“A generic name – the name of a class of products or services – is ineligible for federal trademark registration,” the Supreme Court held on Tuesday in its decision in the closely-watched booking.com case. However, while the nation’s highest court determined that such generic marks may not be registered with the U.S. Patent and Trademark Office (“USPTO”), adding a Generic top-level domain, such as “.com” to such a generic term is capable of changing the outcome, which is why “‘Booking.com’ – unlike the term ‘booking’ standing alone – is not generic” in the eyes of the court.
In its decision, which was authored by Justice Ginsburg, the court 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.” In other words, a term is not generic and can be eligible for federal trademark registration if it is capable of distinguishing the goods/services of one company from those of others – in furtherance of the goal of trademark law, which is to “protect the public so it may be confident that, in purchasing a product bearing a particular trade-mark which it favorably knows, it will get the product which it asks for and wants to get.”
The case at hand – which got its start more than five years ago when Booking.com filed a trademark application for registration for its name, including the “.com,” for use in connection with online hotel-reservation services – ended up before the Supreme Court after the USPTO and lower courts determined that “booking.com” was simply a generic term to refer to the company’s business.
Considering whether the “combination of a generic word and ‘.com’ is generic” as a whole, which is what the USPTO asserted when it refused to register Booking.com’s trademark, the court considered three “guiding principles:” (1) “a ‘generic’ term names a ‘class’” of goods or services, rather than any particular feature or exemplification of the class;” (2) “for a compound term, the distinctiveness inquiry trains on the term’s meaning as a whole, not its parts in isolation;” and (3) “the relevant meaning of a term is its meaning to consumers.”
With these three tenets in mind, the court stated that “whether ‘Booking.com’ is generic turns on whether that term, taken as a whole, signifies to consumers the class of online hotel-reservation services.” As such, Justice Ginsburg asserts, “If ‘Booking.com’ were generic, we might expect consumers to understand Travelocity – another such service – to be a ‘Booking.com.’” In that same vein, “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.” But, “consumers do not in fact perceive the term ‘Booking.com’ that way,” she states, citing lower court findings.
Because Booking.com “is not a generic name to consumers, it is not generic” from a trademark perspective, which “should resolve this case,” Justice Ginsburg states.
Domain Names & Competition
Speaking to the nature of domain names, generally, Justice Ginsburg asserts that the way they work suggests a lack of genericity, as “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-name system can infer that BOOKING.COM refers to some specific entity.” Therefore, even if a term on its own is generic, she says that “consumers could understand a given ‘generic.com’ term to describe the corresponding website or to identify the website’s proprietor,” and with that in mind, the Justice states that the court “therefore resists the USPTO’s position that ‘generic.com’ terms are capable of signifying only an entire class of online goods or services” – such as online travel bookings/reservations – “and, hence, are categorically incapable of identifying a source.”
Although, the court does drive home the point that while such “generic.com” terms may be eligible for registration, “whether any given ‘generic.com’ term is generic … 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.”
As for the competition-specific benefits that Booking.com stands to gain – and other travel booking business very well might lose – as a result of the registration of “booking.com,” which the USPTO argued in connection with its decision to reject Booking.com’s mark (i.e., “Consumers might enter the word ‘booking’ in a search engine, or proceed directly to ‘booking.com’ in the expectation that [online hotel-booking] services will be offered at that address”), the majority was not persuaded.
The “competitive advantages” that Booking.com may reap as a result of the registration and the potential hindrance to similarly-situated companies does “not inevitably disqualify a mark from federal registration,” Justice Ginsburg writes, noting that “when a mark incorporates generic or highly descriptive components, consumers are less likely to think that other uses of the common element emanate from the mark’s owner.” Moreover, she states that “[i]n a ‘crowded’ field of look-alike marks (e.g., hotel names including the word ‘grand’), consumers ‘may have learned to carefully pick out’ one mark from another.” The same is likely to be the case here, and taken together with various trademark tenets that “guard against the anticompetitive effects the USPTO identifies,” such as likelihood of confusion and fair use, the registration of Booking.com “would not yield its holder a monopoly on the term ‘booking,” per Ginsburg.
