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Patent and Trademark Office v. Booking.com B. V.
Citations: 140 S. Ct. 2298; 207 L. Ed. 2d 738Docket: 19-46
Court: Supreme Court of the United States; June 30, 2020; Federal Supreme Court; Federal Appellate Court
Original Court Document: View Document
A generic name, which refers to a class of products or services, is not eligible for federal trademark registration. In the case of Booking.com, which sought registration for its name, the U.S. Patent and Trademark Office (PTO) initially denied the request, arguing that "Booking.com" is generic for online hotel-reservation services. However, the District Court found that "Booking.com" is not perceived as generic by consumers, a decision upheld by the Court of Appeals. The appellate court rejected the PTO’s argument that combining a generic term with a ".com" suffix inherently results in a generic name. The ruling establishes that a "generic.com" term is only considered generic if consumers understand it as such. The courts determined that consumers do not view "Booking.com" as a generic term, leading to the conclusion that it is not generic. The PTO's proposal for a nearly automatic rule asserting that combinations of generic terms with ".com" are generic lacks support in trademark law and does not align with consumer perception principles outlined in the Lanham Act. The PTO's concerns regarding potential monopolization by trademark registration were addressed, highlighting existing legal doctrines that prevent such monopolies. The PTO's arguments against the necessity of trademark protection for "generic.com" brands were also countered, asserting that competitive advantages do not automatically disqualify a mark from registration. Ultimately, the ruling clarifies that consumer perception is crucial in determining a term's generic status. The Supreme Court case, United States Patent and Trademark Office v. Booking.com B.V., addressed the eligibility for federal trademark registration of the term "Booking.com." The U.S. Patent and Trademark Office (PTO) denied registration, arguing that "Booking.com" is generic for online hotel-reservation services, asserting a broader rule that any combination of a generic term and ".com" is also generic. The Court, led by Justice Ginsburg, rejected this expansive interpretation, stating that a term classified as "generic.com" is not inherently generic unless consumers perceive it as such. The lower courts found that consumers do not view "Booking.com" as a generic term for the service it offers, thus allowing for potential federal trademark registration. The opinion elaborated on the purpose of trademark law, emphasizing the importance of distinguishing goods and services and the benefits of federal registration under the Lanham Act, which offers various protections to trademark owners. The ruling highlights that even terms with generic components can achieve trademark status if they do not signify a class of goods or services to consumers. To qualify for registration, a mark must distinguish the applicant's goods from those of others. The supplemental register is for marks that can distinguish goods or services. Distinctiveness is categorized on a scale: (1) generic, (2) descriptive, (3) suggestive, (4) arbitrary, and (5) fanciful. More distinctive marks are eligible for the principal register, while descriptive marks need to achieve acquired distinctiveness, or secondary meaning, to qualify. Without secondary meaning, descriptive terms can only go on the supplemental register. Generic terms, which cannot distinguish goods, are generally ineligible for trademark protection. In the case of "Booking.com," the U.S. Patent and Trademark Office (PTO) deemed it generic for travel-related services, as "booking" refers to making reservations and ".com" indicates an online service. The PTO's Trademark Trial and Appeal Board ruled similarly, stating that consumers would see "Booking.com" primarily as an online reservation service. However, the U.S. District Court for the Eastern District of Virginia reviewed new evidence from Booking.com and concluded that "Booking.com" is not generic but rather descriptive of its services. The court found that it has acquired secondary meaning specifically for hotel-reservation services, thus meeting the distinctiveness requirement for registration. The PTO appealed the District Court's ruling that "Booking.com" is not a generic term. The Fourth Circuit Court of Appeals upheld the District Court's decision, agreeing that the term is perceived by consumers as non-generic. The appeals court dismissed the PTO's argument that combining a generic term with ".com" inherently results in a generic term. Judge Wynn dissented, arguing that the District Court incorrectly assumed that "generic.com" terms are generally descriptive rather than generic. The Supreme Court granted certiorari and affirmed the Fourth Circuit's ruling. Key principles established include: (1) a "generic" term identifies a class of goods or services rather than a specific feature; (2) the distinctiveness of a compound term is assessed as a whole; (3) the relevant meaning is determined by consumer perception. The eligibility for trademark registration hinges on whether a term distinguishes goods in commerce. The PTO contends that the primary significance test for determining if a mark has become generic does not apply outside the cancellation context. Ultimately, whether "Booking.com" is generic depends on consumer perception of the term as signifying online hotel-reservation services. The courts found that consumers do not perceive "Booking.com" as a generic term, and the PTO has not contested this finding. The PTO's position advocating for a near-per-se rule declaring "Booking.com" generic, based solely on its structure, was rejected. Confining the primary-significance test would disrupt the consistent understanding among Courts of Appeals and the PTO’s guidelines regarding the registrability of trademarks. Current case law and the PTO’s manual suggest that this test is uniformly applied. The case at hand does not require a determination of whether one meaning is "primary," as consumer perception defines a term's meaning. The PTO claims that any "generic.com" term should be considered generic unless exceptional circumstances exist, but this view lacks support in trademark law and could jeopardize existing registrations that contradict this rule. The PTO cites a historical case, Goodyear’s India Rubber Glove Mfg. Co. v. Goodyear Rubber Co., to argue that adding a generic