Booking.com v. US Trademark Office – Major Case for Business Owners
Last week, between the headline-grabbing rulings regarding employment discrimination protections for LGBTQ workers and President Trump’s tax returns, the Supreme Court issued a decision in a very important case for business owners regarding trademark protection for business names. In summary, business owners can gain trademark protection over websites using generic names by showing the domain name with its .com extension is distinctive to consumers. The process of showing distinctiveness is complex and should be navigated with an experienced intellectual property (IP) attorney.
Booking.com – a well-known travel booking website – registered its full name “Booking.com” with the United States Patent and Trademark Office (“USPTO”) and applied for trademark protection of the name. Trademark protection is an important business asset. It keeps competitors from using the same or deceptively similar names, and if the name appears on retail items, protects the company’s exclusive ability to make money on the name. Trademark protection is a big deal that many small companies neglect when they start up. In Texas, using a d/b/a will protect the use of the business name in a particular county, and registering a business with the Secretary of State will protect the use of the name as a business entity, but a trademark confers the ability to keep others, inside the entire American market, from using and profiting from your name.
Old rule against generic names
Booking.com’s problem was that the USPTO had a long-standing rule, backed up by case law, that generic names could not have trademark protection. So, someone who sold honey could not trademark the name Honey for honey, thereby keeping anyone else who sold the sweet nectar of bees and blossoms from using the name “honey” in its name. That is still the rule, by the way. What changed in this case was that the Booking.com people added a dot-com to a generic name and in that way made it unique.
The USPTO had fused the old rule against giving trademark protection to generic names to the internet age by denying trademark protection to any generic name that added a .com, .net, .org or other extension.
Booking.com argued that through its marketing and brand awareness activities, the general public no longer associated “booking.com” with a generic service. Booking.com was a unique business, distinguishable from everyone else who did hotel booking. In a sense, it had become as unique as someone like Travelocity. The USPTO was not persuaded and denied the trademark registration, so Booking.com sued and worked its way up to the Supreme Court.
Reasons and standards for trademark protection
The Supreme Court noted the reasons for and advantages of trademark protection:
“A trademark distinguishes one producer’s goods or services from another’s. Guarding a trademark against use by others, this Court has explained, “secure[s] to the owner of the mark the goodwill” of her business and “protect[s] the ability of consumers to distinguish among competing producers.” (trademark statutes aim 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”). Trademark protection has roots in common law and equity.). Today, the Lanham Act, enacted in 1946, provides federal statutory protection for trademarks. 60 Stat. 427, as amended, 15 U. S. C. §1051 et seq. We have recognized that federal trademark protection, supplementing state law, “supports the free flow of commerce” and “foster[s] competition.”
The Court reiterated the standards for protection of “descriptive” marks. Those are distinguished from names that have no inherent meaning separate from their brand, like Exxon or Xerox, or even Amazon, which has taken on a new life as a brand distinctive from the rain forest. Descriptive marks mean what it sounds like, the name of the company describes what it does, and is much more likely to sound like or be similar to those other people and companies doing the same thing:
Prime among the conditions for registration, the mark must be one “by which the goods of the applicant may be distinguished from the goods of others.” §1052; see §1091(a) (supplemental register contains “marks capable of distinguishing . . . goods or services”). Distinctiveness is often expressed on an increasing scale: Word marks “may be (1) generic; (2) descriptive; (3) suggestive; (4) arbitrary; or (5) fanciful.”. The more distinctive the mark, the more readily it qualifies for the principal register. The most distinctive marks— those that are “‘arbitrary’ (‘Camel’ cigarettes), ‘fanciful’ (‘Kodak’ film), or ‘suggestive’ (‘Tide’ laundry detergent)”— may be placed on the principal register because they are “inherently distinctive.”
Booking.com sued after the PTO denied its trademark and sought review in the federal District Court, to introduce evidence that the public understands its name not as generic, but as to a specific company, involving booking hotel rooms at that internet domain name only. The District Court found that the name “booking.com” had acquired a secondary meaning – associated only with that one company and its specific services, and therefore was distinctive so could be trademarked. The Court of Appeals affirmed the District Court’s ruling.
The Supreme Court upheld the ruling of the District Court and Fourth Circuit Court of Appeals. The Court noted that “Eligibility for registration, all agree, turns on the mark’s capacity to “distinguis[h]” goods “in commerce.””
Because consumers perceive Booking.com as a particular company with a particular service, not a generic term for anyone who books hotel rooms. Because consumers distinguish between Travelocity and Booking.com, as separate entities, with separate and particular businesses and services, then Booking.com is no longer generic (if it ever was) and is distinct, so may therefore register its trademark.
The curious case of Goodyear
Interestingly, the Supreme Court referred to an old case about the name “Goodyear,” which nowadays most everybody associates with The Goodyear Tire & Rubber Company, based in Akron, Ohio, which has been one of the top manufacturers of tires and rubber products for decades. Interestingly, The Goodyear Tire & Rubber Company had no formal association with Charles Goodyear, the inventor of the rubber vulcanization process that makes tires and hard rubber products possible. Instead, the company used Charles Goodyear’s process, and name, which at the time was simply descriptive of a rubber-making process.
