31 Trademark Law's Monopoly Problem: The Supreme Court on Generic Terms as Trademarks
| Author | Christine Haight Farley |
| Pages | 31-63 |
Published in Landslide® magazine, Volume 13, Number 3, a publication of the ABA Section of Intellectual Property Law (ABA-IPL), ©2020 by the American Bar Association. Reproduced with permission. All rights reserved.
This information or any portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database or retrieval system without the express written consent of the American Bar Association.
January/February 2021 n LANDSLIDE 31
Trademark Law’s
Monopoly Problem
By Christine Haight Farley
Image: GettyImages
The Supreme
Court on
Generic Terms
as Trademarks
Published in Landslide® magazine, Volume 13, Number 3, a publication of the ABA Section of Intellectual Property Law (ABA-IPL), ©2020 by the American Bar Association. Reproduced with permission. All rights reserved.
This information or any portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database or retrieval system without the express written consent of the American Bar Association.
T
he U.S. Supreme Court handed down its ruling in
the nal trademark case of the 2019–20 term in U.S.
Patent & Trademark Ofce v. Booking.com B.V.1 on
June 30, 2020. In an 8–1 decision authored by Justice
Ginsburg, the majority held that consumer perception
alone should determine whether terms are registrable
as trademarks or generic and free for all to use.
The issue was whether a term that is generic for the class of
goods or services can be protected as a trademark when followed
by “.com.” The U.S. Patent and Trademark Ofce (USPTO)
refused to register BOOKING.COM in four related applica-
tions for travel reservation services, nding that “booking” was
generic for these services and that the addition of the generic
top-level domain (gTLD) “.com” failed to cure the problem as
a matter of law. After unsuccessfully appealing the trademark
examining attorney’s refusal in the Trademark Trial and Appeal
Board, the applicant sued the Director of the USPTO in district
court, likely as a means to escape unfavorable Federal Circuit
precedent, where an appeal could have been made. The district
court, hearing the case de novo and declaring it a case of rst
impression in the Fourth Circuit, ruled that a generic term plus a
gTLD creates a merely descriptive mark and that Booking.com
had acquired secondary meaning. The nding that the mark was
descriptive with acquired distinctiveness, but not the per se rule,
was afrmed by the Fourth Circuit.2
At the Supreme Court, Booking.com did not contest that
“booking” is generic for the services it offers, and the USPTO
did not contest the secondary meaning evidence proffered by
Booking.com showing that consumers do not perceive “book-
ing.com” to be generic. The case then was simply about the
proper test for genericity in “generic.com” cases. The USPTO
argued the rule in generic.com cases should follow the rule that
the addition of “Inc.” or “Co.” to generic terms does not cre-
ate a composite that is not generic. This rule was established in
an 1888 Supreme Court precedent—Goodyear’s India Rubber
Glove Manufacturing Co. v. Goodyear Rubber Co.3—that held
that a generic term embellished only by the generic designation
of a business entity necessarily produces a generic composite.
In its rst domain name case, which was also the rst case
in which the Court had ever permitted a live audio recording
of oral argument, the Court disagreed. Holding that “[a] term
styled ‘generic.com’ is a generic name for a class of goods
or services only if the term has that meaning to consumers,”
the Court ruled that the USPTO must base its decision on evi-
dence of consumer perception and not on any other rule.4 The
USPTO had argued that the consumer perception inquiry was
unnecessary in this case just as it had been in Goodyear.
Goodbye Goodyear
The Court did not explicitly overrule Goodyear but chose
not to apply it. This case was distinguishable, it reasoned,
because only one entity can occupy a particular domain
name. Thus, while there could be several entities calling
themselves “Wine Co.,” there can be only one wine.com. This
distinction is not a logical distinction, but a factual distinc-
tion. It presumes that consumers know that under our federal
system, corporate law is governed by state law so that dif-
ferent companies can register the same corporate name in
different states, but under the technical rules of the domain
name system, only one entity may register that name in .com.