corporate designation to a generic term does not confer trademark eligibility. However, the addition of ".com" to a generic term may offer consumers an association with a specific website, which provides a source-identifying characteristic. Thus, the argument that "generic.com" is akin to "Generic Company" is flawed, as it overlooks the unique nature of domain names and their implications for consumer perception. Domain names that include "generic.com" terms are unique and often recognized by the public as linked to specific businesses. This exclusivity distinguishes them from generic business names like "Wine, Inc." The PTO's assertion that "generic.com" terms can only denote a class of goods or services is challenged, as it overlooks consumer perception, which is fundamental to determining if a term is generic under the Lanham Act. The PTO's reliance on the Goodyear case is questioned, as it misinterprets the ruling to imply that "Generic Company" terms are inherently ineligible for trademark protection, ignoring how consumers perceive these terms. The PTO's argument suggests that granting trademark protection to terms like "Booking.com" would impede competition. However, the concern centers not on the exclusive use of "Booking.com" but on the potential restriction of the term "booking" and similar phrases by competitors. Trademark law aims to balance protection with competition, ensuring that terms are not overly restricted while still preventing consumer confusion. Courts assess the likelihood of confusion based on a mark's distinctiveness; weaker marks face fewer infringements due to the common usage of descriptive terms. In crowded markets, consumers have learned to differentiate between similar marks, and the classic fair use doctrine allows others to use descriptive terms in a non-trademark manner without liability. The excerpt addresses the legal considerations surrounding the trademark registration of "Booking.com" under 15 U.S.C. § 1115(b)(4) and relevant case law. The U.S. Patent and Trademark Office (PTO) highlights concerns about anticompetitive effects related to trademark registration, asserting that granting a trademark for "Booking.com" would not create a monopoly on the term "booking." Booking.com acknowledges that its mark is "weak" and descriptive, making it more challenging to prove likelihood of confusion with other marks. It accepts that close variations are unlikely to infringe on its trademark and that competitors can still use "booking" descriptively. The PTO argues that Booking.com already possesses significant competitive advantages due to its unique domain name, which consumers readily associate with its services. However, the excerpt notes that while descriptive marks can be easily linked to services, they are still eligible for federal registration under the Lanham Act. The PTO's assertion that the exclusive association of a domain name with its owner renders it generic is contested, suggesting that such a connection actually supports the need for trademark protection. The excerpt emphasizes that even if "Booking.com" is considered generic, unfair competition laws would still provide some protection against misrepresentation, although federal trademark registration would offer stronger safeguards and benefits. The PTO's primary contention is that combining a generic term with ".com" results in a generic composite, a position that the Court ultimately rejects, affirming the Fourth Circuit's ruling that "generic.com" terms can qualify for trademark registration. Justice Sotomayor concurs, noting that there is no established rule against such trademark protection, aligning with the PTO's historical treatment of similar terms. Consumer-survey evidence may not reliably indicate whether a trademark is generic, as flaws in survey design can limit their probative value. However, surveys are not the sole determiner of a term's status; dictionaries, consumer and competitor usage, and other evidence can provide insight into whether a mark is generic or descriptive. The PTO may have justifiably concluded that "Booking.com" is generic based on such evidence, contrary to the District Court's decision, although this issue is not currently before the Court. The dissenting opinion emphasizes that trademark law does not protect generic terms, which merely describe a product or service, to maintain the linguistic commons and allow all producers to use necessary terms. The Court's ruling that adding ".com" to a generic term creates a protectable trademark is viewed as inconsistent with trademark principles and policies. Trademark law distinguishes between various categories of terms, with the first four being eligible for federal registration: fanciful, arbitrary, and suggestive terms, all of which are inherently distinctive. Descriptive terms convey immediate information about a product's features and characteristics but are less protected under trademark law. The overall goal of trademark law is to promote competition and facilitate commerce. A descriptive term can only be trademarked if it has acquired "secondary meaning," indicating public association with a specific company or product. Generic terms, like "wine" or "haircuts," merely describe a type of product and are not eligible for trademark protection, even if they have become associated with a particular user. This is to prevent monopolizing common terms, which would restrict competitors from accurately describing their goods. Distinguishing between generic and descriptive terms can be challenging, especially when combining multiple generic terms. Courts assess whether the combined terms convey a unique meaning that individual terms lack; if not, the compound is considered generic. Adding a corporate designation to a generic name does not create a protectable trademark, as it merely indicates a business association without granting exclusive rights to the term. The Lanham Act expanded protections to descriptive marks with secondary meaning but did not alter the principle that generic terms cannot be trademarked, maintaining the precedent set by earlier cases like Goodyear. Congress is presumed not to have overturned common-law principles without explicit indication. The continued validity of the Goodyear principle is recognized by various legal authorities, including the TTAB, PTO, and leading legal treatises. The Goodyear principle asserts that corporate designations like "Company," "Corp," and "Inc." do not distinguish a firm's goods or services, meaning that adding such terms does not transform a generic name into a