On May 4, 2020, the Supreme Court held arguments in the matter of the United States Patent and Trademark Office vs. Booking.com.[1] No, you’re not experiencing déjà vu – our summary of oral arguments was published in the Gottlieb, Rackman & Reisman newsletter not more than two months ago, but we already have a decision from the high court!
In a fourteen-page, 8-1 decision authored by Justice Ruth Bader Ginsburg, the Supreme Court affirmed the judgment of the Court of Appeals for the Fourth Circuit and held that “Booking.com” is eligible for trademark protection and registration under the Lanham Act, and the fact that the trademark consists of a generic term (“booking”) combined with a generic top-level domain name (“.com”) did not categorically or necessarily mean that the combined term was itself a generic term.[2] More importantly, the Court held that whether a term is generic or descriptive depends on a mark’s “primary significance” to consumers.
To be sure, the Court’s opinion notes:
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.[3]
The Court’s application of its holding to this case perhaps best exemplifies the point:
[W]hether “Booking.com” is generic turns on whether that term, taken as a whole, signifies to consumers the class of online hotel-reservation services. Thus, 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.
Consumers do not in fact perceive the term “Booking.com” that way, the courts below determined.[4]
This outcome should not be a total surprise to anyone who read our oral argument recap, which predicted an affirmance that would avoid any per se rules. Indeed the Court noted its holding was not groundbreaking, but a reinforcement of the same test “shared by Courts of Appeals and the PTO’s own manual for trademark examiners.”[5] Let’s circle back to a couple of questions raised during oral argument we thought were significant.
While the majority opinion did not expressly overrule Goodyear, it did implicitly abrogate its per se rule by rephrasing its holding in a way that “reflects a more modest principle harmonious with [the Lanham Act]: A compound of generic elements is generic if the combination yields no additional meaning to consumers capable of distinguishing the goods or services.”[6] The Court also distinguished the addition of “.com” from the addition of “Company,” in that the multiple independent entities can simultaneously exist as “Generic Company,” but because of the nature of the Internet, only one entity can register “Generic.com,” and therefore, “consumers could understand a given ‘generic.com’ term to describe the corresponding website or to identify the website’s proprietor,” such that the domain name as a whole acts as a source-identifier. Justice Breyer, the lone dissenter, accepted the Patent Office’s argument that Goodyear foreclosed registration of a “generic.com,” explaining his view that “where a compound term consists simply of a generic term plus a corporate designation, the whole is necessarily no greater than the sum of its parts.”[7]
Next, the Patent Office argued that the monopolization of a single domain name already provides a competitive advantage, and that permitting registration of a “generic.com” would be antithetical to trademark law and would have anti-competitive effects because, for example, the registration of “Booking.com” might preclude registration or use of similar domain names like “eBooking.com” or “hotel-booking.com.” Indeed, a significant amount of time was devoted to this issue at oral argument. Ultimately, the majority opinion casts these concerns aside as attended to any descriptive mark, and, drawing on Justice Gorsuch’s questions at oral argument, trademark law already responds to such concerns vis-à-vis the likelihood of confusion analysis and fair use defense.[8] In other words, a descriptive mark has less strength as a source-identifier than a fanciful mark and consumers confronted with similarly descriptive terms to describe similar goods is more likely to associate the descriptive term with the goods themselves, rather than with the source of the goods.
Ultimately, this decision is not likely to cause major waves in the trademark registration process or infringement lawsuits because, as the Supreme Court noted, the Booking.com decision is in line with longstanding practices, and was only necessitated by the USPTO changing its practices. On the other hand, this decision clarifies a previously ambiguous area of trademark law, and as a result, we are likely to see an uptick in applications for domain names by applicants that had been less willing to incur costs and fees in the face of uncertainty over whether generic domain names could be registered. Now we know.
[1] Patent & Trademark Office v. Booking.Com, No. 1-46, Supreme Court Oral Argument Transcript (May 4, 2020), available at https://www.supremecourt.gov/oral_arguments/argument_transcripts/2019/19-46_4gc5.pdf
[2] Slip Opinion, U.S. Patent & Trademark Office v. Booking.com, No. 19-46 (U.S. June. 30, 2020), available at https://www.supremecourt.gov/opinions/19pdf/19-46_8n59.pdf
[3] Id., at 11.
[4] Id., at 7.
[5] Id., at 6-7, n.3.
[6] Id., at 10.
[7] Slip Op, supra n.2, Dissenting Op. p. 5.
[8] Compare Slip Op, supra n.2, at 12-13 with supra n.1, pp. 32-33, 55, 65-67.