A trademark is a type of intellectual property that allows brand recognition for unique products or services. The Lanham Act is a federal statute that governs trademarks and provides guidelines for trademark registration. Under the Lanham Act, generic terms cannot be registered as trademarks. Since generic terms should be available for all competitors to use to describe their products, trademarks must be distinctive. Allowing a business to trademark a generic term would undermine competition in the free market economy and create a monopoly in a particular industry.
With the rise of online businesses, several companies have applied for trademark protection for a generic term followed by .com. Examples include Weather.com, Law.com, and Booking.com. The decisions rendered by the U.S. Patent and Trademark Office (PTO) have varied; trademarks for Weather.com and Law.com were approved, while a trademark for Booking.com was denied because the PTO found that the term was too generic.
Does the addition of .com to a generic term for an online business create a registerable trademark despite the Lanham Act’s prohibition on trademarking generic terms?
In the case of In re Hotels.com, L.P., the United States Court of Appeals for the Federal Circuit ruled that Hotels.com is not a distinctive term and is merely a generic term that describes hotel reservation services. The evidence that Hotels.com provided was not sufficient to show that .com added to the term “hotels” created a distinctive brand that could be protected under the Lanham Act. Similarly, in In Re Reed Elsevier Properties Inc., the Federal Circuit affirmed the decision of the PTO that Lawyers.com was too generic to trademark. Lawyers.com provides a database of information about law, legal news, and legal services. The court utilized a two-part test, first described in H. Marvin Ginn Corp. v. Int’l Ass’n of Fire Chiefs, Inc., to determine whether or not a mark is considered generic under the Lanham Act. The first part focuses on what specific goods or services are at issue, and the second part assesses whether the particular term is understood by the public to refer primarily to those specific goods or services. Applying this test, Lawyers.com could not be trademarked because the term is not a discrete descriptor for the services provided on the website. The Ninth Circuit issued a similar ruling in the case of Advertise.Com, Inc. v. AOL Advertising, Inc., upholding a PTO decision to deny a trademark to Advertising.com for online advertising services.
Most recently, The Fourth Circuit addressed this issue in the case of U.S. Patent and Trademark Office v. Booking.com B.V. The PTO denied trademark protection to Booking.com, stating that the domain is not distinctive and merely describes online reservation services for hotels, cars, and travel. Booking.com appealed this decision to the U.S. District Court for the Eastern District of Virginia, which reversed the PTO’s decision, stating that the addition of .com converted a generic term into a descriptive term. Additionally, Booking.com provided survey evidence that consumers recognize Booking.com as a brand rather than a category of services. This decision was affirmed by the Fourth Circuit, and certiorari was granted by the U.S. Supreme Court to clarify the circuit split.
The U.S. Supreme Court, which recently heard oral arguments in U.S. Patent and Trademark Office v. Booking.com B.V., will resolve this circuit split. Both the government and Booking.com provided arguments that reflected the concerns of different circuit courts with a focus on the balance between protecting brand identification and the fear of monopolization by one company over a particular industry.
The government argued that the Court’s ruling in Goodyear’s India Rubber Glove v. Goodyear Rubber Co., that combining one generic term with another generic term such as “Company” or “Inc.” does not result in a descriptive term that can be trademarked, should apply in this case. The government also expressed concern about competition and which particular test to apply when evaluating whether or not generic terms should be trademarked. The government cited businesses such as Ebooking.com and Hotelbooking.com that would not be allowed to exist if Booking.com was granted a trademark. Additionally, the government advocated for a consumer-based test to determine whether generic terms should be afforded trademark protection. This test would focus on what a consumer understands a particular term to mean and whether Booking.com’s services could have additional meaning to the consumer. Applying this test allowed the government to assert that there is no additional meaning, and therefore, a trademark should not be granted to Booking.com.
On the other side, Booking.com argued that the “primary significance test” should apply, providing trademark protection to Booking.com because the term represents a brand. The primary significance test allows a term to be classified as descriptive if the term refers to the producer or source of the product rather than the product itself. America Online, Inc. v. AT&T Corp. (4th Cir. 2001). Even though “booking” is a generic term and “.com” is a generic term, the combination of the two terms has significance as a brand to consumers. Booking.com also addressed the issue of a trademark creating a monopoly and asserted that the government provided no evidence that other businesses would be barred. Additionally, Booking.com discussed the international implications of trademark registration in the United States, noting that this trademark has been registered in approximately 80 other countries. Booking.com argued that registration in the United States would further allow the company to protect themselves against spoofing and cyber scams.
The U.S. Supreme Court will rule on this issue soon, providing clarity to the approach that the PTO will take in the future when determining whether general terms added to .com can be trademarked. Resolving this circuit split will guide businesses on how to proceed when seeking brand recognition and protecting their products and services.