On June 30, 2020, the Supreme Court issued its decision in United States Patent and Trademark Office v. Booking.Com B.V., 591 U.S. ___, 140 S. Ct. 2298 (2020), a litigation reviewed in these posts on March 12, 2020. Our review asked this question: “When a generic, second-level domain and a top-level domain are combined, is that combination itself generic and unprotectable under the Lanham Act?” The Court has now given its answer: “Not always.”
I – The Opinion of the Court
Justice Ginsburg delivered the opinion of the Court in which the Chief Justice and Justices Thomas, Alito, Sotomayor, Kagan, Gorsuch and Kavanaugh joined. Justice Sotomayor filed a brief concurring opinion, while Justice Breyer was alone in dissent.
The Court rejected the PTO’s “nearly per se rule that would render ‘Booking.com’ ineligible for registration regardless of specific evidence of consumer perception.” Booking.com, 591 U.S., at ___, 140 S. Ct. at 2305. In doing so, the Court identified several problems with the PTO’s insistence that virtually every “generic.com” term must be treated as generic for registration purposes.
As an initial matter, the PTO had not reconciled the rule it advanced with its own past practice. Specifically, on its Principal Register, the agency had registered ART.COM, an online store for, among other things, “art prints, original art, [and] art reproductions[.]” Similarly, on its Supplemental Register, the PTO had approved DATING.COM, a dating service. Booking.com, 591 U.S., at ___, 140 S. Ct. at 2305.
Next, the Court found that the PTO had a mistaken understanding of Goodyear’s India Rubber Glove Mfg. Co. v. Goodyear Rubber Co., 128 U.S. 598 (1888), a case on which the agency relied heavily. In Goodyear, the Court held that “the term ‘Goodyear Rubber’ could not serve as a trademark because it referred, in those days, to ‘well-known classes of goods produced by the process known as Goodyear’s invention.” Booking.com, 591 U.S., at ___, 140 S. Ct. at 2305. Moreover, the Goodyear court noted, adding the word “Company” to the term “only indicates that parties have formed an association or partnership to deal in such goods, either to produce or to sell them.” Goodyear Rubber Co., 128 U.S., at 602. For the PTO, the same was true as to the addition of “.com” to the generic term “Booking.”
But the majority saw things differently:
A ‘generic.com’ term might also convey to consumers a source-identifying characteristic: an association with a particular website. As the PTO and the dissent elsewhere acknowledge, 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.’ [. . .] Thus, consumers could understand a given ‘generic.com’ term to describe the corresponding website or to identify the website’s proprietor.
Booking.com, 591 U.S., at ___,140 S. Ct. at 2306 (citations omitted).
In the Court’s view, the PTO misunderstood Goodyear in a second way: The case did not announce a rule that generic marks are disqualified from trademark protection as a matter of law regardless of how they are understood by consumers. Id., at __, 140 S. Ct. at 2306. Rather,
Goodyear reflects a more modest principle harmonious with Congress’ subsequent enactment [of the Lanham Act]: A compound of generic elements is generic if the combination yields no additional meaning to consumers capable of distinguishing the goods or services.
Id., at ___, 140 S. Ct. at 2306.
The PTO advanced several arguments suggesting that a ruling in Booking.com’s favor would be improvident or unnecessary, but none gained traction with the majority. To the argument that trademark protection for Booking.com “could exclude or inhibit competitors from using the term ‘booking’ or adopting domain names like ‘ebooking.com’ or ‘hotel-booking.com,’ ” the Court responded that such a concern “attends any descriptive mark,” and existing law “hems in” such marks by, among other things, requiring their holders to show a likelihood of consumer confusion before a comparable mark will be denied registration or treated as infringing. Id., at ___, 140 S. Ct. at 2307.
As for the PTO’s “doubts that owners of ‘generic.com’ brands need trademark protection in addition to [their] existing competitive advantages” flowing from sole ownership of an easy-to-find website, the Court’s short answer was that these advantages are not disqualifying: “The Lanham Act permits registration nonetheless. See [15 U.S.C.] § 1052(e), (f).” Id., at ___, 140 S. Ct. at 2308.
Finally, the PTO argued, even if Booking.com is generic, “unfair-competition law could prevent others from passing off their services as Booking.com’s.” Id. (citations omitted). In response, the Court noted that the protections of federal registration are greater than those associated with unfair-competition law (“unfair-competition law would oblige competitor at most to ‘make more of an effort’ to reduce confusion, not to cease marketing its product using the disputed term”). Id., at ___, 140 S. Ct. at 2308. The owner of a generic mark that has acquired secondary meaning thus has good reason to secure Federal registration.
II – Justice Breyer’s Dissent
Justice Breyer’s dissent is grounded in both trademark doctrine and policy. As for the former, he found the proposed mark fully–indeed classically–generic: “The company’s name informs the consumer of the basic nature of its business and nothing more.” Id., at ___, 140 S. Ct. at 2309 (Breyer, J., dissenting). But, he added, “Trademark law does not protect generic terms, meaning terms that do no more than name the product or service itself.” Id.
