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The Impact Of The U.S. Supreme Court’s Decision In BOOKING.COM

On June 30, 2020, the U.S. Supreme Court issued a long-awaited significant decision in trademark law. Justice Ginsburg wrote the majority opinion. The United States Patent and Trademark Office (“USPTO”) refused registration to the applicant, Booking.com B.V. (“Booking.com”) on several trademark applications involving services for travel reservations in classes 39 and 43.  The USPTO concluded that BOOKING.COM was a generic name for online hotel reservation services. The case made its way from the District Court, to the Fourth Circuit and finally to the U.S. Supreme Court.

The U.S. District Court for the Eastern District of Virginia ruled that BOOKING.COM was not generic, but descriptive of booking services for hotel reservations. It also held that BOOKING.COM acquired secondary meaning for hotel services. The USPTO only appealed the District Court’s holding that BOOKING.COM was not generic. The Court of Appeals for the Fourth Circuit affirmed the District Court’s decision, and the USPTO petitioned the Supreme Court to review the decision.

A generic name is one that is the name of the class of products or services, and therefore will be refused trademark registration at the USPTO. The parties did not dispute that the term “booking” was generic for hotel reservation services. The USPTO’s decision was based on its position that a generic term added to a “.com” will not change the meaning of the term, it will still be generic. The U.S. Supreme Court disagreed. The Supreme Court pointed out that consumers do not perceive the term BOOKING.COM to indicate hotel services as a class. The relevant meaning of a term is its meaning to consumers. In addition, since the term BOOKING.COM is a compound term, its meaning must be evaluated from the perspective of the mark as a whole and not in its isolated parts. Lastly, the mark must be able to function as a source indicator and distinguish Booking.com’s services from the services of a competitor.

Although, the USPTO was enunciating a per se rule that the combination of a generic term with a “.com” (or other top-level domain) would be generic, its previous practice and actions did not support this far reaching policy. Justice Ginsburg pointed out several registrations on the Trademark Register in conflict with this general rule, U.S. RN 3,601,346 ART.COM on the Principal Register for  “[o]nline retail store services” offering “art prints, original art, [and] art reproductions”), and U.S. RN 2,580,467 DATING.COM on the Supplemental Register for dating services. The Supreme Court could not find policies or precedents to support this sweeping rule.

It reasoned that an association with a “.com” will communicate to the users or consumers a source identifying characteristic, “an association with a particular website”. Since consumers are now very familiar with the domain name system, and inherent to this system is the fact that only one source or entity can operate a particular domain name at one time, this means a term such as BOOKING.COM can function as a source indicator. The U.S. Supreme Court clearly stated that its decision did not create a bold rule that any generic added to a top-level domain would be perceived as nongeneric. The Supreme Court stressed that the determination of whether a term is generic will be contingent on whether consumers perceive the term as the name of a class of goods or services or whether the term can act to distinguish the source from other members within that class.

The U.S. Supreme Court was not concerned about a monopoly over the term “booking”. The Court explained that BOOKING.COM will be accorded a narrow scope of protection as would any descriptive term. The less distinctive a mark is the fewer instances there will be where a competitor’s use of a similar term will cause confusion in the marketplace. Moreover, the Court stated that competitors can rely on a fair use defense for descriptive terms. The term “booking” can still be used by a competitor to describe its services for hotel reservations. In the end, the U.S. Supreme Court affirmed the Fourth Circuit’s decision to allow BOOKING.COM to register. Certainly, this decision will have ripple effects where others will now rush to register descriptive or generic terms added to a top-level domain. It will be interesting to monitor the Trademark Register for this new trend of cases. If you have trademark registration questions, please contact the firm for a courtesy consultation.

 

 

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