April 23, 2019

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Using Top-Level Domains to Overcome the Generic Trademark Bar

A generic trademark or brand name is one that—due to its popularity or common usage—has become synonymous with a general class of products or services. Famous trademark-turned- generic product names include Thermos and Velcro.

Under U.S. trademark law, generic trademarks can never be federally registered and protected under the Lanham Act (the Trademark Act of 1946) because the mark name refers directly to the class of a product or service it belongs to and is incapable of distinguishing that good or service from other goods or services on the market. Generic names must remain in the public domain, free for the public to use. Moving up the trademark scale of distinguishable marks, descriptive trademarks can be protected from public use if an applicant can show that they have acquired distinctiveness.

In September 2017, the U.S. District Court for the Eastern District of Virginia injected life into potentially generic trademarks when it reversed the Trademark Trial and Appeal Board (“TTAB”)’s decision that denied the trademark applications for “BOOKING.COM.”

Plaintiff previously filed a federal trademark application for BOOKING.COM for both travel agency services such as making reservations for transportation and/or travel and tour ticket reservation services (Class 39) as well as for making hotel reservations for others in person and via the internet (Class 43). Plaintiff had previously obtained international registration under the Madrid Protocol, an international trademark recognition system, for the plain word mark BOOKING.COM under the same class of services.

During the USPTO review, Plaintiff asserted the marks had acquired distinctiveness, but the USPTO refused registration because the word mark was generic as applied to the relevant services, and in the alternative, the mark was merely descriptive, and plaintiff failed to show the mark acquired distinctiveness. The decision was appealed to the TTAB, which affirmed registration refusal after holding that “booking” directly referred to “a reservation or arrangement to buy a travel ticket or stay in a hotel room” or “the act of reserving such travel or accommodation,” and was generic for travel agency and hotel registration services. Significantly, the TTAB also held that “.com” failed to negate the genericness of the word “booking.”

On appeal to the Eastern District of Virginia, the court’s first step was to determine if “booking” was generic. The court used the applicable test for genericness and (1) identified the class of product or service to which use of the mark is relevant; (2) identified the relevant purchasing public of the class or service; and (3) determined whether the primary significance of the mark to the relevant public was to identify the class of product or service to which booking.com related. As listed in plaintiff’s trademark registration application, the class of product or service for use of the booking.com mark was travel and tour ticket reservation services and making hotel reservations for others. Because the application sought registration for in-person and online travel, tour, and hotel registration services, customers who used travel, tour, and hotel reservation services in-person or online were the relevant purchasing public. The third prong examined whether the primary significance of the term in the consuming public’s mind was not the product but the producer. The court considered “booking” and “.com” separately before considering them in combination.

Analyzing “booking” alone, defendants established through sufficient evidence—dictionary definitions of booking, plaintiff and its competitors’ use of the term in the manner of making a reservation, and public use of the term—that “booking” by itself was the common descriptive name for both the act of making a reservation and the reservation itself.

When the court considered “booking” and “.com” as a whole, plaintiff argued that the combination of “booking” and “.com” signaled a domain name, part of an electronic address on the Internet that was uniquely capable of indicating the source of a product or service. Defendants countered that “.com” merely denoted services offered via the Internet, pointing to other Federal Circuit cases where a top-level domain (“TLD”) term like “.com” had no source-identifying significance.

Significantly, the court distinguished this case from the other Federal Circuit cases mainly because they were decided under the deferential substantial evidence standard, a much harder standard to meet than the de novo review at stake here. Substantial evidence requires relevant evidence that reasonable minds might accept as adequate to support a conclusion, while de novo review allows the court to act as factfinder, consider the matter anew, and refrain from giving any deference to the lower court’s decision.

The court found that when combined with a second-level domain (“SLD”), TLDs generally have source-identifying significance, and the SLD + TLD combination is generally a descriptive mark that is protectable upon a showing of acquired distinctiveness. They based this reasoning on that fact that a top-level domain plus a second-level domain equals a domain name, which, like a telephone number, is unique. Contrary to defendant’s argument, adding a TLD such as “.com” to a generic SLD does more than indicate that a company offers services via the internet; it indicates a unique domain name that can only be owned by one entity.

Defendants raised several policy concerns, one of which being that granting trademark protection to domain names with a generic SLD would prevent competitors from using the generic term in their domain names and would hamper their ability to communicate the nature of their services. But the court stated that the descriptive nature of domain name marks with a generic SLD significantly limit the protection the relevant goods and services will receive, thereby safeguarding competition and public use.