For Justice Breyer, the business of trademark law is the protection of “distinctive marks–words, names, symbols and the like that distinguish a particular artisan’s goods from those of others.” Id. (internal quotation marks and citation omitted). Generic terms, on the other hand, are ineligible for the benefits of trademark law, even if the mark “‘ha[s] become identified with a first user’ in the minds of the consuming public. CES Publishing Corp. v. St. Regis Publications, Inc., 531 F.2d 11, 13 (CA 2 1975) (Friendly, J.).” Id., at ___, 140 S. Ct. at 2310.
As for the majority’s view that the 1946 Lanham Act effected a fundamental change in the treatment of generic terms, Justice Breyer disagreed:
It is true that the Lanham Act altered the common law in certain important respects. Most significantly, it extended trademark protection to descriptive marks that have acquired secondary meaning. But it did not disturb the basic principle that generic terms are ineligible for trademark protection, and nothing in the Act suggests that Congress intended to overturn Goodyear.
Id., at ___, 140 S. Ct. at 2311 (citation omitted).
With existing law and precedent no longer a barrier to the registration of generic.com terms, what will determine their eligibility? For the most part, it will depend on the survey evidence offered to show that consumers associate the term with a particular source of the product or service. If the survey evidence is effective, registration is likely to follow.
What’s wrong with such a regime? For one thing, as Justice Breyer demonstrates, survey evidence is an unreliable predictor of genericness. Id., at ___, 140 S. Ct. at 2313. This is so because surveys often measure only whether consumers associate a term with a particular source. But the required showing anticipates more. A generic term only acquires secondary meaning when “its primary significance . . . in the minds of the consuming public is not the product but the producer.” Kellogg Co. v. Nat. Biscuit Co., 305 U.S. 111, 118 (1938) (Brandeis, J.).
There are other concerns. One has to do with the fact that the majority’s approach “‘[d]iscard[s] the predictable and clear line rule of the [PTO] and the Federal Circuit’ in favor of ‘a nebulous and unpredictable zone of generic name and top level domain combinations that somehow become protectable marks when accompanied by favorable survey results.’ ” Booking.com, 591 U.S., at ___, 140 S. Ct. at 2314 (Breyer, J., dissenting) (quoting 1 McCarthy on Trademarks and Unfair Competition § 7:17.50 (5th ed. 2020)).
Finally, Justice Breyer refers to the “serious anticompetitive consequences” posed by granting trademark protection to businesses bearing generic.com names. Id., at ___, 140 S. Ct. at 2314. After all, the owners of such domains already enjoy a number of advantages over competitors with distinctively named businesses. For example, their names are easy to remember and, because those names “convey the nature of the business, the owner needs to expend less effort and expense educating consumers.” Id. Further, a businesses bearing a generic name may create the impression that it is a more authoritative and/or trustworthy source for its goods or services. Id. “These advantages make it harder for distinctively named businesses to compete.” Id.
Some of the competitive advantages inuring to the owners of generic.com marks are unique to the Internet and, again, independent of trademark protection. Most significantly, “domain name ownership confers automatic exclusivity.” Id. Justice Breyer uses this example to make the point: “Multiple brick-and-mortar companies could style themselves ‘The Wine Company,’ but there can be only one ‘wine.com.’ ” Id., at ___, 140 S. Ct. at 2314-15.
There is a second benefit to generic.com domain owners unique to the Internet: they are easy to find. A consumer looking to purchase wine can perform a keyword search and be directed to wine.com. Alternatively, such a consumer might type “wine.com” into his browser in anticipation of finding a website selling wine.
In Justice Breyer’s view, these anti-competitive advantages of generic.com domain owners are substantially enhanced by the addition of Federal trademark protection “allowing them to exclude others from using similar domain names.” For example, Federal registration will allow Booking.com “to threaten trademark lawsuits against competitors using domains such as ‘Bookings.com,’ ‘eBooking.com,’ ‘Booker.com,’ or ‘Bookit.com.’ ” Id., at ___, 140 S. Ct. at 2315.
Justice Breyer’s dissent ends with this summary of his concern:
. . . I fear that today’s decision will lead to a proliferation of ‘generic.com’ marks, granting their owners a monopoly over a zone of useful, easy-to-remember domains. This result would tend to inhibit, rather than to promote, free competition in online commerce.
Id., at ___, 140 S. Ct. at 2315-16.
III – Comment
Despite its seemingly narrow holding (“In circumstances like those this case presents, a ‘generic.com’ term is not generic and can be eligible for federal trademark registration.”), the Court’s opinion substantially reorders the legal landscape as to an important and growing segment of generic marks. The view, for example, that Goodyear had been unaffected by the Lanham Act and that it continued to provide precedent for denying registration to generic.com marks is now discredited. Similarly, the belief that a clear-line rule stands in the way of registration for generic.com marks can no longer be held with confidence.
Indeed, the idea that the most desirable of potential marks are those positioned closest to the fanciful end of the distinctiveness spectrum may have become quaint. Those marks, after all, will not enjoy the same competitive advantages that accompany generic.com brands matched with an Internet domain. In other words, in a competitive, Internet-based environment, bland and generic may have become preferable to arbitrary and fanciful.
– Anthony F. Muri, August 26, 2020