The U.S. Supreme Court issued a much-anticipated trademark opinion in the United States Patent and Trademark Office v Booking.com B.V. No. 19-46 (S. Ct. June 30, 2020). This case was the very first one that was argued before the Court via telephone in light of the COVID-19 pandemic.
The central question in this case was whether the addition of a top-level domain, e.g. “.com”, to an otherwise generic term can transform the generic term into a protectable trademark. In particular, at issue was the eligibility of “Booking.com” for registration as a trademark in association with online hotel-reservations. By an 8-1 vote, the Court sided with Booking.com in its decade-long quest to seek federal trademark registration for its name. More broadly, the Court declined to impose a categorical rule against the registration of “generic.com” marks. The Booking.com decision and its approach to assessing inherent distinctiveness will be of particular interest to Canadian trademark practitioners because it may provide some guidance as to how we could address the new inherent distinctiveness examination criterion.
Background of the Booking.com Case
Booking.com is a digital travel company that provides online hotel and travel reservation services under the brand Booking.com, which is also the domain name of its website. Booking.com at 4.
Nearly a decade ago, Booking.com filed trademark applications for four marks, each with different visual features but all containing the term “Booking.com”. Id. A USPTO Examining Attorney refused the applications, finding that the term “Booking.com” is generic for reservation services. Id. The Trademark Trial and Appeal Board affirmed the Examining Attorney’s refusals. Id.
Booking.com sought review in the U.S. District Court in the Eastern District of Virginia and invoked a mode of review that allowed Booking.com to introduce new evidence, including consumer perception of the Booking.com mark. Id. at 5. The district court “concluded that ‘Booking.com’—unlike ‘booking’—is not generic” but “is descriptive.” Id. The “consuming public,” the court found, “primarily understands that Booking.com does not refer to a genus, rather it is descriptive of services involving ‘booking’ available at that domain name.” Id. The district court also found that the term has “acquired secondary meaning as to hotel-reservation services”. Id.
The USPTO appealed to the Court of Appeals for the Fourth Circuit on the district court’s determination that Booking.com is not generic. Id. The appeal court found no error in the district court’s assessment and “rejected the PTO’s contention that the combination of ‘.com’ with a generic term like ‘booking’ ‘is necessarily generic.’” Id.
The U.S. Supreme Court granted the USTPO’s petition to assess “whether there is a nearly per se rule against trademark protection for a ‘generic.com’ term.” Id.
The Majority Opinion
Justice Ginsburg wrote the majority opinion and found that consumer perception matters in assessing whether Booking.com is generic. “[W]hether ‘Booking.com’ is generic turns on whether that term, taken as a whole signifies to consumers the class of online hotel-reservation services” [underlining mine]. Id. at 7.
This statement is based on the following guiding principles:
First, a “generic” term names a “class” of goods or services, rather than any particular feature or exemplification of the class… Second, for a compound term, the distinctiveness inquiry trains on the term’s meaning as a whole, not its parts in isolation… Third, the relevant meaning of a term is its meaning to consumers… Eligibility for registration… turns on the mark’s capacity to “distinguis[h]” goods “in commerce.” … Id.
The Court then reasoned that “if “Booking.com” were generic, we might expect consumers to understand Travelocity—another such service—to be a “Booking.com.” We might similarly expect that a consumer, searching for a trusted source of online hotel-reservation services, could ask a frequent traveler to name her favorite “Booking.com” provider.” Id. “Because ‘Booking.com’ is not a generic name to consumers, it is not generic.” Id.
The Dissenting Opinion
Justice Breyer wrote a dissenting opinion and cautioned that a “proliferation of ‘generic.com’ marks” “tend to inhibit, rather than to promote, free competition in online commerce.” Id. at 13.
Justice Breyer opined that the principle articulated in Goodyear Co v Goodyear Rubber Co, 128 US 598 (1888) is sound. “Goodyear recognized that designations such as ‘Company,’ ‘Corp.,’ and ‘Inc.’ merely indicate corporate form and therefore do nothing to distinguish one firm’s goods or services from all others’. It follows that the addition of such a corporate designation does not ‘magically transform a generic name for a product or service into a trademark, thereby giving a right to exclude others.’” Dissent at 5.
