Contributed by: Samvad Partners
The Supreme Court of the United States allowed registration of Booking.com’s trademark despite the fact that the United States Patent and Trademark Office (“USPTO”) had earlier found it too “generic” to merit protection. In a first of its kind hearing where oral arguments were conducted over the phone, the Supreme Court passed its opinion in the case of United States Patent and Trademark Office Et. Al. v. Booking.com B.V. on 30.06.2020. The ruling can be termed as a watershed in trademark laws. It can also result in increased litigation. The ruling can potentially open the flood-gates of applications before the USPTO for registration of marks that pair a non-distinctive term with a top-level domain name (“TLD”). However, is merely the inclusion of a “.com” sufficient to lift a mark out of its generic status? Would the ruling result in another “dot-com bubble” with entities trying to monopolize a zone of useful and easy to remember domain names by combining generic terms with an equally generic “.com”? This article attempts to answer such questions by discussing the ruling of the Supreme Court in the backdrop of the relevant provisions of The Federal Trademark Act, 1946 of the United States. The article also examines the law in India to understand how the issue has so far been dealt with by the courts here.
The U.S. Perspective
The Federal Trademark Act, 1946 popularly known as the 'Lanham Act' governs the trademark law in the United States. Section 2(e)(1) of the Lanham Act refuses registration of a mark which is merely descriptive of the goods of the applicant. However, Section 2(f) provides an exception to refusal of registration on the ground that the mark of the applicant has become distinctive of the applicant’s goods in commerce. In simpler terms, a generic/ descriptive term can acquire protection only if the term has acquired a secondary meaning – in the sense that the public associates the term with a particular product of a particular company.
Booking.com filed multiple applications to register trademarks in connection with its travel related services. All the applications contained the term “Booking.com”. “Booking.com” is also the domain name of its website. On examination, the USPTO concluded that because “booking” means making travel reservations, and “.com” merely signifies a commercial website, the term “Booking.com” is generic for the services at issue and hence unworthy of registration. In its appeal to the Supreme Court, the USPTO urged the Court to adopt the rule that when a generic term is combined with a TLD like “.com”, the resulting combination is generic. In support of its argument, the USPTO relied upon an earlier case – Goodyear’s India Rubber Glove Mfg. Co. v. Goodyear Rubber Co., in which the Supreme Court had held that adding a generic corporate designation – like the term “Company” or “Inc.” – to a generic term does not confer trademark eligibility.
After a series of appeals before the lower courts, the Supreme Court by an 8-1 majority, ruled in favor of Booking.com and held that “Booking.com” – unlike “booking” – is not generic. The Supreme Court refused to adopt the per se rule urged by the USPTO that when a generic term like “booking” is combined with a generic TLD like “.com”, the resulting combination is also generic. The Court distinguished the case of Goodyear’s India Rubber Glove Mfg. Co. by observing that unlike a generic corporate designation like “Company” or “Inc.”, a “generic.com” term might also convey to consumers a source-identifying characteristic as only one entity can occupy a particular internet domain name at a time. While adding a “Company” or “Inc.” merely indicates that certain parties have formed an association or partnership to deal in a particular type of goods or services, a “generic.com” can indicate to consumers a specific entity. The Court further reasoned that whether any such “generic.com” term is generic, would depend on whether consumers in fact perceive that term as the name of a class or, instead, as a term capable of distinguishing among members of the class. In the present case, as “Booking.com” is not perceived as generic by the consumers, it is not generic.
The sole dissent in the case was provided by Justice Breyer who opined that the term “Booking.com” merely informs the consumers of the basic nature of its business i.e. that it provides online booking services, and nothing more. Justice Breyer opined that a TLD such as “.com” has no capacity to identify and distinguish the source of goods or services. It is merely a necessary component of any web address. Thus, appending “.com” to a generic term like “Booking” ordinarily yields no meaning beyond that of its constituent parts and hence it is not eligible for trademark registration. Justice Beyer also opined that monopolization of linguistic commons can inhibit competition as the owner of a trademark in a generic term can potentially exclude its rival to describe their goods or services as they fundamentally are.
