INTELLIGENCE Scores SCOTUS Victory in Generic Term Battle with the USPTO

On June 30th, the U.S. Supreme Court affirmed the Fourth Circuit’s decision in an 8-1 decision, rejecting the U.S. Patent and Trademark Office’s (PTO) contention that the term “” is generic and thus ineligible for federal trademark registration. The Court held that because “” is distinguishable to consumers from a class of online hotel-reservation services, it cannot be considered a generic term. The Court rejected the PTO’s argument that adding “.com” to a generic term conveys no distinguishable meaning from one provider to another. Justice Ginsburg, writing for the majority, found that “only one entity can occupy a particular Internet domain at a time, so ‘[a] consumer who is familiar with that aspect of the domain-name system can infer that refers to some specific entity.’”

Generally, for a mark to be eligible for protection under the Lanham Act, a mark must distinguish the goods or services of the applicant from others’ goods or services. If the mark at issue is descriptive (meaning that it merely describes the goods or services), it must acquire distinctiveness in the minds of the public in order to be eligible for federal protection. The Supreme Court in its opinion noted that generic marks that only describe a class of goods or services are “incapable of ‘distinguish[ing] [one producer’s goods] from the goods of others’” and are thus ineligible for protection. The PTO argued that the term “” is generic, asserting that “‘customers would understand the term primarily to refer to an online registration service for travel, tours, and lodgings.’” The Court disagreed.

In concluding that the mark was not generic and eligible for trademark protection, the Court first explained that a generic term “names a ‘class’ of goods or services, rather than any particular feature” of that class.” The Court additionally noted that with respect to compound terms, the term must be viewed “as a whole” when analyzing whether the mark has acquired distinctiveness or secondary meaning. And lastly, the Court noted that that distinctiveness of mark will be determined by the term’s “meaning to consumers.” In its analysis, the Court referred to the intent behind the Lanham Act, explaining that consumer perception is of primary significance in determining a mark’s distinctiveness or genericism. Thus, the Court explained that, “if ‘’ were generic, we might expect consumers to understand Travelocity—another such service—to be a ‘’” In support of this, the Court noted that if the “” mark were generic, then “a consumer . . . could ask a frequent traveler to name her favorite ‘’ provider.” The Court found no such evidence that consumers perceived “” mark this way.

The Court also disagreed with the PTO’s separate distinctiveness analysis of “Booking” and “.com,” finding that the analysis should have only been applied to the term as a whole. Relying on the Goodyear1 case, the PTO argued that the addition of a term such as “Company” or “Inc.” to a generic term does not create any protectable meaning for the mark because it “‘only indicates that parties have formed an association or partnership to deal in such goods.” In response, the Court noted that this type of addition of a term relating to the association or partnership of a company does not necessarily apply to “” terms, however. Notably, the Court found that a consumer could, in fact, view a “” term to be a source-identifying characteristic and may be able to infer that “” referred to “‘some specific entity.’”

Additionally, the Court rejected the PTO’s concerns that a “” trademark would prevent competitors from using the term “booking,” explaining that “a competitor’s use does not infringe a mark unless it is likely to confuse consumers.” Additionally, the court elaborated that even where there may be consumer confusion, the classic fair use doctrine protects competitors from liability where a descriptive term is used “‘fairly and in good faith’ and ‘otherwise than as a mark,’ merely to describe [their] own goods.”

Justice Breyer, the sole dissenter, disagreed with the notion that the Lanham Act “‘repudiated Goodyear and its ilk.’” He contended that the Lanham Act, while extending trademark protection to descriptive marks with acquired distinctiveness, did not change the principle that generic terms are ineligible for trademark protection: “[l]ike the corporate designations at issue in Goodyear, a top-level domain such as ‘.com’ has no capacity to identify and distinguish the source of goods or services.” He also contended that by allowing for registration of “” marks, owners of these marks would be able to threaten lawsuits against competitors. In conclusion, he stated “[b]y making such terms eligible for trademark protection, I fear that today’s decision will lead to a proliferation of ‘’ marks, granting their owners a monopoly over a zone of useful, easy-to-remember domains.”

Ultimately, the PTO may no longer, as a rule, determine that combining a generic term with “.com” automatically renders the compound term generic. Where distinctiveness has been acquired through consumer perception of the mark at issue, these compound marks may very well be eligible for trademark protection. This decision opens a new door to federal trademark registration for brands that choose to market their product names and domain names simultaneously, as has done.

1 Goodyear’s India Rubber Glove Mfg. Co. v. Goodyear Rubber Co., 128 U.S. 598 (1888).