Source: https://lrus.wolterskluwer.com/news/ip-law-daily/booking-com-mark-is-registrable-for-hotel-reservation-services/72472/
Timestamp: 2019-04-25 15:08:12+00:00

Document:
The USPTO failed to establish that Booking.com was a generic term for hotel reservation services, rather than a descriptive term that has acquired secondary meaning in the minds of consumers.
The federal district court in Alexandria, Virginia, did not err in concluding that the trademark BOOKING.COM is registrable in connection with hotel reservation services because the term has acquired distinctiveness as a source of such services provided by Netherlands-based Booking.com B.V., the U.S. Court of Appeals in Richmond, Virginia, has ruled. The district court’s award of attorney fees to the USPTO under 15 U.S.C. § 1071(b)(3) also was affirmed under Fourth Circuit precedent holding that the USPTO may recover its expenses in connection with appeals of Trademark Trial and Appeal Board decisions in ex parte proceedings. Circuit Judge James Wynn dissented from the majority’s conclusion that BOOKING.COM is protectable. According to Judge Wynn, under established trademark principles, the combination of a generic term with a generic top level domain designator does not make the combined mark less generic (Booking.com B.V. v. USPTO, February 4, 2019, Duncan, A.).
Netherlands-based Booking.com filed four applications under Section 66(a) of the Lanham Act for extension of protection in the United States of its mark BOOKING.COM for travel and tourist agency services in International Class 39 and hotel and resort reservations services in Class 45. The trademark examining attorney refused registration on the ground that the mark was generic for the applicant’s services, and alternatively, that the mark was merely descriptive and without acquired descriptiveness. The Trademark Trial and Appeal Board affirmed the refusals.
Booking.com appealed to the federal district court in Alexandria. The district court reversed the genericness finding, concluding that the term BOOKING.COM was descriptive. The district court then determined that BOOKING.COM was registrable as a matter of law, but only for hotel reservation services, because Booking.com produced sufficient evidence of acquired distinctiveness in relation to those service. The court subsequently awarded the USPTO its "expenses" incurred in the proceeding under Section 21(b)(3) of the Lanham Act, 15 U.S.C. §107l(b)(3), including $51,473 in employee fees and $21,750 in expert fees. Both parties appealed to the Fourth Circuit.
Genericness. On appeal, as before the district court, the USPTO argued that the term BOOKING.COM COM is a generic, not a descriptive, term that can never be protected. The appeals court noted that the USPTO conceded that if BOOKING.COM may properly be deemed descriptive, the district court’s finding that it has acquired secondary meaning was warranted. Thus, the only question on appeal was whether the district court erred in finding that BOOKING.COM is not generic. The Fourth Circuit found no such error.
Before reaching the substantive issue, the Fourth Circuit addressed the issue of which party bears the burden of proving genericness on appeal when registration of a mark is denied. The Fourth Circuit adopted the Federal Circuit’s long-held view that the USPTO "always bears the burden" of establishing that a proposed mark is generic.
The court then recited the three-step test it uses to determine genericness: (1) identify the class of product or service to which use of the mark is relevant; (2) identify the relevant consuming public; and (3) determine whether the primary significance of the mark to the relevant public is as an indication of the nature of the class of the product or services to which the mark relates, which suggests that it is generic, or an indication of the source or brand, which suggests that it is not generic. The parties only disputed step three: the public’s understanding of what the term BOOKING.COM primarily refers to.
Meaning of BOOKING.COM. The court concluded that the district court, as the trier of fact, did not err in finding that the USPTO failed to satisfy its burden of proving that the relevant public understood BOOKING.COM, taken as a whole, to refer to general online hotel reservation services rather than Booking.com the company.
Substantial evidence supported the district court’s finding. In particular, the USPTO failed to produce evidence demonstrating that the public uses "booking.com" generically to refer to booking websites or booking sites. In addition, Booking.com’s Teflon survey demonstrated that 74.8% of respondents identified BOOKING.COM as a brand name, rather than as a general reference to hotel reservation websites. The survey was strong evidence of the relevant public’s understanding. "Weighing the evidence before it, the district court did not err in finding that the USPTO did not satisfy its burden of showing that BOOKING.COM is generic," the court said.
