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US Supreme Court On "generic.com" Trademark: A Tale Of Missed Opportunities

Shashank Pandey & Priyanshi Sarin
20 July 2020 12:11 PM GMT
US Supreme Court On generic.com Trademark: A Tale Of Missed Opportunities
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On 30th June 2020 Supreme Court of the United States (SCOTUS) in United StatesPpatent and Trademark Office et al. v. Booking.comdealt with the issue of whether the combination of generic terms is also generic for the purpose of trademark registration. SCOTUS by an overwhelming majority (8 judges) held otherwise i.e. such combination is not generic in nature. The sole dissenting opinion was written by J Breyer who held respondent's Trademark as generic in nature.

For the purpose of readers' convenience the summary of the above mentioned case is perused below.

WHAT THE COURT SAID

Booking.com (Respondent) is a digital travel company that provides hotel reservation and other services under the brand name "Booking.com" which is also the domain name of its website. The company filed for federal registration of their trademark containing "Booking.com". The US Patent Trademark Office (PTO) and PTO's Trademark Trial as well as the Appeal court rejected their claim and held that 'Booking.com" is generic for the services at issue and secondly on grounds of the trademark being descriptive in nature. "Booking" means travel reservation and ".com" signifies a commercial website. Thereby, on Appeal the US District Court relied on evidence of consumer perception inquiry provided by"Booking.com" wherein 74% people identified Booking.com as brand name, to hold that the mark is not generic in nature. Additionally District Court also held the mark to be descriptive in nature which has acquired "secondary meaning". Descriptive marks are registrable only if they have acquired "acquired distinctiveness" or have "secondary meaning". The Court of Appeal (4th Circuit) upheld the District Court's ruling. A further appeal was preferred before SCOTUS by PTO.

SCOTUS rejected USPTO's arguments against Booking.com registration as Trademark. SCOTUS adopted the District Court's consumer perception inquiry approach to suggest mark being not generic. SCOTUS also rejected PTO's argument that using such generic names will be anticompetitive as the proprietor of the work can exclude other competitors from using such generic words. This was rebuked by the SCOTUS on the presumption that an anti- competitive advantage cannot be the sole ground to reject the trademark altogether. PTO's argument that allowing such generic domain would allow an unfair advantage to the proprietor in search results. SCOTUS held that this is true for all the descriptive marks hence not maintainable.

The authors are thereby dealing with the two prominent aspects of the case as SCOTUS fails to address the existing norms regarding generic trademarks which have wider ramification across the globe.

THE LEGAL STANDARDS FOR DETERMINING GENERICNESS

According to settled principles of Trademark law generic names are ineligible for trademark registration. A mark to be registered as a trademark must fulfil the basic essentials: unique, capable of identifying itself and distinguishing its goods and services from those of others and acts as a reliable source identifier of concerned goods and services on the internet. The same set of principles applies to domain name trademarks.[1]

Genericism had been a relatively well-settled doctrine in trademark law until the explosion of the Internet. Traditionally, a term is generic in two ways. First, it is generic ab initio, or generic at inception, as when the ordinary meaning of the term is already the name of the goods or services. Second, the term can become generic, where it was fanciful or arbitrary at the time of adoption but becomes generic through usage.[2] For instance XEROX is not a generic term ab initio but has become generic through usage. Interestingly this Trademark was challenged to be removed from the trademark register before Intellectual Property Appellate Board (IPAB) but was denied by the Board.

Generic terms lie at the bottom of hierarchy of distinctiveness of a mark and cannot become a trademark under any circumstances. As explained by one commentator, a generic term is "the name of the product or service itself—what the product is, and as such ... the very antithesis of a mark. [3]

Courts sometimes refer to generic terms as "common descriptive" names; the language used in the Lanham Act (US Trademark Act) for terms incapable of becoming trademarks. Thus description marks are also not registrable per se. However they can be registered it they have acquired a secondary meaning or acquired distinctiveness. District court held Booking.com to have acquired secondary meaning hence not generic. SCOTUS also accepted this argument. Thus it is imperative to discuss the above two concepts

Secondary meaning or acquired distinctiveness

A mark is presumed to have acquired a secondary meaning when the mark itself should bring to mind the plaintiff's product to the exclusion of all others and overtime the usage has entailed it such distinctiveness to be a trademark.The most prominent example of such secondary meaning is Apple. Secondary meaning is acquired when the name and the business becomes synonymous in the minds of the public and submerges the primary meaning of the word.