The Indian Perspective
Regarding registration of generic marks, the Indian trademark law is not very different from the United States’ law. Section 9 of the Trademark Act, 1999 states that a mark which is devoid of any distinctive character cannot be registered. It also bars registration of marks which have become customary in the current language or in the bona fide and established practices of trade. However, similar to the Lanham Act of the United States, the Trademark Act, 1999 also provides an exemption to these rules. Marks that have acquired a distinctive character or a secondary meaning as a result of their use can be permitted registration. The judicial outlook of Indian Courts is also in conformity with the Act.
The Supreme Court in Godfrey Philips India Ltd. v. Girnar Food & Beverages Pvt. Ltd. way back in 2004 had held that a descriptive trade mark may be entitled to protection if it has assumed a secondary meaning which identifies it with a particular product or as being from a particular source. The position was followed by the High Court of Delhi in Vijay Kumar Ahuja v. Lalita Ahuja, where it observed that common language words and names cannot be exclusively appropriated by any trader unless and until such trade names have acquired such a great reputation and goodwill in the market that the common language word has assumed a secondary significance. In Bata India Ltd. v. Chawla Boot House & Anr., the High Court of Delhi adopted the following illustration to explain how distinctiveness of marks is to be judged:
GENERIC – Least Distinctive
DESCRIPTIVE – Secondary Meaning Required
SUGGESTIVE – Inherently Distinctive
(No Secondary Meaning Required)
ARBITRARY/ INVENTED MARKS – Inherently Distinctive
(No Secondary Meaning Required)
Recognizing the importance of domain names in distinguishing the subject of trade or services made available to potential users of internet, the Supreme Court in Satyam Infoway Ltd. v. Siffynet Solutions (P) Ltd. held that a domain name may have all the characteristics of a trademark and an action for passing off can be found where domain names are involved. The Court observed that with an increase in online activity, domain name is chosen not only as an instrument of internet address, but also because it serves to identify and distinguish the business itself, or its goods or services. Likewise, the High Court of Delhi in the case of Tata Sons Limited v. Manu Kosuri & Ors., categorically held that domain names or internet sites are entitled to protection as a trade mark because they are more than a mere address. In Ishi Khosla v. Anil Aggarwal & Anr. the High Court of Delhi went a step ahead and held that in the modern world where information is available at the click of a mouse, it is not necessary that a product is in the market for number of years for its trademark to acquire secondary meaning/ distinctiveness. If a new idea is fascinating and appeals to the consumers, it can become a hit overnight.
Therefore, domain names can be registered and protected as trademarks provided that it satisfies all conditions required under the Trademarks Act, 1999.
Bursting the Bubble
The US Supreme Court judgment in Booking.com will definitely play a significant role in shaping the legal opinion of trademark law practitioners in India while advising clients on generic domain-related trademark registrations. The real challenge for practitioners would lie in proving the distinctiveness of a mark in the eyes of the consumers. It would be imperative to separate the grain from the chaff and demonstrate that the mark has acquired distinctiveness not merely because of passage of time, but because the sound or sight of the mark rings a bell in the minds of the consumers. This is no easy task as consumer perception is necessarily subjective. Even in the case of Booking.com, while 74.8% of participants thought that “Booking.com” is a brand name, the remaining 23.8% still believed it to be a generic name. Moreover, consumer surveys have limited probative value in such cases. The survey respondents may not be able to distinguish that the domain names are exclusive on the one hand, and whether a given “generic.com” term has achieved a secondary meaning or not on the other. Therefore, evaluating the domain name mark’s validity from the lens of consumer perception is a fact-heavy question requiring extensive supporting evidence.
For the courts, it would be beneficial if it recognizes and retains the well-reasoned dissent of Justice Beyer and stays watchful of illegal proliferation of “generic.com” marks, thereby granting their owners sweeping monopoly over a zone of easy-to-remember domains. This could very well inhibit free competition in online commerce, a situation which must be zealously guarded against.
Contributed by Samvad Partners
The above article has been authored by Ms. Poornima Hatti(Partner), and Mr. Sumit Srivastava(Senior Associate).