Booking.com: validity continues to be disconnected from scope of rights

U.S. Patent &
Trademark Office v. Booking.com B.V., No. 19–46 (Jun. 30, 2020)

Kind of what I expected, though maybe a little worse in its disregard of scope issues.

Ginsburg writes the
majority (Sotomayor concurred and Breyer dissented).
 

“Generic.com” is only
generic for a class of goods or services “if the term has that meaning to
consumers,” and the evidence hree showed that consumers don’t perceive “booking.com”
to signify online hotel-reservation services as a class. So, the Court clears
the way to register a lot of these domain names, because this is not on
its face a holding about how booking.com has secondary meaning, it is a holding
about how the PTO didn’t meet the burden of showing that consumers perceive
booking.com as the name of a service.
 

Along the way, the
Court cites the parties’ agreement that “for a compound term, the distinctiveness
inquiry trains on the term’s meaning as a whole, not its parts in isolation.” And
“the relevant meaning of a term is its meaning to consumers.” Although the
Lanham Act provision that “[t]he primary significance of the registered mark to
the relevant public . . . shall be the test for determining whether the
registered mark has become the generic name of goods or services” speaks
directly by its terms only to cancellation, 15 U.S.C. §1064(3), it sets the
standard for genericity generally. However, today’s rule “does not depend on
whether one meaning among several is ‘primary.’ Sufficient to resolve this case
is the undisputed principle that consumer perception demarcates a term’s
meaning.”
 

Since consumers don’t
perceive Travelocity as a “Booking.com,” it is not generic. Goodyear’s India
Rubber Glove Mfg. Co. v. Goodyear Rubber Co., 128 U. S. 598 (1888), held that a
generic corporate designation added to a generic term does not create a protectable
term because it adds no additional meaning. But .com might “also convey to
consumers a source-identifying characteristic: an association with a particular
website,” because only one entity can have a particular domain name at a time.
Since consumers know that, a consumer can infer entity-designating function. (Footnote:
this doesn’t constitute utilitarian functionality, which isn’t at issue here.)
 

Comment: this
reasoning goes even further than the above and suggests what the district court
held, which is that individual domain names are likely to be inherently
distinctive because of this automatic (de facto) assumption. But the ability of
a term to distinguish this entity from other entities or domain names doesn’t seem to
come into this reasoning at all, even though it probably should. How easily
will consumers remember: was it flower.com or flowers.com?
 

Anyway, Goodyear’s
rule is more modest than the PTO argued: “A compound of generic elements is
generic if the combination yields no additional meaning to consumers capable of
distinguishing the goods or services.”
 

There is no
automatic classification of generic.com as nongeneric, the Court says, but the
test doesn’t give any weight to the genericity of what comes before the dot; it’s
only whether the full term is perceived as the name of a class. “Evidence
informing that inquiry can include not only consumer surveys, but also
dictionaries, usage by consumers and competitors, and any other source of
evidence bearing on how consumers perceive a term’s meaning.” As to surveys,
they “can be helpful evidence of consumer perception but require care in their
design and interpretation.” We get a cite to our amicus brief noting that “survey
respondents may conflate the fact that domain names are exclusive with a
conclusion that a given ‘generic.com’ term has achieved secondary meaning.” But
difficult questions aren’t posed here because the PTO didn’t contest the lower
courts’ assessment of consumer perception of booking.com specifically.
 

The PTO’s real objection
wasn’t to Booking’s exclusive use of “Booking.com” as a mark, but to the risk
of “undue control” over similar language “that others should remain free to
use.” However, the Court thought that trademark law’s existing protections for
descriptive uses sufficed: first, only confusing uses are infringing, and
weaker/more descriptive marks are less likely to be confused:
 

When a mark incorporates generic or highly descriptive components,
consumers are less likely to think that other uses of the common element
emanate from the mark’s owner. Similarly, “[i]n a ‘crowded’ field of look-alike
marks” (e.g., hotel names including the word “grand”), consumers “may have
learned to carefully pick out” one mark from another. And even where some consumer
confusion exists, the doctrine known as classic fair use, protects from
liability anyone who uses a descriptive term, “fairly and in good faith” and
“otherwise than as a mark,” merely to describe her own goods.
 

[I note that putting
a generic term in one’s domain name is likely to be pretty risky for descriptive
fair use, given “otherwise than as a mark.”]
 

Booking.com concedes
that its mark would be “weak” and that “close variations are unlikely to
infringe.” [And we will now rely on courts to ensure that it and other users of
generic.coms stick to that concession—but since the US doesn’t have a cause of
action for unjustified threats relating to IP, the C&D letters can be
pretty aggressive regardless of the likely litigation outcome, and it’s really
hard to get a fee shift as a successful defendant, especially if (as they often
do) courts treat having a valid mark as making any assertion of infringement
reasonable.]
 

The competitive
advantage conferred by seizing on a descriptive domain name doesn’t justify
refusing registration. All descriptive terms “are intuitively linked to the
product or service and thus might be easy for consumers to find using a search
engine or telephone directory,” but they’re still registrable. And the exclusive
connection between a domain name and its owner “makes trademark protection more
appropriate, not less.” [And here is the issue that European systems will find
much easier to resolve than ours: that statement makes perfect sense if we
aren’t worried about scope at all
. But we should be!]
 

Unfair competition
law isn’t a good enough substitute for registration because registration
confers valuable benefits, such as under ACPA and the UDRP.
 

