SCOTUS Rejects Per Se Rule Against Trademark Protection for Generic.com Terms

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The U.S. Supreme Court has held that a generic word combined with “.com” is entitled to federal trademark registration if consumers perceive the combined mark as nongeneric.  United States Patent & Trademark Office v. Booking.com B. V., No. 19-46, 2020 WL 3518365 (U.S. June 30, 2020).  In an 8-1 decision, the Court held that because Booking.com is not a generic name to consumers, it is not generic, and therefore is eligible for federal trademark registration.  This ruling opens the door for other “generic.com” brands seeking to apply for trademarks, such as Cars.com, Dictionary.com, Newspapers.com and Wine.com. 

The PTO argued that no generic word combined with “.com” should receive trademark reservation.  The PTO’s proposed per se rule derived from a common-law principle applied in Goodyear’s India Rubber Glove Mfg. Co. v. Goodyear Rubber Co., 128 U.S. 598 (1888), that a generic corporate designation added to a generic term does not confer trademark eligibility.  By analogizing “.com” to the word “company,” the PTO had found that “Booking.com” essentially was another way of saying “Booking Company.” 

The Court’s majority opinion rejected this proposed “sweeping rule,” noting that the PTO’s own past practices are inconsistent with the rule it now advances, and that existing registrations—such as “ART.COM” and “DATING.COM”—“would be at risk of cancellation if the PTO’s current view were to prevail.”  The Court struck down the PTO’s attempt to extrapolate from Goodyear to domain names, finding that “[a] ‘generic.com’ term might also convey to consumers a source-identifying characteristic: an association with a particular website.”  

The Court held that the issue of whether a “generic.com” domain name is generic for purposes of federal trademark registration depends on “whether consumers in fact perceive that term, taken as a whole, as the name of a class or, instead, as a term capable of distinguishing among members of the class.”  In dicta, the Court noted that surveys could be helpful evidence of consumer perception. 

Assuaging concerns about monopolization, the Court noted that “only one entity can occupy a particular Internet domain name at a time, so ‘[a] consumer who is familiar with that aspect of the domain-name system can infer that BOOKING.COM refers to some specific entity.’”  Therefore, “consumers could understand a given ‘generic.com’ term to describe the corresponding website or to identify the website’s proprietor.”  As a result, the PTO’s stated categorical rule that “generic.com” terms are incapable of identifying a source could not stand. 

The Court also dismissed the PTO’s concern that granting trademark protection to “generic.com” marks would result in anticompetitive consequences by preventing competitors from using similar domain names, “such as ‘Bookings.com,’ ‘eBooking.com,’ ‘Booker.com,’ or ‘Bookit.com,’” noting that trademark law already protects against the risks of monopolization, and that defenses, such as fair use, are available against infringement claims.

However, the majority’s narrow holding leaves open the issue of how evidence regarding a mark’s significance should be analyzed and weighed.  Justice Sotomayor’s concurrence disagrees with using consumer surveys in order to answer the threshold question of whether a mark is descriptive or generic.  As the sole dissenter, Justice Breyer similarly criticized the Court’s majority for putting too much emphasis on consumer surveys, which he opined were of limited value.  Breyer equated the “.com” designation with traditional, clearly generic designations like “Corp.” and “Corporation.”  He warned that owners of “generic.com” marks would obtain a monopoly and stifle smaller companies that did not have equal resources to litigate expensive trademark lawsuits.

Indeed, trademark litigation can be expensive and complicated, and effectively cost-prohibitive for small entities operating in the same field under similar names that share a generic component.  While Booking.com said at oral argument that it would not use its registration to pursue an entity like ebooking.com, time will tell if others do.

The Court’s decision in Booking.com will likely affect the way owners of “generic.com” brands select business names.  While significant consumer perception evidence will be needed to demonstrate that the public recognizes an otherwise generic term as a brand, and not simply as a website that offers the services described, those who use their domain names as standalone brand names can be assured that if they invest in those names enough, they may one day enjoy the benefits of trademark registration. 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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