In June, the Supreme Court of the United States decided 8-1 in favour of Booking.com, allowing federal trade mark registration for a generic website name. The decision discusses eligibility for federal trade mark registration regarding domain names, in particular generic names which are usually ineligible for trade mark registration.

This was also the first time the Supreme Court conducted oral argument over the phone, necessitated by the COVID-19 pandemic.

BACKGROUND

Booking.com is a well-known 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 filed applications to register four marks in connection with travel-related services, each containing the term “Booking.com”.

The Patent and Trade Mark Office (the “PTO”) previously refused trade mark registration, concluding the terms were generic names for online hotel-reservation services. The Board observed that “Booking” means making travel reservations, and “.com” signifies a commercial website. The PTO came to the conclusion, urging a nearly per se rule, that when a generic term is combined with a generic Internet-domain name suffix like “.com”, the resulting combination is generic.

Booking.com then sought judicial review. The District Court determined that “Booking.com”, unlike the term “booking” standing alone, is not generic.

The Court of Appeals affirmed the District Court’s decision, finding no error in the Court’s assessment of how consumers perceive the term “Booking.com”.

The appellate court also rejected the PTO’s contention that, as a rule, combining a generic term like “booking” with “.com” yields a generic composite.

SUPREME COURT DECISION

The Supreme Court rejected the PTO’s decision and 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.

The Court took the view that whether a compound term is generic turns on whether that term, taken as a whole, signifies to consumers a class of goods or services: “Consumers do not in fact perceive the term “Booking.com” that way. Because “Booking.com” is not a generic name to consumers, it is not generic” [1]. As such, the Court held that it is not generic and is eligible for trade mark registration.

THE LAW

The Court determined their decision using the Lanham Act 1946 (the “Act”), the instrument for federal statutory trade mark protection. In particular, the Act characterises “distinctiveness” as one of the conditions for trade mark registration [1052]. Distinctiveness is often on an increasing scale for word marks, with generic terms at the lowest end of the distinctiveness scale. “Generic” terms are typically the name of the good itself or a class of goods or services, and are incapable of “distinguishing one producer’s goods from the goods of others and are therefore ineligible for registration” [4].

However, the Act also focuses on consumer perception: “the primary significance of the registered mark to the relevant public . . . shall be the test for determining whether the registered mark has become the generic name of goods or services” [§1064(3)]. Therefore, the Court could consider the relevant meaning of the term to its consumers. The question for the Court was whether “Booking.com” is generic “turns on whether that term, taken as a whole, signifies to consumers the class of online hotel-reservation services” [7].

The Court highlighted the PTO’s erroneous reliance on outdated case law, particularly Goodyear which predates the Act. Goodyear decided that a generic corporate designation (“Company”) added to a generic term does not confer trade mark eligibility on the reasoning that adding “Company” “only indicates that parties have formed an association or partnership to deal in such goods” [602]. The Court held that permitting exclusive rights in such a term would “tread on the right of all persons to deal in such articles, and to publish the fact to the world” [602-603].

The PTO in the present case maintained that “Generic.com,” is like “Generic Company” and is therefore ineligible. 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 other providers” [9].

DISSENT

Justice Stephen Breyer delivered the sole dissent, arguing that the Court’s decision could lead to a rush of generic trade marks that could stifle competition: “by making such terms eligible for trade mark 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” [13].

The majority argued these concerns are controlled by the test for infringement. Notably, a competitor’s use does not infringe a mark unless it is likely to confuse consumers. In assessing the likelihood of confusion, the Court considers the mark’s distinctiveness [§1114]. The Court held that these doctrines “guard against the anticompetitive effects…ensuring that registration of “Booking.com” would not yield its holder a monopoly on the term “booking”” [13]. Further, the majority argued that competitive advantages do not inevitably disqualify a mark from registration [§1052(e), (f )].

The Court ultimately decided that Booking.com can register its domain name as a trade mark despite its generic nature. The Court held the addition of “.com” to a generic word can make the entire combination eligible for federal trade mark protection and emphasised this must be determined with reference to consumer perception of the mark.

LOOKING FORWARD

The Court’s reliance on the Act highlights the shift in law to a consumer focus, which common law predating the Act did not consider. The Court highlighted that the PTO’s own past practice appears to reflect no such comprehensive rule and the enforcement of outdated law risks the cancellation of existing registrations.

This decision potentially opens the floodgates for automatic eligibility of generic terms. Interestingly, the majority’s argument of infringement principles managing anti-competition, could actually lead to costly litigation which may deter others from using variants on the trade mark, which could ultimately be anti-competitive. Whether this decision has anti-competitive effects in the future, watch this space.