Booking.com Heads to the Supreme Court – Top Level Domain Name Trademark Protection (Part II of II)

Introduction:

On November 8, 2019, the Supreme Court granted certiorari in United States Patent and Trademark Office v. Booking.com B.V.

In Part I of this blog post series, we explored the procedural posture of this case and examined how:

Booking.com B.V. (“Booking.com”) initially lost this case before the Trademark Trial and Appeal Board (“TTAB”) of the U.S. Patent and Trademark Office (“U.S. PTO”); and
Booking.com successfully used judicial review in the United States District Court for the Eastern District of Virginia to introduce important new evidence and win a favorable decision.

In this second blog post, we will explore the substantive legal issues involved in the current case pending before the Supreme Court.

Background of the Case:

As discussed in Part I of this blog post series, this case centers around Booking.com’s application to register four trademark applications involving the trademark “BOOKING.COM.” While:

one application was for a wordmark for BOOKING.com; and
the other three applications incorporated various stylized versions of BOOKING.COM;

the TTAB found that all four versions of the “BOOKING.COM” trademark were ineligible for registration insofar as the TTAB held that “BOOKING.COM” is generic as applied to the various travel agency / hotel reservation services recited in the applications.

As also discussed in Part I of this blog post series, Booking.com successfully overturned this TTAB ruling before the United States District Court for the Eastern District of Virginia and successfully defended the District Court’s decision before the U.S. Court of Appeals for the Fourth Circuit.

Purposes of Trademark Law:

The over-arching theory behind trademark law is to accomplish the dual objectives of:

preventing consumer confusion between goods/services and the sources of such goods/services; and
protecting the “linguistic commons” by preventing exclusive use of terms that represent their common meaning.

See: Booking.com B.V. v. United States Patent and Trademark Office, 915 F.3d 171 (2019) – the decision now on appeal before the Supreme Court.

This “tension” between preventing confusion and protecting the “linguistic commons” is embodied in the principle that only “distinctive” trademarks are capable of protection, e.g., of being Federally registered as trademarks through the U.S. PTO.

To determine whether a particular trademark is “distinctive,” courts first ascertain the trademark’s strength by categorizing it as either a:

generic trademark;
descriptive trademark;
suggestive trademark; or
arbitrary or fanciful trademark (which some courts divide into separate categories).

Each of these categories is discussed below.

Categories of Trademark Strength:

Generic trademarks are the common words used to describe a product or service – such as “DRY CLEANING” for dry cleaning services or LITE BEER for light beer. Such trademarks do not contain source-identifying significance – meaning that there is nothing in the trademark that would tell consumers the source of the underlying goods/services.

Descriptive trademarks are those which describe a function, use, characteristic, size or intended purpose of a product – such as “5 MINUTE DRY CLEANING” for dry cleaning services or EXTRA FOAMY LITE BEER for light beer.

Suggestive trademarks are those which require “imagination, thought, or perception to reach a conclusion about the nature of those goods or services.” (See: TMEP § 1209.01(a)). Examples of arguably suggestive trademarks include GREYHOUND (literally a fast animal) for busing services or JAGUAR (literally a fast animal) for cars.

Arbitrary trademarks comprise commonly used words which are applied to particular goods/services such that the trademark does not “suggest or describe a significant ingredient, quality, or characteristic of the goods or services”. (See: TMEP § 1209.01(a)). Examples of arbitrary trademarks include “APPLE” for computers and cell phones or “OLD CROW” for whiskey. Importantly, these same trademarks could be suggestive, descriptive or even generic if applied to other goods / services. For example, while APPLE may be arbitrary as applied to computers, it would be generic as applied to fresh produce.

Fanciful trademarks – generally considered the strongest trademarks – comprise terms which have been created solely as trademarks or are completely our of common usage such as KODAK, EXXON or PEPSI.

Distinctiveness & Trademark Strength:

On one end of the spectrum, trademarks which are suggestive, arbitrary or fanciful are considered inherently distinctive and, thus, are entitled to protection. The nature of such trademarks intrinsically identifies the source of particular goods / services. Accordingly, applicants seeking to register a suggestive, arbitrary or fanciful trademark through the U.S. PTO are not required to show proof of distinctiveness.

On the other end of the spectrum, trademarks which are generic can never obtain protection inasmuch as affording protection would effectively remove a commonly used word from the “linguistic commons” – preventing competitors from merely describing goods / services as what they are.

In-between these two extremes are descriptive trademarks, i.e., trademarks which may be protectable if and only if they have acquired secondary meaning (also known as “acquired distinctiveness”). This indicates that a trademark:

“may, through usage by one producer with reference to his product, acquire a special significance so that to the consuming public the word has come to mean that the product is produced by that particular manufacturer.”

(See TMEP § 1212 (citing 1 Nims, Unfair Competition and Trademarks at §37 (1947))).

Put another way, the Fourth Circuit explained that a trademark which has acquired secondary meaning has become sufficiently distinctive to “establish a mental association in the relevant public’s minds between the proposed mark and the source of the product or service.”

Proving Secondary Meaning for a Descriptive Trademark:

Applicants seeking to register a descriptive trademark through the U.S. PTO are required to show proof of secondary meaning. This is often done by submitting evidence of “advertising expenditures, sales success, length and exclusivity of use, unsolicited media coverage, and consumer studies (linking the name to a source).” In re Change Wind Corp., 123 USPQ2d 1453, 1467 (TTAB 2017).