In Bhole Baba Milk Food Industries Ltd v. Parul Food Specialities (P) Ltd,Delhi HC refused to allow for a trademark over the word "Krishna". Though the trademark was already registered, the Court stated that the word Krishna was as common as "John in the West". Thus, a word as common as "Krishna" would not afford the Appellant's product any secondary distinctiveness. Secondary distinctiveness/meaning essentially implies that the usage of the term reminds people of the product or its source. And, overtime the usage has entailed it such distinctiveness to be a trademark.

The three modes of proving this distinctiveness are: prior registration, five years of use and actual evidence. Booking.com used the last option by furnishing user survey. SCOTUS also recognised consumer perception survey as leading evidence in favour of Booking.com thus accepting its distinctiveness. In Bayer Co. v. United Drug Co, a case written over 50 years ago concerning the cancellation of trademarks for genericness still case remains the foundation for the majority of genericness opinions.Judge Hand articulated a standard for determining genericness based on levels of consumer understanding. However subsequent decisions diluted this standard. The Supreme Court in Kellogg Co. v. National Biscuit Co. required the party alleging that the term had acquired a secondary meaning and seeking the exclusive right to its use to "show that the primary significance of the term in the minds of the consuming public is not the product but the producer. This standard implies that a term that designates the product and provides some indication of the producer still can be generic if it does not primarily indicate the producer. Thus, this standard permits a lesser level of consumer understanding than that required by Judge Hand's formula in Bayer. Thus it would appear that SCOTUS overemphasised on consumer perception of Booking.com without exploring techniques to diagnose the consumer opinion. SCOTUS however does recognise these other techniques and J Sotomayor pointed this out in his concurring opinion.

An analysis of the genericness cases demonstrates that the courts have not developed a systematic standard to be applied in all such actions. Absence of ways to explore these actual evidences has led to the development of different standard for determining genericness that combines phraseology of Kellogg with that of Bayer.[4]This third standard requires that, for a mark to be generic, it not only must have "some significance to the public as an indication of the nature or class of an article but the principal significance of the word must be its indication of the nature or class of an article, rather than an indication of its origin."[5]

UNFAIR COMPETITIVE ADVANTAGE

PTO raised arguments that generic.com will exclude other competitors from using such generic word which defines the very nature of service. J Breyer advocated PTO's argument in his dissenting opinion. PTO also cited an unfair advantage that will acrrue to the proprietor of such mark in search results. PTO's arguments are is some respect well founded.

It is true that domain names can function and be protected as trademarks[6], however the genericness doctrine in trademark law, maintains that a generic term-i.e., one that names the good or service itself-is precluded from protection because of the inherent risk of monopolizing a word vital to describing or naming the product sold.[7] Underlying the genericness doctrine is the principle that some terms so directly signify the nature of the product that interests of competition demand that other producers be able to use them even if terms have or might become identified with a source and so acquire 'de facto' secondary meaning.[8]

In India Bharat Matrimony, a part of matrimony.com obtained an injunction against many players in the market for using the word "matrimony". Shaadi.com also proceeded to restrain "secondshaadi.com" from using the generic word "shaadi" as it would cause confusion in the minds of the consumer. The similarity in the name may lead an unwary user of the internet of average intelligence and imperfect recollection to assume a business connection between the two. This is aggravated by the use of the generic words that denotes the nature of the service provided here booking.

In Schering Corporation vs Messrs.United Biotech(P) Ltd court said that when a trade mark is found from the common generic name, no single proprietor can claim absolute monopoly in such name or trade mark. Both the parties agreed that Booking is a generic word.

PTO's argument that "Booking.com" will be readily available on the search engines also holds true to some extent. Trademark and domain name have different purpose to serve. The purpose of Trademark law is to foster competition and support the free flow of commerce. It helps attract certain characteristics such as durability, performance, efficiency and after sale, service to a particular product sold at a value under that brand[9].Domain name on the other hand accelerates income by the 'goodwill' generated on the internet and thereby many businesses have discovered that domain names containing terms that precisely define the nature of their services or products are most likely to leave a lasting impression on consumers. Business owners look for names incorporating the generic term for their goods and services because a website's commercial success depends largely on its ability to attract visitors[10].Another facet of this success is how easily a consumer can find the web site using a simple search of the Internet.[11] After all, it is hard to imagine a better domain name for a boat manufacturer than "boats.com." Similarly, a travel agent would likely attract new customers with the name "travel.com" or "travelagency.com. Thus a choice of "genric.com" is not so much driven by as "identification of source" but rather accessibility on the internet.

