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Justices Talk Monopolies, Generic Marks in Booking.com Case (1)

May 4, 2020, 5:24 PMUpdated: May 4, 2020, 10:02 PM

In its first-ever remote oral argument, the U.S. Supreme Court on Monday showed concerns on both sides of the argument about whether “Booking.com” and similar terms are entitled to federal trademark protection.

The justices expressed concern that such trademarks could monopolize the use of generic terms in domain names. But they also questioned whether ".com” marks could rightly be compared to other combinations of generic marks that have been previously held unprotectable.

Smooth Proceedings

Justice Clarence Thomas, who rarely questions attorneys during oral argument, asked the USPTO’s attorney whether Booking.com was closer to a personal telephone number than a generic company name. He also questioned Booking’s attorney on the standard she proposed the court use to decide the case.

“When I was preparing for my case in front of the Court, I think it had been three years since he asked a question during arguments,” said Mark S. Werbner, a partner at Winston & Strawn LLP in Dallas. “This morning, when he was the second justice to ask a question, I ran to my wife and said, ‘You won’t believe it! Justice Thomas asked a question!’”

Chief Justice John Roberts kept the novel call-in proceedings moving at a brisk pace. The argument went smoothly apart from a brief period where Justice Stephen Breyer’s microphone was muffled and long pauses before Justice Sonia Sotomayor began her first line of questioning and Department of Justice attorney Erica L. Ross began her end-of-argument rebuttal on behalf of the PTO.

“I didn’t expect the oral arguments in this case to be as interesting as they were. I think this had to do with the teleconference format,” Werbner said. “It made for easier interaction between the lawyers and the justices, and it was probably easier to follow for the audience listening.”

Reading the Tea Leaves

A generic term is a common name for a category of goods, like “television,” and can’t be registered as a trademark. A descriptive trademark describes a feature of the good or service, like “Sharp” for televisions, and can be registered if it has acquired “secondary meaning.” A mark has secondary meaning if it has become associated with the owner’s goods in the relevant public’s minds.

The U.S. Patent and Trademark Office and Trademark Trial and Appeal Board initially rejected Booking’s attempt to register “Booking.com,” finding it generic. But the U.S. Court of Appeals for the Fourth Circuit said the generic word “Booking” combined with the generic top-level domain ".com” can create a descriptive trademark, and found that “Booking.com” had secondary meaning based on consumer survey evidence.

Fara Sunderji, a partner at Dorsey & Whitney LLP in New York, said the court pressed both sides but “hinted that siding with the government in barring all such trademarks would be ‘a bridge too far,’” quoting Justice Elena Kagan.

“Reading the tea leaves, the tougher questions were on the USPTO’s side,” Sunderji said.

Carla B. Oakley, a partner at Morgan Lewis & Bockius LLP in San Francisco, said she thought it was likely the court would rule against Booking, but that it may be reluctant to create a bright-line rule from this case.

“It’s a challenging issue because of the competing interests,” and the “unique issues” that come with a domain name being used as a trademark, Oakley said.

Monopoly Concerns

Lisa S. Blatt of Williams & Connolly LLP argued for Booking.com that the “primary significance test” should apply to the case, where whether a brand name is generic or descriptive depends on how consumers view it.

Sotomayor said she would have found ‘Booking’ generic under that test, even with '.com,’” based on other domain names that use the same word.

“Frankly, I’m on the margin with respect to your mark,” Sotomayor said.

The survey evidence that Booking.com provided of its consumer recognition also came into question. The proper role of survey evidence in trademark cases is “an issue we deal with a lot,” Oakley said.

Nearly three quarters of respondents to Booking’s survey identified Booking.com as a non-generic brand name. But a third of the respondents also wrongly identified “washingmachines.com” as a brand, and some justices asked if consumers are inherently more likely to believe that a domain name isn’t generic.