This factual distinction is then the basis for an argument that
consumers would perceive a “generic.com” differently than
they would perceive a “Generic Corp.,” but it is not a pol-
icy rationale for evading the Court’s previous decision. The
majority, however, resisted the implications of this factual
distinction. If it is signicant that there can be only one wine.
com, presumably that is because consumers will understand
the exclusivity conveyed by such a designation. It is curious
then that the Court stated that it did “not embrace a rule auto-
matically classifying such terms as nongeneric.”5
The Court supplemented this distinction with an interpreta-
tion of Goodyear that clashed with the USPTO’s. The USPTO
understood Goodyear to pronounce a rule that a generic term
supplemented only by a generic corporate designation could
not produce a protectable mark as a matter of law. Characteriz-
ing such a rule as “unyielding,” the Court noted that it “entirely
disregards consumer perception,” which the Court stated is a
“bedrock principle of the Lanham Act.”6 Instead, the Court saw
the Goodyear rule as “a more modest principle harmonious
with Congress’ subsequent enactment” of the Lanham Act.7
The Court suggested that a rule “incompatible” with consumer
confusion is therefore incompatible with the Lanham Act.
Booking.com had argued that Goodyear was “repudiated” by
the Lanham Act.8 The Court declined such a pronouncement,
but suggested that any rule that doesn’t yield to consumer per-
ception has been repudiated.
The rule Goodyear announced does not yield to consumer
confusion. Goodyear declared:
[P]arties united to produce or sell wine, or to raise cotton or
grain, might style themselves Wine Company, Cotton Com-
pany, or Grain Company; but by such description they would
in no respect impair the equal right of others engaged in simi-
lar business to use similar designations . . . . Names of such
articles cannot be adopted as trade-marks . . . ; nor will the
incorporation of a company in the name of an article of com-
merce, without other specication, create any exclusive right
to the use of the name.9
The Court thus stated that the adoption of a “Generic Corp.” can-
not be an adopted trademark as a matter of law. Had there been
evidence indicating that “Goodyear Rubber Company” was not
understood by consumers as generic, the result would have been
the same. The Court stated that “[t]he designation Goodyear
Rubber Company not being subject to exclusive appropriation”
could be freely employed by others.10 It was a formulation that
was not subject to appropriation regardless of the facts.
The Goodyear Court’s rule is thus incompatible with the
Booking.com rule: “Whether any given ‘generic.com’ term
is generic, we hold, depends on whether consumers in fact
Christine Haight Farley is a professor of law at American
University Washington College of Law where she teaches courses
on intellectual property, advertising law, and art law. She can be
reached at cfarley@wcl.american.edu. The author is grateful for the
excellent research assistance provided by Allison Clark.
Published in Landslide® magazine, Volume 13, Number 3, a publication of the ABA Section of Intellectual Property Law (ABA-IPL), ©2020 by the American Bar Association. Reproduced with permission. All rights reserved.
This information or any portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database or retrieval system without the express written consent of the American Bar Association.
January/February 2021 n LANDSLIDE 33
perceive that term as the name of a class or, instead, as a term
capable of distinguishing among members of the class.”11 The
Court thus silently overruled Goodyear.
The Customer Is Always Right
Signicantly, the Court’s broad statement that following
Congress’s enactment of the Lanham Act all rules must be
compatible with consumer perception cites no authority
within Congress’s enactment for such a changed standard.
Indeed, the Lanham Act offers no citable language for this
proposition. In fact, the Lanham Act makes consumer per-
ception subservient to other doctrines, such as the absolute
registration bars (deceptive marks, ags, etc.), and certain
defenses, such as fair use and laches.
Booking.com convinced the Court that the Goodyear rule
was odious. In its briefs and oral argument, the rule was disap-
provingly characterized as a “per se” rule, a classication taken
up by the majority. Booking.com also effectively denigrated
the precedent as being too old. In the oral argument, Chief Jus-
tice Roberts twice noted that the Goodyear case was 130 years
old and pointedly asked why we would now focus on it.12 Like-
wise, Justice Alito, noting that Goodyear was “from a different
era,” asked for a rule “that makes sense in the Internet age.”13
Also echoing Booking.com’s argument, the Court noted its
inconsistent application by the USPTO and stated that its adop-
tion could therefore put issued registrations in peril.
