The U.S. Supreme Court ruled in favor of online booking giant Booking.com on Tuesday in a trademark law case which could result in a much-changed landscape for intellectual property protections.
Justice Ruth Bader Ginsburg authored the 8-1 decision and was joined by all of the court’s conservatives. Only Justice Stephen Breyer disagreed with the ruling by authoring a lengthy dissent. Justice Sonia Sotomayor attempted to thread the needle between her liberal colleagues; she concurred in the judgment but affixed two observations in dicta which sought to cabin the decision’s reach.
The issue in the case stylized as Patent and Trademark Office v. Booking.com B.V. was whether or not adding “.com” to a generic word like “Booking” can render the resulting term eligible for federal trademark protection by transforming that resulting combination into something legally non-generic. The court ruled that it could.
Under trademark law, generic business names are generally not eligible for the suite of protections provided under the national trademark regime–a system created by the Lanham Act of 1946.
The general theory behind trademarks is to protect consumers from product confusion when they shop and make purchases. It is the legal reason why customers know where to buy Big Macs and Whoppers — or Cokes and Pepsis — and how those products will taste. The words and logos on cans of soda and on the sides of restaurant buildings convey that information with the force of law. Secondarily, there are concerns about genuinely-accumulated business goodwill being frustrated by so-called “free-riders.” In general terms, the trademark system provides certain protections to businesses who have actually used their trade name for awhile and to those who file registrations with the Patent and Trademark Office (PTO).
Federal law has a system for sifting through registrations which provides that requested marks must make clear that “the goods of the applicant may be distinguished from the goods of others.”
Case law decided by the nation’s high court has substantially elaborated on the applicability of those protections by establishing an increasing spectrum of distinctiveness for marks that are “(1) generic; (2) descriptive; (3) suggestive; (4) arbitrary; or (5) fanciful.”
The higher the number, the more likely the PTO is to grant a trademark. But generic terms are never afforded such protections. The determination of whether or not a term is generic is generally, though certainly not always, dispositive in such an inquiry.
Here, Booking.com applied for a registration and was quickly rejected by the PTO on the basis that the word “booking” is a generic term for hotel-reservation services. Therefore, the PTO argued, simply adding “.com” was little more than a composite of the same generic term.
Booking.com asked a district court for review, and the PTO was overruled. The PTO appealed and the Fourth Circuit Court of Appeals affirmed the lower court’s ruling in favor of the website.
“Having determined that ‘Booking.com’ is descriptive, the District Court additionally found that the term has acquired secondary meaning as to hotel-reservation services,” Ginsburg noted. “For those services, the District Court therefore concluded, Booking.com’s marks meet the distinctiveness requirement for registration.”
An additional feature of trademark law is the above-mentioned concept of “secondary meaning” which can make a descriptive mark possibly distinctive enough to qualify for Lanham Act protections. Here, the various courts determined that Booking.com has, in fact, acquired secondary meaning.
Justice Ginsburg explains, at length:
[W]hether “Booking.com” is generic turns on whether that term, taken as a whole, signifies to consumers the class of online hotel-reservation services. Thus, if “Booking.com” were generic, we might expect consumers to understand Travelocity—another such service—to be a “Booking.com.” 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.
Consumers do not in fact perceive the term “Booking.com” that way…
That should resolve this case: Because “Booking.com” is not a generic name to consumers, it is not generic.
But that didn’t resolve things because the PTO went a bit further by asking for the court to sign off on a general rule that foreclose against trademark protections for generic terms combined with generic internet domains.
The government invoked long-settled case law used to refuse such trademarks: “no matter how much money and effort the user of a generic term has poured into promoting the sale of its merchandise and what success it has achieved in securing public identification, it cannot deprive competing manufacturers of the product of the right to call an article by its name.”
“[T]he PTO urges a nearly per se rule that would render ‘Booking.com’ ineligible for registration regardless of specific evidence of consumer perception,” the majority opinion explains. “In the PTO’s view, which the dissent embraces, when a generic term is combined with a generic top-level domain like ‘.com,’ the resulting combination is generic. In other words, every ‘generic.com’ term is generic according to the PTO, absent exceptional circumstances.”
Ginsburg dismissed the PTO’s request for such a rule–but also declined to create a new rule either.
“While we reject the rule proffered by the PTO that ‘generic.com’ terms are generic names, we do not embrace a rule automatically classifying such terms as nongeneric,” she wrote. “Whether any given ‘generic.com’ term is generic, we hold, 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.”
Justice Sotomayor’s concurrence disagrees with using consumer surveys in order to answer the threshold question of whether a trade name is generic or a descriptive mark. Interestingly, she adds that the district court may have, in fact, gotten the whole thing wrong in the first place by not relying on the appropriate sort of evidence–but notes that the high court was not called to answer that question.
In dissent, Breyer offered a tidy summary of his position:
What is Booking.com? To answer this question, one need only consult the term itself. Respondent 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 root of my disagreement with the majority.
Trademark law does not protect generic terms, meaning terms that do no more than name the product or service itself. This principle 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. Today, the Court holds that the addition of “.com” to an otherwise generic term, such as “booking,” can yield a protectable trademark. Because I believe this result is inconsistent with trademark principles and sound trademark policy, I respectfully dissent.
[image via Sarah Silbiger/Getty Images]
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