Shashi Shekhar Misra, Campus Law Centre, University of Delhi
The raison d’être of a trademark is its inherent ability to help distinguish and differentiate. In addition to assisting a consumer in choosing the intended good or service, a distinctive trademark also serves as an assurance of quality (associated with the respective trader/proprietor) and as a source identifier of the good or service. The discharge of these essential functions by a trademark makes it a vital component of any commercial enterprise. It is therefore hardly surprising that the first ever trade mark-related legislation was enacted nearly eight centuries ago in 1266 by British Parliament (The Bakers’ Marking Law) which made it mandatory for every commercial baker to distinctively mark the bread he/she baked. The singular importance that proprietors have always attached to trademarks is anecdotally evident from the intriguing story of one of the oldest registered trademarks in the world (now owned by one of the largest breweries in the UK), the ‘Bass Ale’ red triangle logo/device. In 1876, when registrations began in the United Kingdom under its first trademark registration law (Trade Marks Registration Act, 1875), Bass & Co. sent an employee to wait overnight outside the registrar’s office the day before registration was to begin to be the first in line to register their trademark. Historicity aside, trademarks are arguably the visual (now even audio or olfactory) personification of a commercial enterprise and hence cannot exist in any other way than as distinctive and unique. To call commonplace and/or generic terms a ‘trademark’ is a misnomer as such ‘trademarks’ can neither perform any of the above commercial functions nor provide the proprietor any legal remedy.
On June 30, 2020, the Supreme Court of the United States (hereinafter “SC”) granted statutory trademark protection to the domain name “Booking.com”. The judgment, pronounced by a majority of 8-1 (Justice Stephen Breyer delivered a much-needed dissent), was the culmination of a series of litigations which began when the US Patents and Trademark Office (hereinafter “USPTO”) initially declined trademark protection to the said domain name on the ground that it was generic. The SC based its decision primarily on the reasoning that a term is generic only if it so in the eyes of the consumer.
This article attempts to critically discuss the repercussions of this judgment and the reasoning that it is based on. The article will, inter alia, try to dwell on what this judgment means for domain name trademarks in the internet age and its impact on the eligibility of generic trademarks for statutory registration. In delineating the said repercussions and implications, the article assumes that this judgment of the Supreme Court of the United States will have persuasive value in similar trademark regimes around the world. Since the article intends to discuss the impact of this landmark judgment on trademark law in general, it will not refer to case laws of specific countries but will instead rely on generally accepted principles of trademark law. The article will employ a mixture of case comment analysis and blog post-style narration to present its arguments.
Background and the Preceding Litigation
“Booking.com” is a travel website and a company that, as the name suggests, offers flight and hotel reservations among other travel logistic support. It is a subsidiary of a US-based company and is headquartered in Amsterdam. It applied to the USPTO to register four marks, with different visual features but the common term “Booking.com.”. The application for “Booking.com” was first marked ‘generic and unregistrable’ by a USPTO examining attorney and subsequently, the Trade Mark Trial and Appeal Board affirmed the said finding. The Board held (i) that the term refers to the service which it is providing with a mere addition of a ‘.com’ suffix and hence it is ‘generic’ and (ii) even if the term was to be considered ‘descriptive’, it would still not be registrable in the absence of a secondary meaning being attached to it.
“Booking.com” next preferred an appeal to the District Court under a technical provision which allows the appellant to adduce new evidence not presented to the forums below. It brought in evidence of a “consumer perception survey” that it had itself conducted, and argued that nearly three-fourths of the consumers surveyed believed “Booking.com” to be a brand rather than a generic term. The District Court found in favour of the appellant and held (i) that the term was not generic but ‘descriptive’ because the consumers didn’t perceive it to be generic and (ii) that though the term was descriptive, it had now acquired secondary meaning thereby making it eligible for registration.
Interestingly and perhaps crucially, the USPTO which now preferred an appeal to the Court of Appeals did not challenge either the survey as a basis of understanding consumer perception or its methodology or its use in determining whether a term is descriptive, but instead it only challenged the specific determination by the District Court that “Booking.com” is not generic. So, the primary assertion that USPTO now made in its appeal was that “generic.com” is per se is not capable of being registered (surprisingly, at this time the USPTO was unaware that it had, in fact, granted such “generic.com” trademarks previously viz. “Art.com”, “Dating.com”). The Court of Appeals rejected this contention of the USPTO and affirmed the findings of the District Court and their bases.
The USPTO finally preferred a writ of certiorari to the SC, which led to the judgment under analysis in this article, in the cause title the United States Patent and Trademark Office, et al., v. Booking.com B.V.
