In a ruling that could have implications for applicants seeking trademark registration for domain names comprised primarily of descriptive or generic wording, the US District Court for the Eastern District of Virginia has overturned a finding by the Trademark Trial and Appeal Board (TTAB) that the mark BOOKING.COM was generic for travel agency services in Class 39 and hotel reservation services in Class 43.

Facts

The court’s decision in Booking.com BV v Matal (16-425, ED Va August 9 2017) has marked the latest chapter in the applicant’s decade-long effort to register BOOKING.COM trademarks in the United States. This decision concerned three US extensions of international registrations and one national application, all dating back to 2011 and 2012, after a prior US extension sought in 2007 was abandoned in 2009. The applications, which featured the wording ‘booking.com’, were as follows:

                     

85485097                                                                                         79114998

          

79122365                                                                                         79122366

The applicant then filed a civil action pursuant to 15 USC Section 1071(b), seeking a review of the board’s decision on a new record before a US district court, rather than a traditional appeal to the Court of Appeals for the Federal Circuit. In the proceedings before the district court, the evidence was largely similar to the record below, with one notable exception – the applicant offered a survey in which consumers were asked to differentiate between brands and generic wording.The examining attorney refused registration of the applicant’s four marks on the basis of genericness and, in the alternative, lack of acquired distinctiveness. In February 2016 the TTAB affirmed the examining attorney’s refusal to register marks on the grounds of genericness. The TTAB also pointed out that the marks, even if not generic, were at best highly descriptive and lacked acquired distinctiveness.

Genericness

In making a determination of genericness, a court first identifies the goods or services at issue and then considers whether consumers would primarily perceive the mark as referring to those goods or services. Here, the court examined the public perception of the marks by first looking at the individual components, finding ‘booking’ to be generic for the applicant’s services based on dictionary definitions and third-party use of the term.

Domain names

The court then turned to the ‘.com’ element. It began by reviewing the treatment of legacy generic top level domains (gTLDs) such as ‘.com’ or ‘.org’ by the Federal Circuit, which has generally held that such gTLDs do not serve any source-indicating function and do not substantially change the commercial impression of an otherwise unregistrable mark. The Eastern District emphasised that the Federal Circuit cautioned against applying a bright-line rule that gTLDs never affect the registrability of a mark, while the usual practice of the US Patent and Trademark Office (USPTO) actually functioned as a per se rule.

The court analogised domain names to phone numbers, as in a 2001 Federal Circuit case involving the mark 1-888-M-A-T-R-E-S-S (In re Dial-A-Mattress, 240 F3d 1341 (Fed Cir 2001)). The Federal Circuit noted that the phone number mark had a mnemonic function that created a source-identifying quality when viewed in its entirety. The USPTO resisted this characterisation, comparing gTLDs to business name identifiers such as ‘Inc’. The court disagreed, writing that domains create a unique name that can be owned by only one entity. The court also noted that the USPTO has registered numerous domain name trademarks that feature descriptive wording with apparently no adverse effects on the ability of others to use that same descriptive wording. The court emphasised that its opinion should not create an unfettered right to register domain name trademarks featuring generic or descriptive wording – it was simply holding that such marks as a whole may be descriptive rather than generic and are protectable with a showing of secondary meaning.

Decision

In light of that opinion, the court considered the evidence of public perception of the overall mark. While the court gave little weight to the USPTO’s evidence of descriptive use of phrases and domains including the term ‘booking’, it found the applicant’s evidence showing that consumers recognised BOOKING.COM as a brand to be persuasive. In particular, the applicant introduced a Teflon survey, in which experts screen consumers by asking questions about their abilities to differentiate generic wording from brand names. Consumers who are able to do so are then asked about the subject terms. In the survey taken by the applicant’s expert, nearly 75% of respondents identified BOOKING.COM as a brand name. After weighing the evidence, the court concluded that the USPTO had not met its burden of showing that BOOKING.COM was generic and that the mark was instead merely descriptive.

The court then reviewed the evidence of secondary meaning. Although the court concluded that on the survey evidence the applicant met its burden of showing acquired distinctiveness for hotel reservation services, the same was not true for travel agency services. Accordingly, the court reversed the TTAB’s finding of genericness and ordered the USPTO to register two of the applicant’s marks in Class 43 for hotel reservation services, but denied the applications for travel agency services in Class 39. The court further remanded the remaining two applications for consideration of whether the design elements also merited protection in Class 43 for hotel reservation services.

Although the court’s order could open the door to applicants seeking to register their domain names as trademarks, applicants should still think twice about the trademark capability of a domain name that consists of a generic or descriptive term with a gTLD. When an applicant’s trademark is comprised of a merely descriptive or generic word and a gTLD, the addition of the gTLD could help an applicant obtain the benefits of registration – assuming the applicant is able to show acquired distinctiveness. When the mark is not considered generic because of the inclusion of the gTLD component, it may be considered so highly descriptive that the burden of showing acquired distinctiveness may be substantial or, in some circumstances, nearly impossible. At the same time, the inclusion of a gTLD in a trademark registration may also affect the scope and benefits of protection afforded by the registration. For example, even after the marks are registered, the owner’s submission to the Internet Corporation for Assigned Names and Numbers’ (ICANN’s) Trademark Clearinghouse will be refused under ICANN’s rules because of the inclusion of the gTLD element. Because of those limitations, applicants seeking strong trademark protection should still aim for marks that are protectable without the aid of any additional components.

Although the government has not appealed the court’s decision, the matter remains open as the parties resolve outstanding issues related to costs and the specific language of the court’s remand.

“The dispute has not ended with the court’s August decision. The USPTO subsequently moved the court to amend its order, asking to remand the applications for “further administrative proceedings” consistent with the court’s findings, rather than ordering the marks to be registered. The USPTO also moved for the court to order Booking.com to pay its expenses in litigating the appeal pursuant to 15 U.S.C. § 1071(b)(3), which states that “all the expenses of the proceeding shall be paid by the party bringing the case, whether the final decision is in favor of such party or not.” On October 26, 2017, the court issued an opinion regarding the pending motions. The court denied the motion to amend its judgment, finding that its order left no factual questions unresolved and therefore no need for “further administrative proceedings.” Furthermore, the court ordered Booking.com to pay the USPTO’s full expenses in litigating the appeal, including the expenses of the government lawyers who handled the case. Time will tell if this latest order marks the end of the case, or if the matter continues to the Court of Appeals for the Fourth Circuit.”

The article was originally published on October 13th, 2017 in the World Trademark Review (WTR).