Supreme Court Holds “” Marks May be Greater Than the Sum of Their Generic Parts and Sufficiently Distinctive to Qualify for Trademark Protection

By September 10, 2020News

All trademarks are not created equal.  The value of a mark and its eligibility for registration with the United States Patent and Trademark Office (“USPTO”) depends on the mark’s distinctiveness, the extent to which a mark is capable of linking goods or services in the minds of consumers to a particular source, so as to distinguish that source’s goods or services from those of others.  A “generic” mark is on the lowest rung of the distinctiveness ladder.  It ordinarily does not qualify for trademark protection and cannot be registered because it merely identifies or references the kind of goods or services being sold and is therefore incapable of distinguishing among their producers.

However, the United States Supreme Court held this June in U.S. Patent & Trademark Office v. B.V., __ U.S. __, 140 S. Ct. 2298 (2020), that a mark comprising a combination of generic-sounding elements can be greater than the sum of its parts, distinctive enough to qualify for registration.  In, the Court rejected a sweeping rule that combining a top-level domain name like “.com” with a generic term made the resulting mark generic as a matter of law.  Instead, “[w]hether any given term is generic depends on whether consumers in fact perceive that term as the name of a class or, instead, as capable of distinguishing among members of the class.”, 140 S.Ct. at 2307.   The Court upheld the lower courts’ determination that “” in connection with online hotel reservation services was a registrable mark, not generic.

The Court made clear that registrability turns on consumer perception of the mark as a whole.  Whether “” was generic depended on “whether that term, taken as a whole, signifies to consumers the class of online hotel-reservation services.”  Id. at 2304.  The Court relied on three guiding principles under the Lanham Act—i.e., the federal trademark statute establishing the trademark registration system.  See id. at 2302, 2304.  First, a term is generic if the term names a class of goods or services rather than a particular feature or exemplification of the class.  Id.  Second, “for a compound term, the distinctiveness inquiry trains on the term’s meaning as a whole, not its parts in isolation.”  Id.  Third, the relevant meaning of the term is its meaning to consumers.  Id.

Because the district court had found consumers did not understand “” to refer generally to online hotel reservation services, the term was not generic.  Id. at 2304-05.  They did not, for example, refer to online hotel reservations services as “ providers” or to competitors of the applicant, like Travelocity, as “Booking.coms.”  Id.  The district court found, to the contrary, that the consuming public “primarily understands that ‘’ does not refer to a genus” of services but rather “is descriptive of services involving ‘booking’ available at that domain name.”  Id. at 2303 (internal quotes omitted).

Instead of challenging the district court’s findings, USPTO, which had denied registration, argued that “” marks are categorically generic.  Parsing the individual components of the mark, USPTO reasoned consumers would understand “” to refer generically to an online travel reservation service for travel, tours, and lodging because “Booking” means making travel reservations and “.com” signifies a commercial website.  USPTO argued that adding “.com” to a generic term “conveys no additional meaning” and is no different from adding “company” to a generic term, as in the nineteenth century decision in Goodyear’s India Rubber Glove Mfg. Co. v. Goodyear Rubber Co., 128 U.S. 598 (1888).

The Goodyear Court had held “Goodyear Rubber Company” was incapable of exclusive appropriation.  See, 140 S. Ct. at 2305-06.  “Goodyear Rubber” was commonly understood at the time to refer to a class of goods produced by a process known as “Goodyear’s invention” and could not be an exclusive trademark on its own.  Id. at 2305.  Adding “Company” only indicated that parties had formed a legal entity to deal in those goods.  Id. at 2306.  In seemingly categorical language, the Court in Goodyear had stated incorporating in the name of an article could not create an exclusive right to use the company name as a trademark.

[P]arties united to produce or sell wine, or to raise cotton or grain, might style themselves Wine Company, Cotton Company, or Grain Company; but by such description they would in no respect impair the equal right of others engaged in similar business to use similar designations, for the obvious reason that all persons have a right to deal in such articles, and to publish that fact to the world.  Names of such articles cannot be adopted as trade-marks, and be thereby appropriated to the exclusive right of any one; nor will the incorporation of a company in the name of an article of commerce, without other specification, create any exclusive right to the use of the name.

Goodyear, 128 U.S. at 602 (emphases added).

The Court rejected USPTO’s position that “” marks are categorically generic for multiple reasons.  Among them, USPTO’s proposed categorical rule was contrary to its past practice of registering several “” marks and would subject those marks to cancellation., 140 S. Ct. at 2305.  More importantly, the Court observed the rule ignores a unique feature of the internet domain system whereby a given domain name can only belong to one entity at a time.  Id. at 2306.   This exclusivity facilitates the use of a domain name mark as a source identifier that consumers might associate with the proprietor or its website.  Id.

As to Goodyear, the Court clarified that the case did not make “Generic Company” terms ineligible for trademark protection as a matter of law.  Id.  The Court viewed such a rule to be incompatible with the Lanham Act’s bedrock principle that generic meaning depends on consumer perception.  Id.  According to the Court, Goodyear instead stands only for the narrower proposition that “[a] compound of generic elements is generic if the combination yields no additional meaning to consumers capable of distinguishing the goods or services.”  Id.

It remains to be seen what practical effect will have with respect to “Generic Company” composites like those at issue in Goodyear.  It is difficult to imagine consumers viewing any such a composite as having source-identifying meanings not apparent from the component parts, particularly given the common tendency to refer to companies selling x products or services as “x companies.”

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