The U.S. Supreme Court has ruled that Booking.com B.V., the owner of the hotel-reservation website of the same name, is entitled to register the mark BOOKING.COM with the United States Patent and Trademark Office (“USPTO”). In doing so, the Court rejected the USPTO’s nearly per se rule that adding “.com” to a generic term can never create a distinctive and registrable mark. The Court clarified that the determination of whether a term is generic depends on whether consumers perceive the term as generic.
Generic Terms Are Not Eligible for Trademark Protection and Cannot Be Registered
A generic term names a class of goods or services. The market requires that businesses and consumers have the ability to identify goods and services by common names—e.g., cell phone and HVAC repair. As such, federal trademark law does not permit a party to protect—and, thus, restrict others from using—generic terms. Unlike descriptive terms, which may acquire distinctiveness after a period of prominent use (think, AMERICAN AIRLINES), generic terms are never entitled to protection no matter how much the public comes to associate a term with a particular user.
USPTO Rule: Generic Term + “.com” = Generic Composite
In recent years, the USPTO has viewed the use of a generic top-level domain (e.g., “.com,” “.net,” and “.org”) (“gTLD”) as indication of a location on the internet, generally serving no source-identifying function. As such, the USPTO adopted a near per se rule that combining a gTLD with a generic term creates a generic composite that can never be subject to protection or registration. The USPTO relied on precedent holding that the addition of the term “Company” to a generic term (e.g., Wine Company) does nothing more than express the generic concept of a company dealing in that good or service. Similarly, the USPTO reasoned, appending “.com” to a generic term does nothing more than express the generic concept that the owner operates a website related to those goods or services. Thus, with some exceptions, the USPTO had almost uniformly refused applications to register marks consisting of a <generic.com>.
For years, Booking.com B.V. (“Booking”) had invested substantial resources to promote its hotel-reservation services under the claimed mark BOOKING.COM. Nevertheless, when it applied to register the mark, the USPTO repeatedly refused registration on grounds the mark was generic, in accordance with its standard rule.
Booking appealed to the Eastern District of Virginia, where it presented survey evidence demonstrating that consumers recognize the mark as designating Booking as the source of hotel-reservation services as opposed to merely a class of services. The district court ruled in Booking’s favor on grounds the genericness inquiry should focus on whether the consuming public considers the mark generic, and on grounds the evidence demonstrated consumers considered BOOKING.COM a source-identifier, not merely a class of hotel-reservation services.
In an effort to preserve its rule, the USPTO appealed to the Fourth Circuit, which affirmed the district court, ruling that the term was not generic and was entitled to registration.
The USPTO then appealed to the U.S. Supreme Court. Both Booking and the USPTO agreed the term “booking” was generic for hotel-reservation services. But the parties disagreed that BOOKING.COM was generic as a mere result of combining a generic term with a gTLD. The USPTO challenged only the determination that BOOKING.COM was generic; it did not contest Booking’s evidence that consumers viewed Booking as the source of services under the mark. [As an aside, the argument before the Supreme Court made history as the first ever to be held by conference call—the result of precautions taken due to the Covid-19 pandemic.]
In USPTO v. Booking.com B.V., the U.S. Supreme Court affirmed the decisions below, holding that BOOKING.COM was not generic by mere virtue of being a composite of a generic term (“booking”) and a generic top-level domain (“.com”). The test for genericness, the Court concluded, depends on whether consumers perceive the term as the name of a class of goods or services or, instead, as a term capable of distinguishing among constituents of that class. Because consumers did not perceive BOOKING.COM as generic, the term was not generic.
Thus, the Court rejected the USPTO’s rule that a generic term and a generic top-level domain necessarily result in a generic composite. The Court commented that the USPTO’s rule had not been applied so rigidly in the past and, thus, would imperil scores of current registrations—citing registrations for ART.COM and DATING.COM.
The Court was careful to note that it also did not embrace a rule automatically classifying such terms as nongeneric. Rather, the touchstone is consumer perception.
The Booking.com decision represents a sea-change in the treatment of domain names at the USPTO. Where the USPTO had developed a practice of mostly disregarding top-level domains, the decision elevates the inclusion of a top-level domain in a mark to a potential distinguishing feature. This may affect the calculus of determining whether to adopt a mark to include a top-level domain.
Nevertheless, registering a <generic.com> will likely remain a considerable challenge. Booking was only able to achieve registration after incurring substantial marketing expenses, commissioning a successful consumer survey (which can, themselves, be relatively expensive and are regularly discarded due to flaws in design and interpretation), and incurring significant legal expenses fighting for recognition of its rights. While Booking has blazed the trail, the USPTO will continue to require significant marketing expenditures and compelling evidence that consumers do not view the term as generic. And, even if a user is able to amass this necessary substantiation, the endeavor may still require significant legal fees, battling over the specific facts of a case. Thus, an owner of a <generic.com> should not view Booking.com as a windfall, so much as an opportunity to obtain trademark rights where they might not otherwise have been available.