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INSIGHT: The Supreme Court Can Bring Trademark Law into the .Com Age

June 3, 2020, 8:01 AM

The U.S. Supreme Court is set to decide whether the addition of a generic top-level domain (TLD) (i.e., .com) to an otherwise generic second-level domain (SLD) (i.e., booking) can create a protectable trademark. The court’s decision in USPTO v. Booking.com B.V. has the potential to modernize trademark law and better align it with the realities of today’s internet-based commercial world.

The court heard oral argument on May 4.

In 2011 and 2012, Booking.com B.V. (Booking.com) filed U.S. trademark applications for BOOKING.COM (word mark and stylized versions) for online hotel reservation services and related services. The U.S. Patent and Trademark Office rejected the applications, finding that (i) “booking” is generic for the recited services and (ii) the mere addition of “.com,” which itself is generic, did not make the mark protectable.

On appeal, the U.S. District Court for the Eastern District of Virginia disagreed, finding that “when combined with an SLD, a TLD generally has source identifying significance and the combination of a generic SLD and a TLD is generally a descriptive mark that is protectable upon a showing of acquired distinctiveness,” and that Booking.com had satisfied that showing. The Fourth Circuit affirmed the result, though it refused to adopt the district court’s rule that a generic SLD combined with a TLD usually is descriptive.

The Paramount Importance of Consumer Perception in Trademark Law

By definition, trademarks and service marks both serve to identify the source of goods or services and distinguish those goods or services from those of third parties. Therefore, trademark law seeks to “protect the public so it may be confident that, in purchasing a product bearing a particular trade-mark which it favorably knows, it will get the product which it asks for and wants to get.” Two Pesos Inc. v. Taco Cabana Inc., 505 U.S. 763 (1992).

This foundational principle puts consumer perception at the center of the inquiry: the question is whether a mark has source-signifying meaning for relevant consumers.

Domain Names that Combine a Generic SLD and TLD Can Serve as Source Identifiers

In 2010, e-commerce sales accounted for 6.4% of total retail spend. By 2019, that share had grown to 16%, and the rate continues to accelerate every year. Given the ubiquity of the internet in consumers’ personal and professional lives, and the increasing extent to which consumers have come to associate domain names with specific sources of goods and/or services, it is reasonable to assume that a generic SLD combined with a TLD eventually can come to serve as a source identifier if it is consistently used as a mark and— particularly as the result of long-standing use by a single entity and extensive advertising and sales—if it acquires sufficient recognition among relevant consumers over time.

Striking the Right Balance

Even ardent advocates for protecting otherwise generic .com marks recognize that there is tension between granting a party rights in a mark that has acquired distinctiveness over time and preventing parties from monopolizing a commonly-used term.

The USPTO and other commentators argue that if the Supreme Court affirms the Fourth Circuit’s decision, a rush of applications for protection of generic .com marks, and a subsequent overreach in enforcement efforts by the owners of those newly-protected marks, will result in a “language monopoly” with grave anticompetitive effects. The Supreme Court, however, could adopt a ruling that balances these potential abuses with a practical recognition of the source-identifying significance of .com brands.

More particularly, the court could follow its own lead in Wal-Mart Stores Inc. v. Samara Bros., 529 U.S. 205 (2000), wherein it ruled that product design trade dress never can be inherently distinctive, and must acquire distinctiveness before warranting protection. Applying a similar rule here, the court could rule that domain names that combine a generic SLD (e.g., booking) with a TLD (e.g., .com) are protectable as marks only if the applicant first can prove that (i) it owns that domain name, (ii) it uses that domain name as a mark, and (iii) that mark has acquired distinctiveness among relevant consumers.

Under this approach, a party could not merely add “.com” to a generic term (e.g., “hats.com”) and expect immediate protection; rather, the inquiry would hinge on whether the public recognizes the domain name not only as an internet address, but also a mark that identifies a specific source of goods or services.

Such a mark would only be entitled to protection upon submission of sufficient evidence of acquired distinctiveness (such as the Teflon survey that demonstrated 75% of consumers recognized BOOKING.COM as a mark), and not merely upon a claim of five or more years of continuous use by the applicant. Given the high burden for proving acquired distinctiveness, such a requirement would help prevent an unwarranted surge in applications for protection of generic .com marks.

Additionally, the court could rule that no trademark rights would be afforded to the generic SLD or TLD components of such a composite mark separately. Rather, each individual component of the mark still would be considered merely descriptive or generic, and, therefore, the resulting registration would, consistent with current USPTO practice, be obligated to disclaim both the SLD and TLD individually.

Such a resolution—permitting such a mark to be protected only upon proof of acquired distinctiveness, while limiting rights in the arguably generic or merely descriptive components of that mark individually—would not categorically deny protection to a new age of distinctive internet brands, but rather would strike a reasonable balance between the trademark rights of internet-based companies and the “language monopoly” concerns expressed by the USPTO.

This column does not necessarily reflect the opinion of The Bureau of National Affairs, Inc. or its owners.

Author Information

Emilia Cannella is counsel in Ropes & Gray’s intellectual property transactions practice in Boston.

Evan Gourvitz is counsel in Ropes & Gray’s intellectual property litigation practice in New York.

Gabriel Gillmeyer is an associate in Ropes & Gray’s intellectual property transactions practice in Boston.

Jessica Madsen is an associate in Ropes & Gray’s corporate group in Boston.

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