US court in J. Kohnstam, Ltd. v. Louis Marx and Company, said that no matter how much money and effort the user of a generic term has poured into promoting the sale of its merchandise and what success it has achieved in securing public identification, it cannot deprive competing manufacturers of the product of the right to call an article by its name.

PTO raised the abovememtioned argument but was rejected by SCOTUS and it refused to pass any observation on this. On the contrary it recognised that "booking.com" accepted booking to be generic but assured the court it won't prevent competitors from using the word "booking". SCOTUS relied on this assurance leaving the issue unanswered.

Economically, granting a private monopoly in a generic term, in the form of an exclusive trademark right, would confer upon its owner "socially wasteful opportunities to earn rents" from competitors in the form of licenses and the like. Second, even if there is no direct rent-taking, there are still rents to be earned by virtue of the costs imposed upon competitors forced to find less efficient linguistic substitutes to describe a given product. It is here that the primary economic harm caused by generic marks can be found. Exclusive control of a generic mark imposes artificial problems of marketing by forcing competitor to use more cumbersome means of identifying their product, with attendant additional costs that must either be absorbed by the competitor or passed on to the consumer in the form of higher prices.

Trademark law ensures that no such costs are imposed. Granting trademark protection to "Booking.com" marks confers additional competitive benefits on their owners by allowing them to exclude others from using similar domain names such as "Bookings.com," "eBooking.com," "Booker.com," or "Bookit.com.".

INDIAN STAND ON THE "GENERIC.COM" DEBATE

In India there is an accepted understanding that Generic terms should be "free for all to use", no one person should be entitled exclusive rights to the generic name of any item and any possibility of a monopoly is thwarted. The approach has been applied with the same vigour on the issue of domain trademark.

Section 9(1) of The Trade Marks Act, 1999 which lays down the law related to the absolute grounds for refusal of registration provides that the trademarks devoid of distinctiveness or those which are solely indicative of the kind of the quality of the goods or services or the trademarks which consist of words customary in the current language shall not be registered.

Indian Supreme Court in Satyam Infoway Ltd. vs. Siffynet Solutions, was posed with the question whether domain names are recognizable as intellectual property, such as trademarks. The court held, SC observes that

"...the original role of a domain name was no doubt to provide an address for computers on the internet. But the internet has developed from a mere means of communication to a mode of carrying on commercial activity. With the increase of commercial activity on the internet, a domain name is also used as a business identifier........ Consequently, a domain name as an address must, of necessity, be peculiar and unique and where a domain name is used in connection with a business, the value of maintaining an exclusive identity becomes critical. As more and more commercial enterprises trade or advertise their presence on the web, domain names have become more and more valuable and the potential for dispute is high." (emphasis intended)

Most recently inMatrimony.com Limited vs. Kalyan Jewellers India Limited and Ors. the contention to trademark "MATRIMONY" was answered by the court in the following words:

"One cannot expect the consumer to use only the particular words as 'AdWords'. After all, the word 'Matrimony' is the common word in the field of marriage. Even before the advent of internet, the newspapers used to carry matrimony columns. When the general public understand the words in a particular way, a different meaning must be given. The appellant has not demonstrated that it has attained the secondary meaning especially when the nature of trade and business is in tune with the natural meaning of the word."

Delhi High Court in BigtreeEntertainment Pvt Ltd brain Seed Sportianment Pvt ltddenied the Plaintiffs, proprietors and owners of the website bookmyshow.com, an interim injunction against the Defendant's use of the domain bookmysports.com. The court gave a threefold reasoning in the judgment: 1)the existence of domain names using the prefix BOOKMY, both prior and subsequent to the Plaintiff's mark, indicated that the prefix was descriptive, 2) the prefix is an apt description of a business that is involved in the booking of a particular thing for its consumers, whether it is a concert, a movie, or a sports facility and 3) he Defendant had led evidence suggesting that the prefix BOOKMY was in use by other companies, and the Plaintiffs had not led evidence to show that BOOKMY is only associated to the Plaintiff's trademark, the Plaintiff was unable to prove that the prefix had obtained distinctiveness or a secondary meaning, in order to accord it protection. The third reason is relevant here vis-à-vis Booking.com judgment.

J.R. Kapoor vs. Micronix India, Skyline Education Institute (India) Pvt. Ltd. vs. S.L. Vaswani&Anr., and the case of Living Media India Ltd. &Ors. vs. Alpha DealcomPvt. Ltd. &Ors.,have reinforced the above opinions by stating that no exclusive rights can be claimed over words/expressions that are descriptive and/or in common general use.

