On Monday, we listened in real time to the livestreamed Supreme Court oral arguments in the trademark registration case United States Patent and Trademark Office v. Booking.com B.V. Because of COVID-19, the arguments were done telephonically, but with the added twist of a live broadcast.
The event itself was remarkable, considering the impact of the pandemic on our justice system. There appeared to be a few issues of finding the “unmute” button and a few lines of garbled speech, but otherwise the proceeding flowed in a clear and orderly fashion. Chief Justice Roberts passed the virtual microphone from the most senior to the most junior justices to give each a turn at questioning. Even Justice Thomas, who rarely speaks at the in-person oral arguments, asked multiple questions.
The issue in the case is “[w]hether, when the Lanham Act states generic terms may not be registered as trademarks, the addition by an online business of a generic top-level domain (‘.com’) to an otherwise generic term can create a protectable trademark.”
Here, everyone agrees that “booking” is generic for what Booking.com does – as Booking.com itself touts, it is “the World’s #1 Choice for Booking Accommodations.” The term booking is generic, but Booking.com argues that through advertising expenditures, consumer surveys and other evidence gathered over time, customers recognize the combination of booking and .com as a brand name: Booking.com.
Every domain name is unique – there can be only one internet protocol address assigned to any given letter string. The definition of a trademark is a word that identifies goods or services as emanating from a single source. Certain justices, including Justice Breyer, were concerned that every domain name composed of a generic term with .com could, when used also as the name of the business offering goods and services on the internet, be monopolized to the detriment of competitors. The respondent, Booking.com, argued that the government’s position that such generic-formed domain names never can be exclusive trademarks formed a per se rule that ignored the instances in which parties had proven to the U.S. Patent and Trademark Office (USPTO) that the public recognizes some of those names as indicators of source.
The justices questioned whether the Goodyear Co. v. Goodyear Rubber Co., 128 U.S. 598 (1888) Supreme Court ruling is still viable law. The USTPO relied heavily on the Goodyear case. That case provided a categorical rule that the combination of a generic term (i.e., one that identifies the goods or services offered) with a generic term like “company” cannot be transformed into a protectable trademark. With .com being analogous to company, as the government argued, the categorical rule applies here. The term booking.com would remain a generic term even if consumers currently view the primary significance of Booking.com as a brand.
The Lanham Act, passed in 1946, was pre-internet era, and the justices questioned whether the “primary significance” test added to Section 1064 in 1984 to govern cancellation of an already registered mark that becomes generic applies when deciding whether a term is generic at the time of application for it as a trademark. The legislative history of Section 1064 makes clear that the language was intended not to “create new law or establish new standards, but rather [to] reaffirm and clarif[y] the established principles of trademark law” that existed before. S. Rep. 98-627 (1984).
Many of the questions the justices asked related to what factors one might consider in determining whether a term such as “generic.com” has crossed the threshold into being a descriptive term and whether existing law adequately balances competing interests. A descriptive term can acquire distinctiveness in the minds of consumers as designating a single source of certain goods and services. With that acquired distinctiveness, the term becomes eligible for registration on the Principal Register. It was suggested that the existing likelihood of confusion analysis would corral presumptively weak generic-formed .com marks to a narrow band of protection that allows competitive brands, like “e-booking.com,” to flourish without causing consumer confusion.
With the evidence that consumers recognize Booking.com as a brand name unchallenged on appeal, the justices queried whether it would be sufficient for Booking.com to protect its rights under unfair competition theories. Booking.com argued that it needs a registration to help it enforce rights accorded to owners of registrations, such as in rem proceedings against counterfeiters (who by definition are infringers of registered trademarks). Registrations also assist in fighting cybersquatters, spoofers and phishers.
This was the first time in history that modern technology facilitated live streaming of the oral argument before our venerable Supreme Court. During this internet era, the Supreme Court must now consider the intersection of intellectual property rights and competition in the context of domain names created from generic terms. With so many consumers unable to go to brick-and-mortar stores during this pandemic and instead having to buy goods and services over the internet, the issue is particularly poignant.