The SC Judgement: Key Observations & Their Probable Repercussions
I. “We decline to adopt a rule essentially excluding registration of “generic.com” marks.”
The SC refused to lay down a per se rule barring registration of generic domain names because in its view, neither did USPTO’s past practices nor trademark law & policy allowed the imposition of such a sweeping rule regardless of a domain name’s “exceptional circumstances”. In other words, the SC accepted that a ‘generic.com’ domain name can get registration provided it can make an argument in favour of its non-generic characteristics. This has far-reaching consequences for trademark law (especially in the internet age) and can open the floodgates for generic domain name applications for trademark registration. The repercussions are not limited to a country because a domain name is exclusive across the world. Though the SC specifically stated that generic names are ordinarily ineligible, it kept the door ajar for prospective applicants who can convince the court of their special circumstances and thereby gain registration. In this case, the SC agreed with the evidence of consumer perception presented by “Booking.com” in the lower courts and found it sufficient to grant registration. More importantly, the SC did not limit the determination of generic-ness to only consumer surveys but kept multiple options open for a “generic.com” applicant to be able to use and convince the courts of his “exceptional circumstances” in the future. This makes availing of the exception to the general rule a lot easier when in fact it should have been more difficult given trademark laws’ disdain for generic terms.
II. “…the [US]PTO currently urges us to adopt: The combination of a generic word and “.com” is generic…we reject the PTO’s sweeping rule.”
The USPTO contended that “when a generic term is combined with a generic top-level domain like “.com” the resulting combination is generic”. The SC rejected this contention and stated (based on the consumer perception evidence) that even a “generic.com” term can have a “source-identifying characteristic” and consumers may infer that it refers to some specific entity. This observation can seriously impact trademark laws’ contempt for generic words because the observations made by the SC can be interpreted to mean that the addition of “.com” to a generic word cures the original word of its defect of generic-ness. E.g., in this case, itself, would the SC have granted registration to simply the word “Booking”? Highly unlikely. So then, how does adding a “.com” cure the defect associated with “Booking?” Does it mean that those applicants who were unable to get a generic name trademarked can now add a “.com” and claim eligibility for registration with some additional self-conducted consumer survey?
Also, interestingly, despite both parties agreeing that “booking” by itself is a generic term for hotel-booking services, the SC decided to view “Booking.com” differently. It is hard to swallow that despite “Booking.com” being the very definition of a generic domain name (taken together it simply means a website for booking), the SC held otherwise. The dissent (by Breyer, J) also expresses surprise as to how the ‘whole’ term can be greater than the ‘sum’ of its two generic ‘parts’.
The USPTO also argued, based on the case law, that just like the addition of a generic corporate designation (like “co.” or “inc.”) to a company’s or enterprise’s name does not confer trademark eligibility, similarly, the addition of “.com” to a generic word should be held to not affect the original word’s generic-ness. To counter this, the SC gave flimsy reasoning that since unlike physical company names, domain names are exclusive. The customers are well-aware that “Booking.com” will lead them to only one website. In other words, because there can be only one “Booking.com” on the world wide web, the SC felt that trademark registration should be granted! So, should every “generic.com” be given trademark registration because there can’t be an identical domain name? Respectfully, this argument is beneath the intellectual stature of such a high judicial forum.
III. “A term styled “generic.com” is a generic name for a class of goods or services only if the term has that meaning to consumers…Whether any given “generic.com” term is generic, we hold, depends on whether consumers, in fact, perceive that term as the name of a class or, instead, as a term capable of distinguishing among members of the class.”
Primarily, the SC based its judgment on the ‘consumer perception inquiry’ evidence presented by “Booking.com” in the courts below. The evidence was based on a survey that the respondent conducted wherein 74.8% of the participants perceived “Booking.com” to be a brand name whereas 23.8% thought it was a generic name. But, is a consumer perception inquiry alone sufficient to determine and cure the generic nature of such proportions as in the present case?
Acquired distinctiveness is an important aspect of trademark law in most countries. India, for instance, recognises it as an exception to the absolute grounds of ineligibility for registration viz. lack of distinctiveness, descriptive nature of the mark, and customary words. However, every jurisdiction following this principle requires the discharge of a heavy burden of proof on the part of the applicant. However, the SC, in this case, found itself convinced with just one self-conducted survey of the respondent thereby setting the bar too low for a case with so much at stake. With such a light burden of proof, what is to stop current proprietors from acquiring generic domain names now and then claiming favourable consumer perception some years later? This could start a race to buy generic domain names with the hope of claiming acquired distinctiveness sometime later. This could have serious repercussions for competitors in an age where an online presence is a crucial factor for commerce. It was incumbent on the SC to at least lay down some strict and substantial criteria for such cases.
Breyer, J observed in his dissent that trademark law should not protect generic terms to “preserve the linguistic commons by preventing one producer from appropriating to its exclusive use, a term needed by others to describe their goods or services.”
IV. “Booking(dot)com, the PTO argues, has already seized a domain name that no other website can use and is easy for consumers to find… Those competitive advantages, however, do not inevitably disqualify a mark from federal registration”
The important question that this observation raises (one that perhaps needs a more detailed analysis than the present article) is whether generic domain names need trademark protection at all in the first place?