Interestingly Booking.com is a registered trademark (2298594) in India. Other most common "generic.com" registered trademark includes ISTEN.COM (888264), MATCH.COM (1269727), ERASER.COM (1994835).

Thus, it can be deduced that Indian courts have n absolute view or which appears to be more suitable for competition. These decisions are decided at the enforcement stage of the trademark and India still shows a liberal approach towards registration of "genric.com" trademarks. At the enforcement stage or passing off Indian courts have been reluctant to pass injunction in favour of proprietor of such marks.

Concluding remarks

The internet provides a large scope for expansionism. Unlike trademark domain are not restricted by jurisdiction and are exclusive in nature. Thus there will be a tendency to adopt a generic.com as a trademark as it will convey only one source. However these "generic.com" trademarks come before the court either during the enforcement stage of trademark or after considerable period of litigation. This period allows the mark to obtain secondary meaning. This still doesn't address the initial question of eligibility of "generic.com" as trademarks.

The USPTO has maintained a stand that a mark composed of a generic term and a top-level domain (TLD) will be refused registration because the mark is generic and the top-level domain has no trademark significance[12]. Marks such as "cars.com" for cars sold online and "construction.com" for construction services offered online is summarily rejected[13]. Howver USPTO should analyze the second level domain and the top level domain when determining if a mark is registrable. SCOTUS also failed to take note of the differentiation and allowed carte blanche protection to "generic.com" trademarks.

Competitors may adopt the variations of such "generic.com" trademark however this practice will lead to multiplicity of similar domain names based on a generic word means that each such additional domain name will likely be ineffective in reaping the benefits presumably flowing from the registration of the generic word. Absence of uniform analysis has and will encourage such as cybersquatting and cyberpiracy.

It is imperative that courts adopt a uniform standard for determining generosity. Granting Booking.com a trademark without a proper determination tests for domain trademarks sets a wrong precedent in the minds of potential entrepreneurs who would manipulate this judgment for acquiring similar trademarks and not only deceive the public but also threaten competitors with infringement suits when their domain name is even remotely similar.
Views are personal only.
(Shashank Pandey is a 5th year IPR hons student at Dr Ram Manohar Lohiya National Law University and Priyanshi Sarin is a 4th yr student of Symbiosis Law School, Pune.)


[1]Neil J. Wilkof, Trademarks and the Public Domain: Generic Marks and Domain Names, 6 Int'l Intell. Prop. L. &Pol'y 21-1 (2001).

[2]Park 'NFly, Inc., v. Dollar Park and Fly, Inc., 718 F.2d 327, 329 (9th Cir. 1983), rev'd on other grounds, 469 U.S. 189 (1985).

[3] 2 J. THOMAS MCCARTHY, TRADEMARKS AND UNFAIR COMPETITION § 12:1 [1] (4th ed. 1997)

[4]King-Seeley Thermos Co. v. Aladdin Indus. Inc., 321 F.2d 577, 580 (2d Cir.

[5]Feathercombs, Inc. v. Solo Prods. Corp., 306 F.2d 251, 256 (2d Cir.) (first case articulating this standard), cert. denied, 371 U.S. 910 (1962).

[6]Tata Sons Ltd. V. Manu Kosari,2001 PTC 432, (Del.)

[7]2 J. THOMAS MCCARTHY, MCCARTHY ON TRADEMARKS AND UNFAIR COMPETITION § 12:1 (4th ed. 2002) [hereinafter MCCARTHY].

[8]Mary LaFrance, Initial Impressions: Trademark Protection for Abbreviations of Generic or Descriptive Terms, 45 Akron L. Rev. 201 (2012).

[9]Ashwani Kumar Bansal, Law of Trademark in India, 9, (2009).

[10]Business.com Goes for $7.5m, ONLINE REPORTER, Dec. 6, 1999, at I (reporting that generic domains like "business.com, " "furniture.com," and "drugs.com" are prized by net start-ups seeking to carve out a distinct identity for themselves amidst the .com clutter)

[11]See Ronald E. McGaughey& Kevin H. Mason, The Internet as a Marketing Tool, 7/6/98 J. MKTG. THEORY & PRAC. Il l (describing how "The Internet may have more potential as a marketing tool than any of its media predecessors, including the television.").

[12] UNITED STATES PATENT & TRADEMARK OFFICE, TRADEMARK MANUAL OF

EXAMINING PROC., § 1215.05 (3rd ed. 2002), available at http://www.uspto.gov/web/offices/tac/tmep/

[13] In re Martin Container, Inc., 65 U.S.P.Q. 2d 1058, 1060 (TTAB 2002).

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