trademark. This case examines the application of these principles to internet domain names, specifically the term "Booking.com," which consists of the generic term "booking" and the top-level domain ".com." The central issue is whether "generic.com" terms are inherently generic. It is argued that appending ".com" to a generic term does not add distinguishing characteristics; instead, it merely signifies a website associated with that term. Therefore, "Booking.com" does not qualify for trademark registration, as it conveys that the owner operates a website related to booking services, akin to how "wine.com" indicates a website dealing with wine. The combination of "booking" and ".com" does not provide unique identification but reflects the generic nature of the service offered. Courts typically disregard the top-level domain when assessing the likelihood of confusion in domain names, treating phrases like “Booking.com” as entirely generic. The essence of such domain names is equivalent to that of their second-level domains, implying that combinations of generic terms with “.com” do not create distinct meanings beyond their individual components. Exceptions exist only in rare instances where the interaction between the top-level and second-level domains produces a unique meaning. The discussion also notes that newly expanded top-level domains (e.g., .guru, .club) may convey specific characteristics of the associated websites, but this does not apply to “Booking.com,” which remains generic in nature. The majority's position is considered flawed as it suggests that the unique ownership of a domain name implies a specific association, which does not alter the generic nature of terms. Examples, such as “Wine, Inc.” or “The Wine Company,” illustrate that generic terms can imply specific entities without losing their generic status. The notion that consumers do not refer to “Booking.com” in a generic sense does not negate its classification as generic, similar to how “Wine, Inc.” remains generic despite not being a common term used for wine sellers. The text argues that terms indicating the nature of a business should remain available for public use, reinforcing that “Booking.com” signifies only a booking website and should not be granted trademark protection. The analysis concludes that distinguishing between descriptive and generic “generic.com” marks is unlikely to yield consistent evidence across cases. The majority opinion distinguishes this case from Goodyear by asserting that only one entity can own the rights to a domain name at any given time, a principle applicable to all “generic.com” cases. The determination of trademark eligibility for “generic.com” domains often relies on survey evidence, which is typically limited in its probative value. Consumer surveys primarily assess whether a term is associated with a single source, but a generic term can still achieve such an association due to market exclusivity or significant investment in branding. Despite strong evidence of association, it does not negate the generic nature of a term. Some courts and the Trademark Trial and Appeal Board (TTAB) have deemed survey evidence largely ineffective in distinguishing between generic and descriptive terms. In the dissent, Justice Breyer critiques the reliance on survey results, highlighting a specific case where 74.8% of participants identified “Booking.com” as a brand, contrasting with perceptions of “Washingmachine.com.” He argues that the difference in consumer perception is likely due to previous exposure to “Booking.com” rather than the inherent descriptiveness of the term itself. This suggests that the survey measures brand association, not the generic nature of the term, undermining the majority's reliance on such evidence. Breyer expresses concern that the majority's approach leads to an unpredictable standard for determining trademark eligibility, advocating that terms in the “generic.com” format should not typically qualify for federal trademark registration. “Booking.com” is considered a generic term that should not receive federal trademark registration due to its potential to create significant anticompetitive effects in the online market. Owners of generic domain names gain inherent advantages, such as easier memorability and reduced marketing costs, as these names communicate the nature of their business effectively. Generic names can inspire immediate consumer trust and authority, complicating competition for businesses with distinctive names. Additionally, ownership of a generic domain provides automatic exclusivity that is not available in traditional trademark law, allowing only one entity to hold a specific domain name globally. This exclusivity can make it easier for consumers to locate businesses online, as they may search for or directly enter the generic domain name in their browsers. Granting trademark protection to generic domains would further enhance these competitive advantages by enabling owners to restrict others from using similar domain names, potentially leading to aggressive legal actions against competitors. The argument posits that trademark registration would not be sought unless there was an intent to expand competitive exclusivity beyond the domain name itself, given that existing trademark and unfair competition laws already offer some protections against misuse and misleading practices. The excerpt highlights concerns regarding the trademark protection of "generic.com" names, such as "pizza.com" or "flowers.com," and the potential anticompetitive consequences of allowing such marks to receive trademark protection. As the internet expands and more businesses adopt these generic names, the risk of monopolistic behavior increases, potentially leading to a market dominated by a single firm for each product, contrary to competitive economic principles. Although the Court suggests that doctrines like likelihood of confusion and fair use will limit the protection of these names, this assurance may not alleviate the concerns of competitors. Established trademark owners might pursue litigation to extend their rights, which could intimidate other businesses and hinder market entry for new firms. The example of "Advertise.com" illustrates how litigation can impact competition, as seen in the case where the owner secured a preliminary injunction against a competitor. Ultimately, the dissenting opinion expresses a fear that granting trademark protection to "generic.com" terms will create monopolies over valuable domain names, thereby stifling competition in online commerce.