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Supreme Court Rejects Per Se Rule that “generic.com” is Generic

General / Jul 01, 2020

Article by Clyde Shuman 

The Supreme Court of the United States has rejected what it called the “sweeping” rule of the U.S. Patent and Trademark Office (PTO) that the combination of a generic word and “.com” is generic, specifically finding that the mark “Booking.com” is not generic. In United States Patent and Trademark Office v. Booking.com B. V., No. 19-46, the Court (in an opinion delivered by Justice Ginsburg), affirming the judgment of the U.S. Court of Appeals for the Fourth Circuit, held that a term styled “generic.com” is a generic name for a class of goods or services only if the term has that meaning to consumers. In this case, consumers do not perceive the term “Booking.com” to signify online hotel-reservation services as a class, the term. According to the Court, in circumstances like those presented here, a “generic.com” term is not generic and can be eligible for federal trademark registration.

By way of background, Booking.com is a digital travel company that provides hotel reservations and other services under the brand “Booking.com,” which is also the domain name of its website. Booking.com sought to register four marks in connection with travel-related services, each mark containing the term “Booking.com.” Both the examining attorney and the Trademark Trial and Appeal Board (TTAB) concluded that the term“Booking.com” is generic for the services at issue and is thus unregistrable. According to the TTAB. “Booking” means making travel reservations, and “.com” signifies a commercial website. The TTAB ruled that “customers would understand the term BOOKING.COM primarily to refer to an online reservation service for travel, tours, and lodgings.” Alternatively, the TTAB held that even if “Booking.com” is descriptive, and not generic, it is unregistrable because it lacks secondary meaning.

Booking.com sought review in the U. S. District Court for the Eastern District of Virginia, under a mode of review that allowed introduction of evidence not presented to the PTO. Relying in significant part on Booking.com’s new evidence of consumer perception, the district court concluded that “Booking.com”—unlike “booking”—is not generic. The court found, “[T]he consuming public primarily understands that BOOKING.COM does not refer to a genus, rather it is descriptive of services involving ‘booking’ available at that domain name.” Having determined that “Booking.com” is descriptive, the district court also  found that the term has acquired secondary meaning for hotel-reservation services and thus satisfied the distinctiveness requirement for registration.

The PTO appealed only the district court’s determination that “Booking.com” is not generic. The Fourth Circuit affirmed the district court’s judgment, rejecting the PTO’s contention that the combination of “.com” with a generic term like “booking” “is necessarily generic.”

In its majority opinion here, the Supreme Court first held that whether “Booking.com” is generic turns on whether that term, taken as a whole, signifies to consumers the class of online hotel-reservation services. Analogizing the Court said that, if “Booking.com” were generic, “we might expect consumers to understand Travelocity—another such service—to be a ‘Booking.com.’ We might similarly expect that a consumer, searching for a trusted source of online hotel-reservation services, could ask a frequent traveler to name her favorite ‘Booking.com’ provider.”

However, the Court noted that consumers do not perceive “Booking.com” that way, a finding no longer disputed by the PTO. The Court said, succinctly, ”That should resolve this case: Because ‘Booking.com’ is not a generic name to consumers, it is not generic.”

The Court rejected the PTO’s argument for a nearly per se rule that when a generic term is combined with a generic top-level domain like “.com,” the resulting combination is generic. That is, per the PTO, every “generic.com” term is generic, absent exceptional circumstances. The Court noted that the PTO’s own past practice reflects no such comprehensive rule and that existing registrations inconsistent with the PTO’s rule would be at risk of cancellation. The Court thus declined to adopt a rule essentially excluding registration of “generic.com” marks, saying it discerned no support for such a rule in trademark law or policy.

The Court rejected the PTO’s argument that its proposed exclusionary rule follows from a common-law principle, see Goodyear’s India Rubber Glove Mfg. Co. v. Goodyear Rubber Co., 128 U. S. 598 (1888), that a generic corporate designation added to a generic term does not confer trademark eligibility. The PTO argued that “Generic.com” is like “Generic Company” and thus ineligible for trademark protection, let alone federal registration. According to the PTO, adding“.com” to a generic term—like adding “Company”—“conveys no additional meaning that would distinguish [one provider’s] services from those of [another].”