Breyer’s Dissent: “Serious Anticompetitive Consequences”
In the case’s lone dissent, Justice Breyer begins by asking, “What is Booking.com?” To answer that question, he says, “One need only consult the term itself. [The company] provides an online booking service. The company’s name informs the consumer of the basic nature of its business and nothing more.” Therein lies the problem in his eyes.
“Trademark law does not protect generic terms, meaning terms that do no more than name the product or service itself,” a principle that he says “preserves the linguistic commons by preventing one producer from appropriating to its own exclusive use a term needed by others to describe their goods or services.” As such, generic terms (as opposed to descriptive ones) are not eligible for use as a trademark, which is true “even if a particular generic term ‘ha[s] become identified with a first user’ in the minds of the consuming public,” and this reason for this, he states, “is simple … to hold otherwise “would grant the owner of the mark a monopoly, since a competitor could not describe his goods as what they are.”
Citing the 1888 decision in Goodyear, in which the Supreme Court held that adding “Company” to “Goodyear rubber” did not change its status as a generic term, Justice Breyer states 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.”
The case at hand “requires us to apply these principles in the novel context of internet domain names,” and according to Breyer, the key question at issue is “whether a term that takes the form ‘generic.com’ is generic in the ordinary course.” In his view, “appending ‘.com’ to a generic term ordinarily yields no meaning beyond that of its constituent parts.” With that in mind, and “because the term ‘Booking.com’ is just such an ordinary ‘generic.com’ term” – one that he says is “merely a necessary component of any web address” – it is not eligible for trademark registration.
“When combined with the generic name of a class of goods or services, ‘.com’ conveys only that the owner operates a website related to such items,” he states. “Just as ‘Wine Company’ expresses the generic concept of a company that deals in wine, ‘wine.com’ connotes only a website that does the same. The same is true of ‘Booking.com.’”
Addressing the “functional exclusivity” that comes with owning a domain name, while the majority asserts that such ownership and operation serves to bolster an argument of distinctiveness, Breyer states that it “does not negate the principle animating Goodyear: Terms that merely convey the nature of the producer’s business should remain free for all to use.” This proves to be a segue into his argument that “granting trademark protection to ‘generic.com’ marks threatens serious anticompetitive consequences in the online marketplace.”
“The owners of short, generic domain names enjoy all the advantages of doing business under a generic name,” Breyer states. In addition to being easy to remember, these names are easier to find online. For example, he says, “A consumer who wants to buy wine online may perform a key-word search and be directed to ‘wine.com.’ Or he may simply type ‘wine.com’ into his browser’s address bar, expecting to find a website selling wine.” Beyond those benefits, the use of “a generic business name may create the impression that it is the most authoritative and trust- worthy source of the particular good or service,” thereby making it “harder for distinctively named businesses to compete.”
“The owner of a generic domain name enjoys these benefits not because of the quality of her products or the goodwill of her business, but because she was fortunate (or savvy) enough to be the first to appropriate a particularly valuable piece of online real estate.” And still yet, he asserts that the domain name system, as it currently stands, “already ensures that competitors cannot appropriate a business’s actual domain name. And unfair-competition law will often separately protect busi- nesses from passing off and false advertising.”
“As the internet grows larger, as more and more firms use it to sell their products, the risk of anticompetitive consequences grows. Those consequences can nudge the economy in an anticompetitive direction. At the extreme, that direction points towards one firm per product, the opposite of the competitive multifirm marketplace that our basic economic laws seek to achieve.”
Ultimately, Justice Breyer states that “making such [generic.com] terms eligible for trademark protection” is “inconsistent with trademark principles and sound trademark policy,” noting that he “fears 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,” and will serve to “inhibit, rather than to promote, free competition in online commerce.”
*The case is United States Patent and Trademark Office et al. v. Booking.com B.V., 19–46 (U.S.).