The SC took the view that although generic domain names have a commercial and competitive advantage over other domain names, that doesn’t make them ineligible for statutory trademark protection. This, in the view of the author, is arguably likely to have the most far-reaching negative consequences.
The SC, unfortunately, failed to fully appreciate that generic domain names already have a distinct and substantial advantage in terms of website perception, prominence in search engine results, and ease of remembering and typing. As Breyer, J writes in his dissent: “…Because they immediately convey the nature of the business, the owner needs to expend less effort and expense educating consumers… generic domain names inspire instant trust and credibility and authority status in the industry… consumers may believe that no other product is the ‘real thing’…”. These competitive advantages in an internet age (in addition to the worldwide exclusivity of the generic domain name) are priceless and are determinants of how successful an enterprise’s online presence is. To add trademark protection to these existing advantages further strengthens and legitimises the anti-competitive nature of the generic domain names.
Shouldn’t the SC have taken a stand that generic domain names already enjoy more than sufficient benefits and are therefore ineligible for trademark protection? Shouldn’t the SC have stated that even though a proprietor was clever enough to buy a generic domain name before others, they do not wish to reward such early-bird tactics that are not based on any business goodwill either? In any future litigation concerning the registration of a domain name, the debate could then have rightly focused on whether the domain name is generic or not: a debate that trademark law always welcomes.
The SC also didn’t give serious thought to the implications of extending those benefits that statutory trademark registration entails, to a generic domain name. Every trademark statute across jurisdictions gives infringement remedies to the proprietor of a registered trademark for protection against similar marks, against cyber-squatting and even protection against disparaging advertisements. If a generic domain name is given these statutory benefits, how will a competitor use that generic word (which should have been available for every trader to use) as part of a word describing his/her business or in advertisements? The SC replied that “Booking.com” accepted that its trademark would be a “weak mark” and that it would be difficult for it to prove the likelihood of confusion in future litigation and also that “close variations were unlikely to infringe”. It is baffling that despite such admissions on the part of “Booking.com”, which virtually forsake, twist, and dilute some of the most basic principles of trademark law, the SC still decided to go ahead with granting of registration.
Also, what is to stop an internet behemoth like “Booking.com” from going back on its word and suing competitors for trademark infringement for using “booking” or its variations like “e-booking”, “quick booking”, “online booking”, etc.? Even if it knows that the litigation won’t succeed, isn’t the threat thereof sufficient to deter a new or a small enterprise from using these terms? Breyer, J in his dissent makes a powerful observation in this regard when he says “…why would a firm want to register its domain name as a trademark unless it wished to extend its area of exclusivity beyond the domain name itself?”
If a generic domain name proprietor is worried about others using his/her domain name in offline channels, he has passing off remedies available to him to use. As a principle, a passing-off action has a wider scope than a statutory infringement action and can be availed by the generic domain name.
Supplemental Issues: No Easy Answers
- Surveys as determinants of consumer perception for domain names
In addition to the central issues of probity and methodology, the question that arises is that can consumer perception surveys be used to plead non-genericness of a domain name? A consumer perception survey (assuming it’s done fairly and independently) is an important part of an applicant’s claim to ‘acquired distinctiveness’ for his mark (even if generic) in the offline world. But, can a consumer perception survey be an equally important piece of evidence for a generic domain name trademark application in today’s internet age? Investigative reports have found that prominent internet search-engines manipulate search results and decide the placement of results arbitrarily. If a generic domain name ties-up with a search engine to increase its visibility, will it be fair if that spills over into a consumer perception survey? In other words, doesn’t the possibility of manipulating online visibility affect the value of a consumer perception survey for a generic domain name?
- Did the USPTO plead insufficient grounds?
As discussed above, the USPTO argued primarily on the ground that the SC should declare a blanket prohibition on trademark registration for “generic.com” terms. But, did the USPTO miss a trick by not challenging the validity and relevance of a consumer perception survey in the specific case of generic domain names? Could the USPTO have offered to cancel existing “generic.com” trademark registrations (“art.com”, “dating.com”) in a grand gesture to preserve the integrity of trademark policy and principles? The author believes that USPTO should have done both in a bid to avoid a judgment such as the present one.
In Lieu of a Conclusion
It is difficult to fully gauge the long-term effects of this judgment while writing on it soon after it has been delivered. Those seeking to benefit from the many licenses and liberties it grants may have already begun planning on a generic domain name. Those worried about the sanctity of trademark law can only hope that courts are more vigilant in the future and give less deference to this judgment while granting trademarks. Those enterprises seeking to compete through the online medium can only brace for what may be coming from unscrupulous competitors and pray that trademark law doesn’t become a bane in the arena of domain names.
Shashi Shekhar Misra is a student at Campus Law Centre, University of Delhi. You can find him on LinkedIn.
Photo Illustration by Drew Angerer
Cover Photo Credits: Robin Utrecht/SOPA Images/LightRocket