Having determined that the combination of SLDs and TLDs could yield a distinctive trademark, the court analyzed whether plaintiff made a sufficient showing that “booking.com” had acquired distinctiveness in the market for applicant’s goods and services. The court considered evidence of the public’s understanding of BOOKING.COM, the most striking piece of evidence being a lack of evidence; defendants could not point to any purchaser testimony, consumer surveys, newspaper articles, websites, or other publications demonstrating that either the consuming public or plaintiff’s competitors refer to travel and hotel reservations services offered online as “booking.coms.”

Defendants pointed to fifteen third-party websites that included booking(s).com in their larger domain names, but the court found this evidence unpersuasive because the characters booking.com in a longer domain name is not the equivalent of describing one’s service as a booking.com.

Plaintiff, on the other hand, offered sufficiently persuasive evidence that the consuming public understood BOOKING.COM to be a specific brand, not a generic name for only booking services. The most significant, new piece of evidence following the TTAB’s decision was plaintiff’s “Teflon survey,” which is the most widely used survey format for measuring consumer opinion in a genericness challenge.

Plaintiff’s Teflon survey revealed that 74.8% of 400 respondents identified BOOKING.COM as a brand name, and the survey was conducted by a reliable statistician who administered over 200 trademark-related services. While defendant made a number of challenges to the strength of the survey, the court was persuaded by the statistician’s decision to limit the survey to online consumers, his methods used to instruct respondents on the distinctions between generic and brand names, and the ordering effects were expected and appropriately controlled for through the survey’s design.

Plaintiff, therefore, met its burden of showing that BOOKING.COM acquired distinctiveness—that the descriptive domain name mark “has become sufficiently distinctive to establish a mental association in buyers’ minds between the alleged mark and a single source of the product.” Courts like the Eastern District of Virginia consider (1) advertising expenditures; (2) consumer studies linking the mark to a source; (3) sales success; (4) unsolicited media coverage of the product; (5) attempts to plagiarize the mark; and (6) length and exclusivity of the mark’s use.

Plaintiff offered billions of customer impressions via internet and television advertising, a JD Power & Associates survey recognizing plaintiff as having the highest customer satisfaction rate of any travel site in the United States, the Teflon survey, financial records showing that U.S. customers conducted billions of dollars’ worth of transactions each year, over 1200 news articles published in the U.S. referencing BOOKING.COM, eleven years of uninterrupted use of BOOKING.COM, and substantial social media followings for the plaintiff.

The court noted that the JD survey was designed to gauge the relative popularity of a product, not the source identifying effect of the mark and was entitled to minimal weight. But the Teflon survey was a generally accepted way of measuring secondary meaning. The court found it significant that there was no evidence that “any other party offering travel agency services refers to itself as a “booking.com.”

The court then examined whether plaintiff’s mark established secondary meaning within the two classes of marks set forth in its applications—Class 39 for travel agency services and Class 43 for hotel reservation services. The court found plaintiff’s evidence often simply referenced BOOKING.COM, and, where it did differentiate, it referred only to plaintiff’s hotel reservation services.

Therefore, plaintiff failed to carry its burden of establishing BOOKING.COM’s acquired distinctiveness as to Class 39 travel agency services, but plaintiff did have strong evidence for acquired distinctiveness within Class 43 hotel reservation services. The court then ordered the USPTO to register BOOKING.COM as to Class 43 services and remanded to the USPTO to determine whether the design and color elements in those two applications, in combination with the protectable wordmark, were eligible for protection as to the Class 43 services.

The Eastern District’s BOOKING.COM decision is significant because Teflon-type surveys are not always found persuasive by various courts. Any applicants—particularly in the Fourth Circuit— who are trying to appeal a registration refusal by the TTAB should make note of the specific characteristics and distinguishing factors in the Teflon survey found persuasive by this court. This case also raises the issue of certain competitors in an industry seeking to claim rights over marks that border on generic.

If a company believes its trademark may have acquired distinctiveness in its industry, it should seek protection and attempt to ensure that its mark does not become synonymous with the product name.

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About this Author

Gene Markin Attorney Stark & Stark Law Firm
Shareholder

Gene Markin is a Shareholder in Stark & Stark’s Complex Commercial, Intellectual Property, and Cannabis Litigation Groups where he concentrates his practice on complex litigation matters involving copyright protection and infringement, trademark and trade dress infringement and enforcement, trade secret litigation, false advertising, domain name disputes, unfair competition, class actions, fraud and consumer fraud, shareholder and partner disputes, breach of contract, cannabis business disputes, cannabis intellectual property matters, cannabis insurance coverage...

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