. With the right evidence of acquired distinctiveness, federal trademark protection is available. In fact, the Court’s opinion has already opened the door for a new wave of “.com” marks. As of recent count, nearly 200 “.com” applications have already been filed since the Court’s June 30 opinion.

USPTO Guidance

In response to the ruling, the PTO issued new guidance for generic.com trademark applications in October 2020. As expected by practitioners, the guidance makes it clear that the bar will remain high for "generic.com" applicants to establish that the term is non-generic:

Under Booking.com, generic.com terms are neither per se generic, nor per se non-generic. However, given the nature of these terms, the available evidence will likely support a conclusion that they are, at least, highly descriptive, and thus consumers would be less likely to believe that they indicate source in any party. Thus, for generic.com terms, applicants will generally have a greater evidentiary burden to establish that the proposed mark has acquired distinctiveness.

If the examining attorney, who must "continue to assess on a case-by-case basis whether, based on the evidence of record, consumers would perceive a generic.com term as the name of a class of goods and/or services or, instead, as at least capable of serving as a source indicator," determines that an applied-for term is in fact generic, that determination must be rebutted by a "significant amount of actual evidence that the generic.com term has acquired distinctiveness in the minds of consumers." The guide refers to the existing Trademark Manual of Examining Procedure sections on "Establishing Distinctiveness by Actual Evidence" Although the door is now open for such applications, an applicant for a generic.com word mark can still expect a stringent review against existing TMEP standards and expectations.