A recent decision of the US Supreme Court has attracted significant publicity. In the decision the court disagreed with the USPTO and confirmed the trademark BOOKING.COM should be registered. The decision reviews the nature of the trademark system in the US and the basic principles. For the most part the same principles apply under the Canadian system. However, Canadian courts are more lenient in the case of marks alleged to be generic, but which are well-known as source identifiers to the public.
Facts
Booking.com B.V. operates a travel-reservation website and sought to register the mark “Booking.com.” The USPTO concluded that “Booking.com” was a generic name for online hotel-reservation services and refused registration.
Booking.com B.V. sought review of this decision and chose a mode of review that allowed it to introduce new evidence not presented to the USPTO. Relying largely on this new evidence of consumer perception, the court concluded that “Booking.com”—unlike “booking”—was not generic. It was found that the consuming public primarily understood that BOOKING.COM did not refer to a genus or category off the call set beach, rather it was descriptive of services involving ‘booking' available at that domain name.
The Court then found that the term has acquired secondary meaning for hotel-reservation services and satisfied the distinctiveness requirement for registration. The Court of Appeals for the Fourth Circuit affirmed this decision.
Decision of the US Supreme Court
Registration of Trademarks in the US.
A trademark distinguishes one producer's goods or services from another's. Guarding a trademark against use by others protects the owner's goodwill and the ability of consumers to distinguish among competing producers. This protection supports the free flow of commerce and fosters competition.
The Lanham Act establishes a system of Federal trademark registration. The owner of a registered mark enjoys valuable benefits, including a presumption that the mark is valid. In effect a trademark owner is armed with potential claims for relief.
Prime among the conditions for registration, the mark must be one by which the goods of the applicant may be distinguished from the goods of others. Distinctiveness is often expressed on an increasing scale: Word marks may be (1) generic (wine); (2) descriptive (super); (3) suggestive (Tide for laundry detergent) ; (4) arbitrary (Camel for cigarettes); or (5) fanciful (Kodak film).
The more distinctive the mark, the more readily it qualifies for registration. The most distinctive marks — those that are “‘arbitrary' ‘fanciful' or ‘suggestive'”— are registrable because they are “inherently distinctive.”
“Descriptive” terms are not eligible for registration based on their inherent qualities alone. But to be registered, descriptive terms must achieve significance in the minds of the public as identifying the applicant's goods or services—a quality called “acquired distinctiveness” or “secondary meaning.”
At the lowest end of the distinctiveness scale is “the generic name for the goods or services.” The name of the good itself (e.g., “wine”) is incapable of distinguishing one producer's goods from the goods of others and is ineligible for registration.
Challenge
The USPTO challenged the decision of the Court of Appeals on a sole ground: It urges that, as a rule, combining a generic term with “.com” yields a generic composite.
On the appeal several guiding principles were common ground. First, a “generic” term names a “class” of goods or services, rather than any particular feature or exemplification of the class. A generic term refers to the genus of which the particular product is a species. Second, for a compound term, the distinctiveness inquiry focuses 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.
All agreed that eligibility for registration, turned on the mark's capacity to distinguish goods or services. The USPTO also acknowledged only one entity can occupy a particular Internet domain name at a time, so a consumer familiar with that aspect of the domain-name system can conclude that BOOKING.COM refers to a specific entity.
Consumer perception cannot be ignored. A compound of generic elements is generic if the combination yields no additional meaning to consumers capable of distinguishing the goods or services.
The USPTO's principal concern was that trademark protection for a term like “Booking.com” would hinder competitors in that such a registration could exclude or inhibit competitors from using the term “booking” or adopting domain names like “ebooking.com” or “hotel-booking.com.”
It was said that in assessing the likelihood of confusion, a court considers the mark's distinctiveness. The weaker a mark, the fewer are the junior uses that will trigger a likelihood of consumer confusion. When a mark incorporates generic or highly descriptive components, consumers are less likely to think that other uses of the common element emanate from the mark's owner. Similarly, in a crowded field of lookalike marks (e.g., hotel names including the word “grand”), consumers may have learned to carefully pick out one mark from another.
This approach guarded against the anticompetitive effects that the USPTO identified, ensuring that registration of “Booking.com” would not give its owner a monopoly on the term “booking.” The Court rejected the position advanced by the USPTO and dismissed the appeal.
Canadian Position
For the most part the principles discussed above apply in Canada. However, there is no rule that combining a generic term with “.com” yields a generic composite. Also, the test for determining when a mark is generic is less severe.
A domain name which satisfies the registrability requirements of the Trademarks Act and is used as a trademark may be protected as a trademark. In Canada, this generally means that such trademarks must be registered in association with services. Filing evidence of secondary meaning can be required depending on the mark. Such a registration will be limited to Canada notwithstanding that the domain name can be accessed from anywhere in the world.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