The Court disagreed, saying that a “generic.com” term may also convey to consumers a source-identifying characteristic: an association with a particular website. The Court note that only one entity can occupy a particular Internet domain name at a time, so “[a] consumer who is familiar with that aspect of the domain-name system can infer that BOOKING.COM refers to some specific entity.” Thus, per the Court, consumers could understand a given “generic.com” term to describe the corresponding website or to identify the website’s proprietor. The Court said, “We therefore resist the PTO’s position that ‘generic.com’ terms are capable of signifying only an entire class of online goods or services and, hence, are categorically incapable of identifying a source.”

The Court also found that the PTO’s proposed rule was incompatible with the “bedrock principle of the Lanham Act,” viz., that whether a term is generic depends on its meaning to consumers. Citing its earlier decision in Goodyear, the Court said that it “reflects a more modest principle harmonious with Congress’ subsequent enactment: A compound of generic elements is generic if the combination yields no additional meaning to consumers capable of distinguishing the goods or services.”

The Court was careful not to embrace a rule automatically classifying “generic.com” terms as non-generic. The Court held that, whether any given “generic.com” term is generic 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.

The Court also rejected the PTO’s argument that offering protection for a term like “Booking.com” would hinder competitors, by excluding or inhibiting competitors from using the term “booking” or adopting domain names like “ebooking.com” or “hotel-booking.com.” The Court found that this concern was true for any descriptive mark, and that the issue then becomes likelihood of confusion, based on a mark’s distinctiveness, which guards against the anticompetitive effects the PTO identifies.

The Court concluded, declining to adopt a rule that combining a generic term with “.com” yields a generic composite.

Justice Breyer, in a lengthy dissent, argued that “Booking.com” “informs the consumer of the basic nature of its business and nothing more.” As such, the Court’s holding was inconsistent with trademark principles and sound trademark policy.

Citing Goodyear, Justice Breyer disagreed that the Lanham Act repudiated that decision, noting that the statute, although extending trademark protection to descriptive marks that have acquired secondary meaning, did not disturb the basic principle that generic terms are ineligible for trademark protection.

Justice Breyer asserted that appending “.com” to a generic term “ordinarily yields no meaning beyond that of its constituent parts.” Because “Booking.com” is an ordinary “generic.com” term, per Justice Breyer, it is not eligible for trademark registration. Specifically, he argued that a top-level domain such as “.com” has no capacity to identify and distinguish the source of goods or services but is merely a necessary component of any web address. Per Justice Breyer, when combined with the generic name of a class of goods or services, “.com” conveys only that the owner operates a website related to such items.

Justice Breyer said that, for a website using an inherently distinctive second-level domain, it is “obvious” that adding “.com” “merely denotes a website associated with that term.” As a result, courts generally ignore the top-level domain when analyzing likelihood of confusion. Per Justice Breyer, generic second-level domains are no different. “The meaning conveyed by ‘Booking.com’ is no more and no less than a website associated with its generic second-level domain, ‘booking.’ … The term as a whole is just as generic as its constituent parts.”

Justice Breyer rejected the Court’s argument distinguishing Goodyear because only one entity can hold the contractual rights to a particular domain name at a time, so that  consumers may infer that a “generic.com” domain name refers to some specific entity. Per Justice Breyer, that a generic term may suggest association with a specific entity does not render it non-generic. He said that “[t]erms that merely convey the nature of the producer’s business should remain free for all to use.” Citing Goodyear, he said, “the term ‘Wine, Inc.’ is generic because it signifies only a company incorporated for that purpose. Similarly, ’Booking, Inc.’ may not be trademarked because it signifies only a booking company. The result should be no different for ‘Booking.com,’ which signifies only a booking website.”

Justice Breyer also decried the reliance on survey evidence to determine registration eligibility for “generic.com” domains, saying that such evidence “has limited probative value in this context.”

Justice Breyer also argued that protecting “generic.com” marks “threatens serious anticompetitive consequences in the online marketplace.” Per Justice Breyer, generic names are easy to remember and, because they immediately convey the nature of the business, the owner needs to expend less effort and expense educating consumers. “These advantages make it harder for distinctively-named businesses to compete.”

He concluded, “’Booking.com’ refers to an internet booking service, which is the generic product that respondent and its competitors sell. No more and no less. The same is true of ‘generic.com’ terms more generally. By making such terms eligible for trademark protection, I fear that today’s decision will lead to a proliferation of ‘generic.com’ marks, granting their owners a monopoly over a zone of useful, easy-to-remember domains. This result would tend to inhibit, rather than to promote, free competition in online commerce.”

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