Applying the Goodyear principle in the context of domain names, Justice Breyer found that “appending ‘.com’ to a generic term ordinarily yields no meaning beyond that of its constituent parts.” Id.
Some Guidance to Assess Inherent Distinctiveness?
Canada’s Trademarks Act underwent major reform in 2019 and in so doing, introduced an inherent distinctiveness examination criterion. Under the new Act, the Registrar now has the power to object to a trademark if the Registrar’s “preliminary view” is that the trademark is not “inherently distinctive”. There is limited jurisprudence and guidance as to how this new examination criterion should be used and how to respond when such an objection is raised in examination.
The Trademarks Examination Manual from the Canadian Intellectual Property Office (CIPO) provides examples that the CIPO would consider to lack inherent distinctiveness. In the context of domain names, the Manual considers consumer perception of a mark and states that “consumers are predisposed to view TLDs as a portion of a web address”. The Manual then says that “the addition of a Uniform Resource Locator (URL) or TLD to an otherwise unregistrable trademark generally does not add to the inherent distinctiveness of the trademark.” at 126.96.36.199. This approach is consistent with the Booking.com decision to the extent that the Court recognized that Booking.com, although not generic, was still a descriptive term, meaning that the term lacks inherent distinctiveness. The Booking.com trademark could still be registrable in this specific case based on evidence the term had acquired distinctiveness in the minds of consumers.
However, the reasoning in the Booking.com decision may still be of some assistance to Canadian practitioners in emphasizing that the focus of examination should be on the distinctive qualities of the trademark as a whole, rather than its constituent parts. For example, although not expressly stated in the Manual, the CIPO will consider that a trademark that is composed of component parts that are each not inherently distinctive lacks inherent distinctiveness as a whole, without further considering whether the trademark as a whole is sufficiently distinctive. The Booking.com decision emphasizes that the combination of a generic term with a generic descriptor may nonetheless result in a term with some degree of distinctiveness, rather than necessarily remaining simply a generic term (i.e. the sum of the whole can be greater than the sum of the constituent parts when considering the issue of distinctiveness). This supports that the key focus in assessing distinctiveness should be on the distinctiveness of the trademark considered as a whole, not on the distinctiveness of each component part of the trademark.
Also, the Booking.com decision emphasizes that as part of a distinctiveness analysis, the relevant meaning of a term is its meaning to consumers. Building on that principle, perhaps the question to be addressed, when assessing the inherent distinctiveness of a mark, is whether consumers would perceive the mark as capable of creating a commercial impression distinct from its associated goods and/or services. The Manual suggests that trademark examiners should conduct research to see whether the applied-for mark is being used by others in the trade. If so, “the trademark is likely to have no inherent distinctiveness as the public would not respond to the trademark as identifying only one source.” at 4.9.4. This point seems to conflate “actual distinctiveness” (or lack thereof) with “inherent distinctiveness” (or lack thereof). It is true that if a mark is commonly used in the trade to describe or to identify certain goods or a feature associated with the goods, the mark is unlikely to have any inherent distinctiveness. However, assessment of this point further requires an evaluation of the meaning of the term to consumers in this context, i.e. whether the term is actually being used in a manner that has some meaning with respect to the goods or services themselves, or rather is used in a trademark sense by multiple traders. After all, an “inherently distinctive” trademark may be used by more than one party and whether that inherently distinctive trademark actually distinguishes one party’s goods from those of its competitors is a separate question from whether it is inherently distinctive. Without further considering the meaning of the term being used to consumers, the CIPO’s current approach to evaluating inherent distinctiveness does not differentiate between potentially infringing uses of an inherently distinctive trademark and descriptive uses of the same term by multiple traders.
Thus, while the Booking.com case focussed primarily on generic trademarks, the principles enunciated therein, and in particular the focus on the significance of a term as a whole to consumers, may be of assistance to Canadian practitioners in helping to guide the CIPO back to the bedrock principles underpinning trademark law to clarify how inherent distinctiveness should be assessed during examination.
**This article was originally published by The Lawyer’s Daily (www.thelawyersdaily.ca) a division of LexisNexis Canada Inc.