SLD/TLD combination marks. The Fourth Circuit also expressly rejected the USPTO’s contention that adding the top-level domain (TLD) ".com" to a generic second-level domain (SLD) like "booking" can never yield a non-generic mark.
More than a hundred years ago, the Supreme Court held that the addition of commercial designations like "company" or "corporation" does not transform otherwise generic terms into protectable marks. Goodyear’s India Rubber Glove Mfg. Co. v. Goodyear Rubber Co., 128 U.S. 598, 602–03 (1888). The USPTO argued that the TLD ".com" is analytically indistinct from "company," as it is a generic identifier for an entity operating a commercial website, and therefore its addition to a generic term can never be protected. The USPTO further contended that the proposed mark was per se generic because it was nothing more than the sum of its component parts—"booking," a generic term for hotel reservation services, and ".com," a generic designator for an online company.
The Fourth Circuit rejected these arguments. "Merely appending .com to an SLD does not render the resulting domain name non-generic because the inquiry is whether the public primarily understands the term as a whole to refer to the source or the proffered service," the court explained. Moreover, where the combined mark involves a domain name—unlike general terms such as "crab house"— the relevant public may recognize domain names to indicate specific locations (or source of goods or services) on the internet. The court acknowledged that some courts have found the resulting composite of adding ".com" to certain SLDs to be generic (such as "advertising.com"), but this was a rare case "where the record evidence supported a finding that the USPTO failed to meet its burden of proving that the public primarily understood BOOKING.COM to refer to the genus of online hotel reservation services, rather than the company or brand itself." The court affirmed the district court’s finding that BOOKING.COM was descriptive. The USPTO did not challenge the finding that BOOKING.COM has acquired secondary meaning.
Attorney fee award. Section 21(b)(3) of the Lanham Act allows a trademark applicant to seek de novo district court review of an unfavorable Trademark Trial and Appeal Board decision in an ex parte case. Section 21(b)(3) provides: "In any case where there is no adverse party … unless the court finds the expenses to be unreasonable, all the expenses of the proceeding shall be paid by the party bringing the case, whether the final decision is in favor of such party or not.…" 15 U.S.C. § 1071(b)(3). In keeping with Fourth Circuit precedent, the district court found that the plain meaning of the phrase "all expenses of the proceeding" included reasonable attorney fees.
In Shammas v. Focarino, 784 F.3d 219 (4th Cir. 2015), the Fourth Circuit held that the "American Rule"—the principle that each litigant pays his own attorney fees unless Congress has specifically and explicitly provided otherwise—was inapplicable to Section 21(b)(3). While acknowledging that this ruling has been called into question by the Federal Circuit’s conflicting interpretation of an identical provision in the Patent Act in NantKwest, Inc. v. Matal, 860 F.3d 1352, 1355 (Fed. Cir. 2017) (en banc), the Fourth Circuit declined to revisit its holding in Shammas.
Concurring/dissenting opinion. Circuit Judge James A. Wynn, Jr., filed an opinion concurring-in-part and dissenting-in-part. Judge Wynn dissented from the majority’s holding that BOOKING.COM is a protectable trademark.
According to Judge Wynn, the district court applied an incorrect legal test. "Because the district court erroneously believed that marks combining a generic Secondary Level Domain and Top Level Domain are presumptively protectable, the court never examined—as it should have—whether BOOKING.COM amounted to one of the ‘rare circumstances’ when such marks are protectable." Judge Wynn said. This erroneous presumption conflicted with the law’s longstanding refusal to permit registration of generic terms as trademarks. "The law forbids trademarking generic terms, even when a putative mark holder engages in successful efforts to establish consumer recognition of an otherwise generic term," Judge Wynn said. Judge Wynn further pointed out that use of the TLD designator ".com" serves the functional purpose of an internet address locator and functional features cannot serve as trademarks.
The case is No. 17-2458.

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