Monday, July 06, 2020

Ruling That "" Terms May Be Registrable, Supreme Court Affirms Fourth Circuit BOOKING.COM Judgment

In a closely watched case, at least by trademark attorneys, the United States Supreme Court ruled that a proposed mark comprising a generic term coupled with ".com" is not automatically generic, but may be registrable provided that consumers perceive the mark as a source indicator. The Court affirmed the judgment of the U.S. Court of Appeals for the Fourth Circuit, which rejected the USPTO's argument that the combination of ".com" with the generic term "booking" is generic for online hotel-reservation services. [TTABlogged here]. The Supreme Court concluded that "[i]n circumstances like those this case presents, a '' term is not generic and can be eligible for federal trademark registration." USPTO v. B.V., 591 U.S. ___ (2020).

The U.S District Court for the Eastern District of Virginia concluded, based on evidence of consumer perception, that BOOKING.COM, unlike the word "booking" itself, is not generic. [TTABlogged here]. It also found that the term had acquired distinctiveness with regard to hotel reservation services and was therefore registrable. 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."

The parties agreed that "[e]ligibility for registration ... turns on the mark's capacity to 'distinguis[h]' goods 'in commerce.'" Trademark Act Section 1052. And the question of whether BOOKING.COM is generic "turns on whether the mark, taken as a whole, signifies to consumers the class of on-line hotel reservation services."

The Supreme Court pointed out that the courts below determined that consumers "do not in fact perceive the term '' that way." "That should resolve this case. Because '' is not a generic name to consumers, it is not generic."

The USPTO, however, contended that an inquiry into consumer perception was unnecessary, not that the determination regarding consumer perception was wrong. According to the USPTO, every "" term is generic, absent exceptional circumstances. Noting that the Office has allowed other "" terms to be registered, the Court found no support for that view in trademark law or policy.

The USPTO relied on Goodyear's Rubber Glove Mfg. Co. v. Goodyear Rubber Co., which held that "Goodyear Rubber Company" was not "capable of exclusive appropriation," the term "Goodyear Rubber" being generic. It argued that adding ".com" to a generic term is like adding "company" and conveys no additional meaning to distinguish one provider's goods or services from another's. The Court disagreed.

A “” term might also convey to consumers a source-identifying characteristic: an association with a particular website. As the PTO and the dissent elsewhere acknowledge, 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-namesystem can infer that BOOKING.COM refers to some specific entity.” *** Thus, consumers could understand a given “” term to describe the corresponding website or to identify the website’s proprietor.

The Court noted that "" terms are not automatically nongeneric. Whether a given "" term is generic depends on whether consumers perceive the term as a source indicator.

The majority opinion addressed the concerns of Justice Breyer in his dissent where he argued that providing trademark protection for a "" term would hinder competition. According to the majority, "trademark law hems in the scope" of descriptive marks because weaker marks are given less protection: "consumers are less likely to think that other uses of the common element emanate from the mark's owner." Moreover, the doctrine of "classic fair use" shields one who uses a descriptive term "fairly and in good faith," and not as a trademark, to describe her own goods.

In addition, conceded that "" would be a weak mark, accepted that close variations are not likely to infringe. and acknowledged that registration of its mark would not prevent competitors from using the word "booking" to describe their own services.

Finally, the USPTO questioned whether owners of "" mark need additional protection in addition to the competitive advantages arising from ownership of the domain name. The Court was not impressed, observing that "the PTO fails to explain how the exclusive connection between a domain name and its owner makes the domain name a generic term all should be free to use." And dismissing the USPTO's argument that protection under unfair competition law would still be available if "" were deemed generic, the Court saw no reason to deny the benefits provided to other marks that are not generic.

And so the Court rejected the USPTO's sole ground for challenging the judgment of the Court of Appeals by ruling that "" terms are eligible for registration.

Read comments and post your comment here.

TTABlog comment: In his dissent, Justice Breyer raises a number of real world concerns, noting, for example, that even if the defense of fair use may ultimately protect alleged infringers, just the threat of costly litigation will discourage others from using variations of the registered mark.

Text Copyright John L. Welch 2020.


At 2:47 PM, Anonymous Anonymous said...

Too bad the courts don't routinely have Breyer's concern for the costs of litigation. Often, they act like getting a court decision is something people do everyday, like brushing their teeth.

At 7:51 PM, Anonymous Anonymous said...

Seems to bluntly unwind rather comprehensive precedent, at least since the age of the Internet. I wonder if SCOTUS realizes the implications of such a decision on USPTO? What do you think John? What happens now to, and their ilk? If SCOTUS reasoning is that achieved sufficient fame to make the domain inclusive mark registerable, don't those parties have a bone to pick with earlier decisions perhaps undercutting the fame of their domain inclusive marks?


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