With respect to consumer studies or surveys, so-called “Teflon” surveys – the type of survey which Booking.com successfully introduced into evidence in the United States District Court for the Eastern District of Virginia – are the most widely used survey format. Such surveys have two parts:

an introductory part which explains the distinction between generic trademarks and non-generic trademarks; and
a second part which asks survey respondents to identify a series of trademarks as either generic trademarks or non-generic (i.e., potentially protectable) trademarks.

The Court of Appeals for the Federal Circuit has previously held that such consumer surveys are the “preferred method of proving genericness” while the Court of Appeals for the Third Circuit has opined that such surveys “have become almost de rigueur in litigation over genericness.”

Booking.com Supreme Court Case:

The core issue on appeal before the Supreme Court in the Booking.com case is whether combining a generic term as applied to online hotel reservation services (“BOOKING”) with a generic top-level domain (“.COM”) can result in a trademark (“BOOKING.COM”) which is descriptive and, thus, capable of protection (provided that it has acquired secondary meaning).

Indeed, in its petition to the Supreme Court, the U.S. PTO stated the issue on appeal as follows:

“Whether the addition by an online business of a generic top-level domain (‘.com’) to an otherwise generic term can create a protectable trademark.”

In reviewing this petition, it seems that the U.S. PTO’s core concern is that granting protection over BOOKING.COM may prevent other companies from using the trademark, e.g., in a domain name which ends in “booking.com” such as “lowpricebooking.com”.

Indeed, the thrust of the U.S. PTO’s argument is based on the 1888 case Goodyear’s India Rubber Glove Manufacturing Co. v. Goodyear Rubber Co., 128 U.S. 598, which held that the addition of an entity designation such as “Company” to a generic term cannot create a protectable trademark.

The U.S. PTO reasons that merely adding “.com” to the end of an otherwise generic term is analogous to adding “Inc.” or “Company” to the end of an otherwise generic term. Thus, something like GROCERY STORE, INC. as applied to a grocery store would be just as unprotectable as something like BOOKING.COM as applied to an online hotel booking company. To this end, the U.S. PTO urges the Supreme Court to take the position that – as a matter of law – “Generic.com” or “Generic, Inc.” type-trademarks are similarly incapable of protection.

In its well-written response brief, Booking.com urges the Supreme Court to instead adopt the “primary significance” test used in this case by the Court of Appeals for the Fourth Circuit (which test the Supreme Court itself first articulated in Kellogg Co. v. National Biscuit Co., 305 U.S. 111 (1938)). Under this test, the Supreme Court would avoid making a bright-line rule to address the use of generic top-level domain names. Instead, the focus would become whether consumers believe that a trademark as a whole signifies either:

an entire category of goods / services (i.e., a generic trademark); or
merely one particular source of goods / services (i.e., a non-generic trademark).

In support of this argument, Booking.com raises a number of compelling additional arguments, including that:

Booking.com’s “Teflon” survey indicated that 74.8 percent of respondents identified BOOKING.COM as a brand name;
85 foreign jurisdictions have registered BOOKING.COM as a trademark (including the E.U., the U.K., Australia and New Zealand which do not register non-distinctive trademarks);
a trademark registration is necessary to prevent brick-and-mortar competitors (e.g., a competitor who opens a “Booking.com” travel agency in a local shopping mall); and
the position taken by the U.S. PTO in this case is inconsistent with – and would vitiate the rights of – numerous issued trademark registrations which combine a generic term with a generic top-level domain including: DATING.COM, TICKETS.COM, CONCERT.COM, WEATHER.COM, RESTAURANT.COM, FLIGHTS.COM, KARAOKE.COM, CRUISE.COM, RENTALS.COM, RENTALHOUSES.COM, HOMES.COM, BABYSHOWER.COM, CARE.COM, ANCESTRY.COM, GENEALOGY.COM, GOLF.COM, WORKOUT.COM and LAW.COM.

Conclusion:

We believe that this is a “close case.” On the one hand, the reasoning in the Goodyear case – while over a hundred years old and predating the Lanham Act – remains compelling. On the other hand, the arguments raised by Booking.com are equally compelling and seem more relevant in the internet age.

Based on the arguments presented thus far, we believe that the Supreme Court will likely find in favor of Booking.com, i.e., that the Supreme Court will uphold the decision by the Court of Appeals for the Fourth Circuit. In large part, we believe that the Supreme Court will so rule: (i) based on the important distinctions presented by the internet; and (ii) even more significantly, because to do otherwise would throw in doubt the validity of all of the other trademark registrations which combine a generic term with a generic top-level domain which: (a) were granted by the U.S. PTO; and (b) in connection with which the U.S. PTO has given no indication that it intends to reverse course and take corrective action, e.g., by cancelling the same.

Frankly, we believe consumers recognize that well known domain names which combine a generic term with a generic top-level domain – like food.com, wine.com or business.com – are associated with a particular owner, and that the value that has been built up in such domain names over time and, often, at great expense, merits protection.

Finally, we also believe that the Supreme Court will be hesitant to draw a bright line involving domain names which combine a generic term with a generic top level domain. Rather, we think it is more likely that the Supreme Court will:

allow for the possibility of protecting trademarks such as BOOKING.COM in certain circumstances; while
stressing that such circumstances are rare.

We further suspect that the Supreme Court will discuss the very significant efforts needed to acquire secondary meaning in connection with “generic.com” type domain names and will point to the billions of dollars which Booking.com spent in advertising as sufficient to show secondary meaning in this case.

We will continue monitoring this case, and will report on the Supreme Court’s ruling once it is issued.

If you or your business is in need of a domain name, a trademark registration or both, call us today for your free consultation.