U.S. Supreme Court Finds Certain “Generic.com” Marks Capable of Trademark Protection

In an 8-1 decision, the U.S. Supreme Court ruled that BOOKING.COM can be registered as a trademark, holding that the addition of “.com” to an otherwise generic term could transform it to a protectable trademark. The case, United States Patent and Trademark Office v. Booking.com B.V., rejected a bright line rule that generic terms can never be capable of trademark protection, holding 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.”[1]

While the Court was careful to avoid setting precedent that the addition of “.com” to an otherwise generic mark automatically transforms the term to a protectable mark, the decision provides a new framework to establish and secure rights in terms that were previously viewed as incapable of functioning as a source-identifying trademark.

Generic Terms and the Spectrum of Distinctiveness
Trademarks are categorized along a continuum, ranging from marks that are inherently distinctive to terms that are deemed generic in relation to the mark’s specific goods and services. Inherently distinctive marks include marks that are arbitrary or fanciful (APPLE for computers) or suggestive (NETFLIX for streaming services), and are deemed capable of functioning as a source identifier.

Next on the spectrum are marks that are merely descriptive because they describe the product or service, or a quality or characteristic of the product or service. Such marks are incapable of functioning as a source identifier until they develop secondary meaning or acquired distinctiveness. Acquired distinctiveness can be established by proving that a term has become distinctive as applied to the owner’s goods or services, that is, the consuming public recognizes the term as attributable to a source (SHARP for televisions).

Generic terms fall at the end of the distinctiveness continuum and are terms that represent the common name of the product or service in question (APPLE for apples, CLOCK for timepieces). Terms that are generic for the designated goods and services are not registrable on the Principal or Supplemental Register under any circumstances, because generic terms are incapable of distinguishing one owner’s goods or services from goods or services of another and instead are terms needed by the industry in order to compete effectively.

Additionally, if the proposed mark consists of a combination of generic words, it does not confer any trademark eligibility. For example, the addition of a generic corporate designation to a generic word (i.e. “Generic Company”) still creates a generic mark incapable of trademark registration.[2] However, the Booking.com decision stands to re-evaluate this long held rule.

The Booking.com Case
Booking.com is a digital travel company providing booking and reservation services under the mark BOOKING.COM and accessible at the same domain name. When Booking.com applied for the BOOKING.COM trademark, the USPTO and Trademark Trial and Appeal Board found the mark generic for a webpage used to book travel reservations.[3] Booking.com appealed.

The Eastern District of Virginia considered Booking.com’s evidence of consumer recognition and perception of its BOOKING.COM mark and determined that BOOKING.COM – unlike “booking” itself – is not generic.[4] The District Court noted “the consuming public primarily understands that BOOKING.COM does not refer to a genus,” but “rather is [merely] descriptive of services involving ‘booking’ available at the domain name.[5] As the mark had acquired secondary meaning, it has met the distinctiveness requirement for registration.[6] The Court of Appeals for the Fourth Circuit affirmed in a split decision.[7]

The Supreme Court affirmed the Fourth Circuit. In the opinion, the majority rejects the USPTO’s argument that “generic.com” is equivalent to “Generic Company” and is therefore ineligible for trademark protection, let alone federal registration.[8] Instead, the Court noted only one entity can occupy a particular internet domain name, so “[a] consumer who is familiar with that aspect of the domain-name system can infer that BOOKING.COM refers to some specific entity, thereby capable of identifying a particular source.[9] The Court continued, that here, consumer perception is key and noted the “bedrock principle of the Lanham Act is incompatible with an unyielding legal rule that entirely disregards consumer perception.”[10]

However, the Court remained unwilling to embrace a rule that automatically classifies all “generic.com” terms as non-generic, holding “[w]hether any given ‘generic.com’ term is generic, … depends on whether consumers in fact perceive that term as a name of a class, or, instead, as a term capable of distinguishing among members of the class.” In other words, the “generic.com” mark must be capable of acting as a source-identifying trademark by acquiring secondary meaning.[11]

Takeaways
The Court’s ruling in Booking.com has the potential to change brand protection strategies for companies big and small. However, any “generic.com” marks would face an uphill battle to prove that they are capable of protection, requiring a significant amount of evidence of consumer perception to support that the mark functions as a trademark before the mark can be registered. It is unclear if “generic.com” marks will be registrable on the Supplemental Register until secondary meaning is established.

Additionally, allowing “generic.com” registrations could grant a monopoly over otherwise generic words, arguably making it more difficult for legitimate competitors to compete effectively. The Court addressed these concerns, noting that trademark law has its own limiting principles that should prevent such problems. For instance, “generic.com” marks would fall on the weak end of the spectrum and would limit their owners’ right to enforce. Practically speaking, if a company is successful in obtaining a “generic.com” trademark registration, it may only be able to protect against identical uses of “generic.com” and not just the “generic” word or other domain name designations like “generic.org.”

However, even battles over weak marks are costly and burdensome, and as Justice Breyer’s dissent warns, “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. The result would tend to inhibit, rather than promote, free competition in online commerce.”[12]

As is often the case, the impact of the Booking.com decision will largely be determined by the actions of trademark owners and their approach to protection and enforcement of “generic.com” marks.

For more information on the Booking.com ruling may impact your trademark strategies, please contact your local Quarles & Brady attorney or:

• Lori Meddings / (608) 283-2653/ lori.meddings@quarles.com