“These names by definition are unique, and everybody knows that they’re unique,” Kagan said. “If you apply the primary significance test to these completely unique URLs, aren’t you going to get a bias in the results?”

“That is exactly the point that makes this a challenging case for the justices,” Oakley said, because it involves a term for which “there is only one exact domain name.”

“You are seeking a degree of monopoly power that nobody could have had prior to the internet age,” Justice Samuel Alito said. Owning the exclusive rights to the “Booking.com” website already “gives you an advantage over other companies in that business. And now you want to get even more advantage by getting trademark protection for that.”

“Here, the power of your trademark is exactly growing out of the fact that there is one '.com’ with one name,” Justice Stephen Breyer said. “You’re taking internet power, not just advertising or commercial product power, and multiplying it.”

Blatt argued that there was no evidence of generic ".com” websites pushing others out of the market, noting that Booking.com hasn’t gone after similarly named websites.

“The notion that anyone is being crowded out is just silly,” Blatt said, arguing that the PTO’s brief didn’t include a “single example of harm despite the ubiquity of generic word.com marks and the fact that Booking.com is registered in 85 other companies.”

“Where are the lawsuits? Where are the complaints?” Blatt said. “Nowhere. I don’t see any.”

More Like 1-800 Numbers

Ross, who argued on behalf of the PTO, said the case should be governed by the high court’s 1888 ruling in Goodyear’s India Rubber Glove Mfg. Co. v. Goodyear Rubber Co., which held that adding a corporate designation like “Inc.” or “Co.” doesn’t make a generic mark protectable. Ross argued that “Booking.com” is no different from “Booking Inc.” or “Booking Co.,” and is never entitled to trademark protection “no matter what success it has achieved in securing public identification.”

The justices questioned the PTO’s reliance on a 19th century court ruling. Roberts asked if Goodyear could be reconciled with the Lanham Act, which currently governs federal trademark law.

“It seems to me that in trying to decide what Congress had in mind, it makes more sense to follow the language that Congress chose in the statute rather than a 130-year-old case of ours,” Roberts said.

Roberts also noted that “booking.com” isn’t used as a generic term to describe similar websites like Travelocity or Priceline.

Some justices also questioned whether ".com” was really comparable to a corporate designation. Thomas asked whether Booking.com was more similar to a personalized 1-800 number than a corporate designation that “any company could use,” and cited 1-800-Plumbing as a registered trademark.

“There can only be one domain address '.com.’ So this would seem to be more analogous to the 1-800 numbers, which are also individualized,” Thomas said.

Thomas once went a decade without asking a question during an oral argument.

‘Classic Generic Usage’

“You have a trademark that is an address, you can have a trademark that is a telephone number, so why can’t you have a trademark that’s a dot-com?,” Breyer added.

“All Booking.com tells you is that there is a website on the internet for Booking,” which is a “classic generic usage,” Ross responded.

“If you’re right that .com doesn’t make a generic term non-generic, how many marks, already registered marks, would be subject to cancellation?,” Justice Ruth Bader Ginsburg said. Booking.com has argued the PTO’s position could threaten “hundreds” of existing trademarks with generic word combinations like Waffle House, TV Guide, and Office Depot.

Ross argued it’s “not true” that the combination of any two nouns would be generic, noting for example that “Cheesecake Factory” is “not a literal factory producing cheesecakes, but a restaurant.”

“‘Crab House’ is not a literal house where crabs live, they are actually dead and you eat them, and the government thought ‘Crab House’ was generic,” Blatt responded."If you go down this road of thinking that certain words are off-limits, I just think you are creating a real mess.”

The case is USPTO v. Booking.com B.V., U.S., No. 19-46, oral argument held 5/4/20.

(Updated with additional reporting and attorney comment.)

To contact the reporter on this story: Blake Brittain in Washington at bbrittain@bloomberglaw.com

To contact the editor responsible for this story: Rob Tricchinelli at rtricchinelli@bloomberglaw.com

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