30 June 2020

SCOTUS Clarifies Federal Trademark Law Of Generic Marks 8-1

The latest U.S. Supreme Court ruling strengthens federal trademark protection for marginal trademarks of the type "genericmark.com" that arguably should have been considered generic marks not entitled to federal trademark protection. 

By rejecting the U.S. PTO's proposed bright line rule, the ruling also greatly increases the uncertainty involved with marginal trademarks, increasing the cost of determining if a trademark is valid and of litigating that mark if it violates the bright line rule but could conceivably meet the looser U.S. Supreme Court legal standard. Under this decision, more cases will go to trial and fewer cases will be possible to decide in a pre-trial motion to dismiss or motion for summary judgment at a much lower costs. The failure of the court to engage with the civil litigation cost impacts of the case, however, is somewhat disappointing.

This is an important issue, in the sense that it arises frequently, but a quite narrow one that hinges a great deal upon the fact that website addresses are unique, unlike other kinds of company names with type of entity designators, and product names. Indeed, the logic of the case comes close to establishing a per se rule that genericmark.com marks are never themselves generic, which from a civil litigation perspective really would have been a better rule.

There were legitimate arguments both ways on the merits in the case, but this case joins a long streak of intellectual property cases (mostly going against intellectual property right holders) that do not show strong partisan divides in the nation's highest court. 

From the official syllabus of the opinion in U.S. PTO v. Booking.com:
A generic name—the name of a class of products or services—is ineligible for federal trademark registration. Respondent Booking.com, an enterprise that maintains a travel-reservation website by the same name, sought federal registration of marks including the term “Booking.com.” Concluding that “Booking.com” is a generic name for online hotel-reservation services, the U.S. Patent and Trademark Office (PTO) refused registration. Booking.com sought judicial review, and the District Court determined that “Booking.com”—unlike the term “booking” standing alone—is not generic. The Court of Appeals affirmed, finding no error in the District Court’s assessment of how consumers perceive the term “Booking.com.” The appellate court also rejected the PTO’s contention that, as a rule, combining a generic term like “booking” with “.com” yields a generic composite. 
Held: A term styled “generic.com” is a generic name for a class of goods or services only if the term has that meaning to consumers. Pp. 6–14. 
(a) Whether a compound term is generic turns on whether that term, taken as a whole, signifies to consumers a class of goods or services. The courts below determined, and the PTO no longer disputes, that consumers do not in fact perceive the term “Booking.com” that way. Because “Booking.com” is not a generic name to consumers, it is not generic. Pp. 6–7. 
(b) Opposing that determination, the PTO urges a nearly per se rule: When a generic term is combined with a generic Internet-domain name suffix like “.com,” the resulting combination is generic. The rule the PTO proffers is not borne out by the PTO’s own past practice and lacks support in trademark law or policy. Pp. 7–14. 
(1) The PTO’s proposed rule does not follow from Goodyear’s India Rubber Glove Mfg. Co. v. Goodyear Rubber Co., 128 U. S. 598. Goodyear, the PTO maintains, established that adding a generic corporate designation like “Company” to a generic term does not confer trademark eligibility. According to the PTO, adding “.com” to a generic term—like adding “Company”—can convey no source-identifying meaning. That premise is faulty, for only one entity can occupy a particular Internet domain name at a time, so a “generic.com” term could convey to consumers an association with a particular website. Moreover, an unyielding legal rule that entirely disregards consumer perception is incompatible with a bedrock principle of the Lanham Act: The generic (or nongeneric) character of a particular term depends on its meaning to consumers, i.e., do consumers in fact perceive the term as the name of a class or, instead, as a term capable of distinguishing among members of the class. Pp. 8–11. 
(2) The PTO’s policy concerns do not support a categorical rule against registration of “generic.com” terms. The PTO asserts that trademark protection for “Booking.com” would give the mark owner undue control over similar language that others should remain free to use. That concern attends any descriptive mark. Guarding against the anticompetitive effects the PTO identifies, several doctrines ensure that registration of “Booking.com” would not yield its holder a monopoly on the term “booking.” The PTO also doubts that owners of “generic.com” brands need trademark protection in addition to existing competitive advantages. Such advantages, however, do not inevitably disqualify a mark from federal registration. Finally, the PTO urges that Booking.com could seek remedies outside trademark law, but there is no basis to deny Booking.com the same benefits Congress accorded other marks qualifying as nongeneric. Pp. 11–14.

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