None of this, however, gives the Court license to ignore its
own precedent. Goodyear is far from out of date; it perfectly
captures the issue of claiming trademark rights in domain
names. The rule advanced by the USPTO is an extension of
Goodyear for the internet age. The Court, however, gave itself
license to ignore Goodyear with this statement: “we discern
no support for the [Goodyear rule] in trademark law or pol-
icy .”14 Therein lies the importance of this case going forward.
Goodyear is a part of current trademark law, and its rule rests
entirely on trademark policy. The policy it espouses is trade-
mark law’s protection of competition. For the majority, that
policy had no purchase in this case. Harm to competition just
wasn’t tangible. In the void, the Court latched on to consumer
perception as the driver of trademark policy.
Goodyear was concerned with the monopolization of a
generic term by a Generic Co. Meanwhile, the majority in
Booking.com was convinced by Booking.com that attempts
to assert exclusive rights in generic.coms were “losers.”15
Booking.com also promised that if it received a registra-
tion, it would not enforce it against similar domains. Both the
majority and dissent referred to this promise and cited it in
the oral argument transcript, presumably to make it binding?
That plus $5 will get a competitor a cup of coffee while it
reads the cease and desist letter it will receive from Booking.
com for using a similar domain. Booking.com also convinced
the majority not only that highly descriptive terms result in
thin trademarks, but also that the doctrine of descriptive fair
use adequately protects competition. If in fact the trademark
offers Booking.com such weak rights, one wonders why it
chose to pay to litigate a registration refusal all the way to the
Supreme Court when it already claims common-law rights in
the designation, holds related registrations in design marks,
holds 85 registrations for Booking.com worldwide (each of
which can be relied on in a domain name dispute), and has
secured the domain name. If all it really wanted was a thin
trademark, it could have more easily achieved that by simply
disclaiming the generic term in a stylized mark.
Justice Breyer, the sole dissenter, was also the sole link to
all of the Court’s precedent protecting competition. Interest-
ingly, Justices Ginsberg and Breyer often found themselves
on opposite sides in intellectual property cases. Breyer saw
the monopoly danger and issued one of his most tight and
convincing opinions.
Goodyear, the USPTO, and Justice Breyer all saw a dan-
ger that the majority did not. Just as a company selling wine
should not be able to own a trademark in “wine,” neither
should it be able to do an end run around that prohibition by
adopting the moniker “Wine Co.” To allow a trademark in
such cases, according to Goodyear, would “impair the equal
right of others engaged in similar business to use similar des-
ignations, for the obvious reason that all persons have a right
to deal in such articles, and to publish the fact to the world.”16
In sharp contrast, the Booking.com majority concluded that
the USPTO’s concern about granting “undue control over
similar language, i.e., ‘booking,’ that others should remain
free to use . . . attends any descriptive mark,” and “[r]espon-
sive to it, trademark law hems in the scope of such marks
short of denying trademark protection altogether.”17 The
majority seems not even to nd a policy justication for the
law’s distinction between generic and descriptive terms. The
equivalent in patent law would be giving up § 101 of the
Patent Act on the assurance that § 102 and § 103 would pro-
tect the public domain. Or perhaps Booking.com goes even
further, suggesting that subject matter constraints are unnec-
essary when effective constraints exist on the scope of rights.
Having Its Cake and Eating the Competition Too
Although the decision was not surprising, it was nonethe-
less disappointing. In elevating the public policy work that
consumer perception does in trademark law, the Court has
opened the door to monopolizing generic terms, especially
to large companies. Justice Breyer’s dissent was spot on.
In deciding that a generic.com can be registered as a trade-
mark if it has a source-identifying meaning to consumers,
the Supreme Court allows Booking.com to have its cake and
eat it too. In registering www.booking.com, the online book-
ing company monopolized the generic word for its services
in .com, and in adopting the domain name as its business
name, it immediately conveyed to consumers the services
it provides. Other advantages follow, including a conspicu-
ous web presence and—as a result of recent domain name
system rules—the sole right to own the term as its own top-
level domain: .booking. The usual consequence of adopting
a business name that does no more than convey the services
provided is that the name can’t be registered as a trade-
mark; a trade-off many would accept. But the Supreme Court
removed that consequence and cleared the way for Booking.
com to also eat its cake.
Preserving competition is the basis of the trademark rule
against monopolizing generic terms. Booking.com is already one
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