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Sometimes things are just not what they seem on their face. This maxim seems to hold true in the context of trademark law, especially in light of a recent Supreme Court of the United States ruling involving generic trademarks. In United States Patent and Trademark Office v. Booking.com, the nation’s highest 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.” What does this mean? All things considered, the impact will probably be less problematic for more obvious reasons than you may think.
First, some background on generic trademarks will help frame the topic. As I have written many times before (see here and here, for example), trademarks help distinguish one owner’s goods and services from those of another. With respect to the Lanham Act, a federal system of trademark registration was created that was built upon this common-law premise. Under 15 U.S.C. § 1127 of the Lanham Act, trademarks are essentially defined as “any word, name, symbol, or device, or any combination thereof” that is used by a person “to identify and distinguish his or her goods, including a unique product, from those manufactured or sold by others and to indicate the source of the goods, even if that source is unknown.” In essence, a trademark distinguishes the owner’s goods and services from those of another through their use, yet also act as a source identifier of the goods and services. These elements are essential not only to obtain federal registration status, but to maintain, protect, and police such rights. So as a matter of definition, trademarks must distinguish as well as provide an identification of source. As a practical matter, generic trademarks cannot do so.
Why not? Justice Ruth Bader Ginsburg in the majority opinion on this case references the point quite simply:
The more distinctive the mark, the more readily it qualifies for the principal register [in the USPTO]. The most distinctive marks — those that are “‘arbitrary’ (‘Camel’ cigarettes), ‘fanciful’ (‘Kodak’ film), or ‘suggestive’ (‘Tide’ laundry detergent)” — may be placed on the principal register because they are “inherently distinctive.” [citations omitted]. “Descriptive” terms, in contrast, are not eligible for the principal register based on their inherent qualities alone … [because] descriptive terms must achieve significance “in the minds of the public” as identifying the applicant’s goods or services — a quality called “acquired distinctiveness” or “secondary meaning.” [citations omitted]. Without secondary meaning, descriptive terms may be eligible only for the supplemental register.
So only inherently distinctive trademarks qualify for the Principal Register at the USPTO, while descriptive trademarks must acquire secondary meaning and may be relegated to the Supplemental Register until such time as they have “acquired distinctiveness.”
As you may have guessed by now, generic trademarks are a type of descriptive trademark but are so descriptive that they cannot operate to distinguish an owner’s goods or services from those of another, or to otherwise designate the origin of such goods and services. For example, the term “beer” would be considered generic if used to describe a fermented beverage made from water, barley, malt, and yeast because it is a generic name for a type of alcoholic beverage commonly consumed worldwide — it simply does not (and cannot) describe whose beer in and of itself. In sum, a generic trademark describes the class of goods or services itself and no more.
In the present matter, the USPTO refused the attempt by online travel booking site Booking.com to federally register a number of trademark applications for “BOOKING.COM” with the USPTO on such grounds (including on appeal to the Trademark Trial and Appeal Board (TTAB) as the USPTO). In fact, the TTAB ruled that even if “BOOKING.COM” was descriptive and not generic, it is unregistrable because it lacks secondary meaning. Upon review by the U. S. District Court for the Eastern District of Virginia, however, Booking.com introduced additional survey evidence and persuaded the district court to hold that “BOOKING.COM” was not generic because the consuming public “primarily understands that BOOKING.COM does not refer to a genus, rather it is descriptive of services involving ‘booking’ available at that domain name.” The USPTO only appealed the holding that “BOOKING.COM” was not generic to the Fourth Circuit Court of Appeals, which affirmed the ruling. Interestingly, SCOTUS decided to hear the case.
In writing for the majority, Ginsburg stated that the inquiry “turns on whether that term, taken as a whole, signifies to consumers the class of online hotel-reservation services.” SCOTUS held that “BOOKING.COM” did not do so because none of the evidence presented in the lower courts indicated that consumers considered the compound term to be generic of online booking and travel reservations. In fact, SCOTUS rejected the per se rule preferred by the USPTO that every “generic.com” name should be considered a generic composite. Rather than hinder competition, SCOTUS ruled that current trademark law provides an appropriate “hem” on descriptive marks because any assessment of infringement requires consideration of distinctiveness, and even where some confusion may exist, common principles of fair use continue to apply. In other words, these doctrines protect against potential anticompetitiveness and operate as a check on the scope of protection for such marks.
I have seen my share of ”.com” trademarks in law practice, and rather than sound the alarm I find this ruling to be the culmination of a salient point — where evidence shows that the consuming public identifies a descriptive trademark with the trademark owner, it is likely worthy of federal trademark registration. Just adding a domain name extension does not accomplish this fact — there must be sufficient evidence that the consuming public identifies the entire trademark with the trademark owner’s goods and services. I appreciate Justice Stephen Breyer’s concerns in his dissent regarding prior case law and how “Company” or “Inc.” add nothing, but those descriptors are a far cry from a generic top-level domain (gTLD) that helps direct the consumer to an online location separate and distinct from other gTLDs. Maybe I am more market-oriented than others, but from my perspective, it is better to let the evidence determine potential acquired distinctiveness with a generic composite trademark than rely on a per se rule that prohibits it in the entirety.
Whether you agree with this perspective or not, the point here is that using a generic term in a generic composite is inherently risky, and SCOTUS seems persuaded by evidence of consumer recognition in interpreting existing trademark law. Simply placing a generic term with a gTLD will not elevate the generic composite to the ranks of inherently distinctive marks, and acquired distinctiveness (albeit possible) is not guaranteed. I appreciate the lack of a per se rule and other established factors under trademark law — it lets trademark owners assess the risks and act accordingly when it comes to generic composites. Simply put, sometimes generic may not be, well, so generic.
Tom Kulik is an Intellectual Property & Information Technology Partner at the Dallas-based law firm of Scheef & Stone, LLP. In private practice for over 20 years, Tom is a sought-after technology lawyer who uses his industry experience as a former computer systems engineer to creatively counsel and help his clients navigate the complexities of law and technology in their business. News outlets reach out to Tom for his insight, and he has been quoted by national media organizations. Get in touch with Tom on Twitter (@LegalIntangibls) or Facebook (www.facebook.com/technologylawyer), or contact him directly at tom.kulik@solidcounsel.com.