Fourth Circuit Affirms E.D. Va: BOOKING.COM is not Generic, USPTO Gets Attorneys' Fees

[This guest post was authored by John L. Strand, Trademark and Litigation Shareholder at Wolf Greenfield.] We’ve followed on this blog the juridical journey of Booking.com and that company’s attempts to register the mark BOOKING.COM for travel reservation related services, starting with the TTAB, then on a Section 1071 appeal of the decision before the U.S. District Court for the Eastern District of Virginia, and the E.D. Virginia’s decision to order Booking.com to pay the USPTO’s expenses. Now the U.S. Court of Appeals for the Fourth Circuit has affirmed the E.D. Virginia’s decision, though Judge Wynn wrote a separate opinion concurring in part and dissenting in part. Booking.com B.V. v. USPTO, 915 F.3d 171 (4th Cir. 2019). (re-hearing en banc denied, April 4, 2019; petition for writ of certiorari filed April 20, 2019).

Genericness – Finding of Descriptiveness

Below, the E.D. Virginia found that although the word “booking” is generic for the offered services, the term BOOKING.COM as a whole was descriptive. The USPTO conceded that if the mark is found descriptive, it is registrable under Section 2(f).

To analyze the issue of genericness, the Fourth Circuit confirmed that in a registration proceeding, it is the USPTO that “’always bears the burden’ of establishing that a proposed mark is generic.” (Slip Op. at 9.) The Fourth Circuit follows a three-part test to determine whether a mark is generic: “(1) identify the class of product or service to which use of the mark is relevant; (2) identify the relevant consuming public; and (3) determine whether the primary significance of the mark to the relevant public is as an indication of the nature of the class of the product or services to which the mark relates, which suggests that it is generic, or an indication of the source or brand, which suggests that it is not generic.” (Slip Op. at 10.)

Here, the first two prongs were uncontested; Booking.com conceded those factors went against it. Instead, Booking.com fought on the third prong of the test, and it succeeded in the appeal because (1) the USPTO failed to produce evidence that the public uses “booking.com”—as a whole—generically, and (2) Booking.com submitted a Teflon survey demonstrating that “74.8% of respondents identified BOOKING.COM as a brand name, rather than as a general reference to hotel reservation websites.” (Slip Op. at 16-17.) The Fourth Circuit deferred to the district court’s finding that the survey was “methodologically sound,” so it likewise found that the survey was “strong evidence” that BOOKING.COM is not generic. (Slip Op. at 17.)

Although the Fourth Circuit found that these facts supported the district court’s judgment, the Fourth Circuit rejected the district “court’s [legal] determination as to the trademark significance of the fact that a domain name like ‘booking.com’ necessarily refers only to a single source.” (Slip Op. at 13-14, n. 7.) The Fourth Circuit found that adopting such a legal rule would “effectively make any domain name distinctive, which oversteps the focus of our trademark jurisprudence on a mark’s primary significance to the public.” (Slip Op. at 21, n. 9.)

Genericness – USPTO Proposed “Rule”

On the opposite side of the spectrum of legally determining that a domain name refers only to a single source and is therefore descriptive, one of the USPTO’s arguments in support of a finding of genericness was that just adding a top-level domain (TLD) such as “.com” to a second-level domain (SLD) generic term, such as “booking,” is “necessarily generic.” (Slip Op. 19.)

The USPTO first analogized the addition of “.com” to a mark or term to be equivalent to adding “Corp.,” relying on Goodyear’s Rubber Mfg. Co. v. Goodyear Rubber Co., 128 U.S. 598, 602–03 (1888). As the Goodyear decision came down well before the Lanham Act, and other circuits have refused to adopt such a black-and-white rule, the Fourth Circuit likewise refused to adopt the rule.

Second, the USPTO argued that because the mark is nothing more than its component parts—two admittedly generic terms, “booking” and “.com”—the compound mark should also be generic. The Fourth Circuit likewise rejected this argument. But the court also held that “.com does not itself have source-identifying significance when added to an SLD like booking,” (Slip Op. 20-21), so doesn’t automatically create a non-generic mark from a generic SLD. Instead, a more searching inquiry is necessary to determine “whether the public primarily understands the term as a whole to refer to the source or the proffered service.” (Slip Op. 21).

USPTO Attorneys’ Fees

Title 15 U.S.C. § 1071(b)(3) states that an applicant in a Section 1071 appeal action must pay “all the expenses of the proceeding . . . whether the final decision is in favor of such party or not.”  There has been a clash between the Fourth Circuit’s interpretation of that language and the Federal Circuit’s interpretation of a similar provision in the patent statute (35 U.S.C. § 145), on whether “expenses” includes attorneys’ fees. The Federal Circuit said no. But, seemingly constrained by its own previous decision in Shammas v. Focarino, 784 F.3d 219, 225 (4th Cir. 2015), the Fourth Circuit once again held that when Section 1071(b)(3) uses the term “all expenses of the proceeding,” “expenses” includes the USPTO’s attorneys’ fees. It will be interesting to watch if Booking.com petitions for en banc review and/or seeks Supreme Court review of this important issue.

Judge Wynn’s Separate Opinion

In a separate 17 page concurrence-in-part and dissent-in-part, Judge Wynn writes that Booking.com is faced with a problem it “chose to bring upon itself” by adopting a generic term for its business. (Slip Op. at 29.) Although he agreed “with much of the analysis in the majority opinion,” ultimately he would not have affirmed the district court’s judgment.

Judge Wynn primarily relies on a number of previous decisions from other circuits that found generic domain names to be generic, including HOTELS.COM, LAWYERS.COM, ADVERTISING.COM, and MATTRESS.COM. Judge Wynn found that these cases came out the opposite of the majority opinion because of an incorrect legal standard applied by the Eastern District of Virginia, namely in holding that “when combined with a[] [Secondary Level Domain], a [Top Level Domain] generally has source identifying significance and the combination of a generic [Secondary Level Domain] and a [Top Level Domain] is generally a descriptive mark that is protectable upon a showing of acquired distinctiveness.” (Slip Op. 32.) The cases on which Judge Wynn relied upon did not apply this legal framework or presumption—a legal presumption that was rejected by the majority, despite the majority agreeing with the district court’s factual findings.

In the end, Judge Wynn gave greater weight to the risk of “monopolization of language” than the majority and would not have allowed the registration of a mark he sees as merely generic:

I believe that this Court’s affirmance of the district court’s judgment—even as it rejects the district court’s legal analysis—unjustifiably empowers Booking.com to monopolize language, thereby enclosing the linguistic commons and adversely affecting competitors in precisely the manner that trademark law seeks to forestall. Put simply, the majority opinion’s judgment will directly disadvantage Booking.com’s competitors by taking away their ability to use the term ‘booking’ in their own website domain names. Indeed, any competitors that attempt to use the term “booking” will face the risk of a costly, protracted, and uncertain infringement lawsuit.

Read comments and post your comment here.

TTABlog comment: There seems to be some dissatisfaction and/or disagreement with the Fourth Circuit's decision. What do you think?

PS: The USPTO has filed a petition for writ of certiorari in the Nantkwest case, seeking to overturn the CAFC's unfavorable ruling on attorneys' fees under the Patent Statute.

Text Copyright John L. Strand and John L. Welch 2019.