By the time that The Goodyear Tire & Rubber Company was formed in 1898, there were lots of companies with the name “Goodyear” so that The Goodyear Tire & Rubber Company could not trademark the use of the word Goodyear in all respects. More interestingly, the Supreme Court’s reference to the trademark fight over the name “Goodyear” actually predates the creation of The Goodyear Tire & Rubber Company by ten years. The case referred to in the Booking.com case is Goodyear’s India Rubber Glove Mfg. Co. v. Goodyear Rubber Co., decided in 1888 (The Goodyear Tire & Rubber Company was formed a decade later in 1898). The Supreme Court in the Goodyear India Rubber case held that the term “Goodyear Rubber” was generic, and referred to a process for vulcanizing rubber and Goodyear Rubber Company simply adding the name “company” to Goodyear and Rubber, did not distinguish the class of products enough to merit a trademark for its company name.
Much later, in 1948, The Goodyear Tire & Rubber Company, which was then 50 years old, trademarked the word “Goodyear” but written in stylized text in an arc, as it looks on the side of a tire. The trademark was only for the word, in its particular text, style, on tires. The Goodyear Tire & Rubber Company trademarked its winged foot logo that it uses on all of its products, however, with the name Goodyear, because the combination of the winged foot and name Goodyear is so associated with the particular company, The Goodyear Tire & Rubber Company, as opposed to any other rubber company, even others using the same Goodyear name.
That legacy of naming a company after a common process would rear up in odd ways. Earlier in our careers, we represented The Goodyear Tire & Rubber Company in products liability cases. Every once in a while, a hundred years after the company was founded, The Goodyear Tire & Rubber Company would be sued for a product with the Goodyear name that it did not manufacture, usually in the automotive industry. In the hundred years after the company’s founding, because it had come to such prominence in the tire rubber industry, most people associated the name “Goodyear” with The Goodyear Tire and Rubber Company, but that doesn’t stop other companies making non-tire products with the Goodyear name, provided they don’t use the trademarked logos or use the name on tires.
This shows how what started as a generic name could take on a specialized meaning in the mind of the public through market domination, and how ephemeral the showing for trademark is – what does the public think, and would the average man on the street be confused by the use of a general name as a trademark.
Booking.com ruling, and key fact showings needed
The Supreme Court ruled against the longstanding PTO rule that adding a domain registry (.com, .net) to a name could not give it trademark status. The Supreme Court noted that in certain circumstances, because only one company can occupy a particular domain name on the internet, if the domain extension – the dot-com, or dot-net – might lend it status as a distinctly separate entity from all others, and therefore give it trademark rights, where the parts of the name - the “booking” and the “dot-com” would not alone.
The Supreme Court did not rule that putting a domain extension on a name automatically grants it trademark status. The rule the Supreme Court stated is “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.”
The Court gave some guidance on what type of evidence companies would need to produce:
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. Surveys can be helpful evidence of consumer perception but require care in their design and interpretation. See Brief for Trademark Scholars as Amici Curiae 18–20 (urging 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). Moreover, difficult questions may be presented when a term has multiple concurrent meanings to consumers or a meaning that has changed over time. See, e.g., 2 J. McCarthy, Trademarks and Unfair Competition §12:51 (5th ed. 2019) (discussing terms that are “a generic name to some, a trademark to others”); id., §12:49 (“Determining the distinction between generic and trademark usage of a word . . . when there are no other sellers of [the good or service] is one of the most difficult areas of trademark law.”). Such issues are not here entailed, for the PTO does not contest the lower courts’ assessment of consumer perception in this case. See Pet. for Cert. I; Brief for Petitioners 17–18. For the same reason, while the dissent questions the evidence on which the lower courts relied, post, at 7–8, 9, we have no occasion to reweigh that evidence. Cf. post, at 1–2 (SOTOMAYOR, J., concurring).
The PTO was worried about Booking.com trying to monopolize the term “booking” in commerce and keep companies with names that include “booking” from operating. The Supreme Court noted that there would need to be a likelihood of confusion. Booking.com won, largely, because it admitted in its briefing that it “would not prevent competitors from using the word “booking” to describe their own services.”
Lessons and take-aways for business owners
Business owners need to protect their names. One way is to secure your internet domain name with all potential extensions (.com, .net., .co). The other way is to trademark the name and/or a logo. If you have a relatively descriptive name, the best course of action is to develop a logo and first trademark the name/logo combination while you operate the business and make a concerted effort to earn and own name recognition. When you do go to the USPTO, you will have to prove that consumer perception has changed the descriptive name into a recognition of your business as the descriptor. That takes time and effort. Fortunately, those same efforts are good marketing for the business itself.
Intellectual Property law is always changing, and rules are not always intuitive. You should use an IP attorney, particularly one registered with the USPTO, which requires a technical degree and passing a difficult test. Erik Knockaert of our firm is a licensed patent attorney with years of experience with the USPTO. The IP attorney can assist with the initial registration of the name and/or logo. If you have been in business for some time, an IP attorney can assist in gathering the information that will be required by the USPTO to register a descriptive name.
For further information in IP law, or to contact us, see: https://www.lawdoneright.net/intellectual-property
For a copy of the USPTO v. Booking.com case: https://www.supremecourt.gov/opinions/19pdf/19-46_8n59.pdf