Sotomayor,
concurring. There’s no (nearly) per se rule against generic.com registrations.
However, consumer-survey evidence “may be an unreliable indicator of
genericness.” But the Court’s opinion doesn’t make surveys “the be-all and
end-all.” Given the availability of other evidence and the weaknesses of
surveys, the PTO might have been right about genericity here and the district
court may have been wrong; that’s just not the question before the Court. [Although
it is the way to bet about how errors will go, given the parties’ resources. In
other cases like Wal-Mart, the false positive issue has led the Court to
more restrictive rules—but because the Court generally does want to hold out
the prospect of some protection in such cases, the overall result of Sotomayor’s
concurrence at least is consistent with Wal-Mart and Qualitex:
you should have to show secondary meaning for your specific claimed mark
and only then can you get trademark rights.]
 

Breyer, dissenting: What
booking.com is, is obvious from the name. Genericity “preserves the linguistic
commons by preventing one producer from appropriating to its own exclusive use
a term needed by others to describe their goods or services.” Adding .com
shouldn’t be enough to do so.
 

Distinguishing
descriptive from generic terms isn’t always easy, especially with a compound
term. For a compound, courts have to determine “whether the combination of generic
terms conveys some distinctive, source-identifying meaning that each term, individually,
lacks. If the meaning of the whole is no greater than the sum of its parts,
then the compound is itself generic.” 

Breyer would have
held that appending “.com” to a generic term “ordinarily yields no meaning
beyond that of its constituent parts.” The combination of “booking” and “.com” “does
not serve to ‘identify a particular characteristic or quality of some thing; it
connotes the basic nature of that thing’—the hallmark of a generic term.” Any “reasonably
well-informed consumer” would understand that trademark.com is the website of
the trademark owner, which is why courts generally ignore the TLD when analyzing
likely confusion.
 

And here we get to
the heart of the disagreement: because .com will be ignored in an infringement
inquiry, it should also be ignored for validity. (Absent some exception such as
where the TLD interacts with the second-level domain in a meaning-changing way;
also new gTLDs like “guru” might behave differently.) In other words, Breyer
wants to think about scope when assessing validity.
 

The uniqueness conferred
by the domain name system doesn’t change the Goodyear rule. “Wine, Inc.”
likewise “implies the existence of a specific legal entity incorporated under
the laws of some State.” [This is an intuitive weakness of the majority’s reasoning:
it isn’t explicitly willing to turn its empiricist, consumer-perception-is-all
gaze on the Goodyear rule, but Breyer seems likely to be correct that
Wine, Inc. is likely to produce different survey results than “Wine.” However,
my sense is that Ginsburg would also allow Wine, Inc. to present its consumer
survey, perhaps with an eye to the problem of de facto secondary meaning.]
 

To Breyer, “functional
exclusivity does not negate the principle animating Goodyear: Terms that
merely convey the nature of the producer’s business should remain free for all
to use.” The majority’s “fact-specific approach” rejects that principle.
Although consumers might not call Travelocity a booking.com, “literal use is
not dispositive.” [We might call that production versus recognition: consumers
may understand a lot of stuff they wouldn’t say.]
 

Breyer correctly
notes that the facts that supposedly convert some generic.com domain names into
descriptive marks are unlikely to vary from case to case:
 

There will never be evidence that consumers literally refer to the
relevant class of online merchants as “generic.coms.” Nor are “generic.com”
terms likely to appear in dictionaries. And the key fact that, in the
majority’s view, distinguishes this case from Goodyear—that only one
entity can own the rights to a particular domain name at a time—is present in
every “generic.com” case.
 

So what would
vary? Survey evidence. But survey evidence “has limited probative value in this
context,” given the phenomenon of de facto secondary meaning. Thus, the TTAB
and some courts have concluded that “survey evidence is generally of little
value in separating generic from descriptive terms.” Here, while Booking’s
survey showed that 74.8% of participants thought that “Booking.com” is a brand
name, 33% believed that “Washingmachine.com” was a brand. What’s the
difference? Booking.com isn’t inherently more descriptive than
“Washingmachine.com” or any other generic.com. Respondents were likely reacting
to having heard of Booking.com, suggesting that washingmachine.com could
undergo the same transformation by investing heavily in advertising. Association
of booking.com with a particular company is simply not inconsistent with
genericity.

 

Thus, quoting
McCarthy, the majority rule “[d]iscard[s] the predictable and clear line rule
of the [PTO] and the Federal Circuit” in favor of “a nebulous and unpredictable
zone of generic name and top level domain combinations that somehow become
protectable marks when accompanied by favorable survey results.”
 

Also, this rule
threatens “serious anticompetitive consequences in the online marketplace” by adding
to the non-registration advantages of doing business under a generic name: basically,
easier access to consumers’ memories, searches, and trust. Booking says it won’t
threaten similar uses, “[b]ut other firms may prove less restrained,” and of
what use is trademark registration distinct from domain name registration other
than to “extend its area of exclusivity beyond the domain name itself”?
 

The majority says
that infringement/descriptive fair use will police the scope of protection, but
we’ve already seen boundary-pushing. (Citing Advertise.com v. AOL, LLC, 2010 WL
11507594 (CD Cal.) (owner of “Advertising.com” obtained preliminary injunction
against competitor’s use of “Advertise.com”), vacated in part, 616 F. 3d 974
(CA9 2010).) “Even if ultimately unsuccessful, the threat of costly litigation
will no doubt chill others from using variants on the registered mark and
privilege established firms over new entrants to the market.”
 

Breyer’s dissent is
particularly notable for its repeated use of “anticompetitive” and variants, suggesting
the potential for the revival of a mid-twentieth-century analysis of trademarks
as having the capacity to confer unwarranted market power.

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