In an important new ruling, Booking.com B.V. v. Matal, the U.S. District Court for the Eastern District of Virginia — on an appeal from the PTO under 15 U.S. § 1071(b) — reversed the TTAB’s finding that the term BOOKING.COM is generic for travel agency and hotel reservation services. As John Welch notes,
The court found that plaintiff had demonstrated that BOOKING.COM has secondary meaning as to hotel reservation services, but not as to travel agency services. A Teflon-type survey conducted by Friend-of-the-Blog Hal Poret persuaded the court that BOOKING.COM is not generic for these services. . . .
The opinion includes a long discussion of the Board’s treatment of domain names as marks.
It’s worth reading, because it is thorough, expansive, correct and will be very influential. The decision includes treatment of decisions concerning trademarks, or would-be trademarks, such as Hotels.com and 1-800-MATTRESS.com.
There’s a lot going on here. First, the court addresses the extent to which it will rely on the Federal Circuit’s controversial precedent on genericness, which, of course, is not binding on a court sitting in the Fourth Circuit. Writes the district court (citations omitted; emphases added):
There . . . appears to be a tension between the Federal Circuit’s statement that a per se rule that TLDs cannot be source identifying would be “legal error” and the outcomes of these cases, which show that the USPTO’s guidance on TLDs functions as a per se rule. . . .
Beyond the tension within the cases, the Federal Circuit’s TLD precedents also demonstrate the difficulty of distinguishing between generic and descriptive marks. . . . [It]t would be imprudent to adopt a sweeping presumption denying trademark protection to a whole category of domain name marks in the absence of robust evidence that public ownership of this language is necessary for consumers and competitors to describe a class of products or services. . . Most importantly, in each of these TLD cases the Federal Circuit reviewed TTAB decisions under the deferential substantial evidence standard, a point that was repeatedly emphasized in the cases. By contrast, under § 1071(b) this Court is required to conduct a de novo review.
That last nugget reminds us of an important consideration a party should weigh when contemplating whether to appeal from the TTAB via the Federal Circuit or by bringing a civil action in civil court (not necessarily the Eastern District of Virginia, by the way — see 15 U.S. § 1071(b)(4)): The Federal Circuit reviews PTO decisions from the perspective of the agency’s presumptive validity, and a district court does not. Good move here by Booking.com.
The essence of the ruling:
[W]hen combined with an SLD [“booking”], a TLD [“.com”] generally has source identifying significance and the combination of a generic SLD and a TLD is generally a descriptive mark that is protectable upon a showing of acquired distinctiveness. . . .
To illustrate this conclusion, it is helpful to consider the Federal Circuit’s reasoning in a case involving telephone numbers as marks. In 2001, before the Federal Circuit first confronted the issue of TLDs, it held that the mark 1-888-M-A-T-R-E-S-S was protectable as a descriptive mark. In that case, the applicant applied to register 1-888-M-A-T-R-E-S-S as a service mark for “telephone shop-at-home retail services in the field of mattresses.” The examining attorney rejected the mark as generic for the relevant services or, in the alternative, as a descriptive mark with insufficient evidence of acquired distinctiveness. The TTAB affirmed both rationales. On appeal to the Federal Circuit, Dial-A-Mattress conceded that the area code in the mark was devoid of source identifying significance by itself and that the word “mattress,” no matter how creatively spelled, was generic for retail services in the field of mattresses; however, it argued that, considered in its entirety, the mark was not generic. The Federal Circuit agreed, holding that although area codes have no source identifying significance by themselves and the term “mattress” was generic, the combination of an area code and a generic term (1-888-MATRESS) was source identifying. Specifically, it was descriptive, as it indicated that “a service relating to mattresses [was] available by calling the telephone number.” Yet, even though the telephone mnemonic was source identifying, the Federal Circuit explained that the applicant still needed to establish “acquired secondary meaning” (also termed “acquired distinctiveness”) in order to register the descriptive mark.
The reasoning in Dial-a-Mattress maps seamlessly onto TLDs. Although a TLD, like an area code, has no source identifying significance by itself, in combination with a SLD, it indicates a domain name, which, like a telephone number, is unique. Moreover, like the mnemonic phone number 1-888-M-A-T-R-E-S-S, the combination of a TLD and a generic SLD creates a descriptive mark by indicating that services relating to the generic SLD are available by accessing the domain name. Finally, whether such a mark is entitled to trademark protection depends on whether the applicant can demonstrate that it has acquired distinctiveness. In short, TLDs generally do have source identifying value when used in conjunction with an SLD and a
mark comprised of a generic SLD and a TLD is generally a descriptive mark entitled to trademark protection if the mark holder can establish acquired distinctiveness.
Good move, Booking.com! Get this, too:
[A]dding 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. In this respect, unlike a corporate designation, a TLD that functions as part of a domain name does have source identifying significance. . . .
In addition, the descriptive nature of domain name marks with a generic SLD will
significantly limit the protection they receive, thereby safeguarding competition and public use. It is axiomatic that “descriptive terms qualify for registration as trademarks only after taking on secondary meaning . . . with the registrant getting an exclusive right not in the original, descriptive sense, but only in the secondary one associated with the markholder’s goods.” Beyond the circumscribed protection afforded to descriptive marks, competitors are also protected by the likelihood of confusion standard. As the Supreme Court emphasized in KP Permanent Make-Up, the party charging infringement bears the burden of proving that a competitor’s use of a mark is likely to confuse consumers. This is a heavy burden for a plaintiff because likelihood of confusion rests on nine factors, which include the source identifying strength of the plaintiff’s mark, the degree of similarity between the marks, and the defendant’s intent.
[T]he monopoly argument [raised by defendants] appears to assume that certain terms must be left in the public commons because they have descriptive value and are needed by consumers and competitors alike; however, no evidence in this record supports the view that domain names are used as descriptive terms for classes of services. To the contrary, the record is replete with evidence that consumers are predisposed to think that a domain name refers to a particular entity. . . .
[T]he evidence in this record shows that consumers are primed to perceive a domain name as a brand which militates for, not against, trademark protection for domain names.
Of course. But before you get too excited, keep this in mind:
Acknowledging that combining a TLD with a generic SLD can produce a source identifying domain name is not tantamount to finding that all domain name marks are protectable. Rather, a generic SLD combined with a TLD creates a descriptive mark that is eligible for protection only upon a showing of acquired distinctiveness. Importantly, acquired distinctiveness is a much higher bar than uniqueness and requires an evidentiary showing that “in the minds of the public, the primary significance of a . . . term is to identify the source of the product rather than the product itself.”
Hey, we learn, we grow. Very good stuff — well reasoned, meaning I think it’s right. A decision such as this one (Judge Leonie Brinkema wrote it) bears the stamp of excellent lawyering on at least one side. And as John Welch notes, that was the work of a team led by Jonathan Moskin of Foley & Lardner.