The Supreme Court of the United States issued its decision today in the United States Patent and Trademark Office, et al., v. Booking.com B.V. case. By an 8-1 margin, the court ruled that Booking.com could register a federal trademark for the mark “booking.com” despite the term “booking” (without the dot-com) being generic for the same goods and/or services. I expected this result (although not by an 8-1 margin; I thought it would be 6-3), so it was a positive outcome, in my opinion.
While legal scholars will be sure to debate the impact of the ruling for many years to come (Harvard Law School Professor Rebecca Tushnet has already posted her initial analysis of the ruling on her blog), from a business point of view it was a big win for owners of category defining domain names.
Furthermore, the judges repeatedly discussed the advantages of those domain names. I expect to see their words quoted in future domain name advertising! Here are two quotes:
The PTO also doubts that owners of “generic.com” brands need trademark protection in addition to existing competitive advantages. Booking.com, the PTO argues, has already seized a domain name that no other website can use and is easy for consumers to find. Consumers might enter “the word ‘booking’ in a search engine,” the PTO observes, or “proceed directly to ‘booking.com’ in the expectation that [online hotel-booking] services will be offered at that address.” Brief for Petitioners 32. Those competitive advantages, however, do not inevitably disqualify a mark from federal registration. All descriptive marks are intuitively linked to the product or service and thus might be easy for consumers to find using a search engine or telephone directory.
The owners of short, generic domain names enjoy all the advantages of doing business under a generic name. These advantages exist irrespective of the trademark laws. Generic names are easy to remember. Because they immediately convey the nature of the business, the owner needs to expend less effort and expense educating consumers. See Meystedt, What Is My URL Worth? Placing a Value on Premium Domain Names, 19 Valuation Strategies 10, 12 (2015) (Meystedt) (noting “ability to advertise a single URL and convey exactly what business a company operates”); cf. Folsom & Teply, Trademarked Generic Words, 89 Yale L. J. 1323, 1337–1338 (1980) (Folsom & Teply) (noting “‘free advertising’ effect”). And a generic business name may create the impression that it is the most authoritative and trustworthy source of the particular good or service. See Meystedt 12 (noting that generic domain names inspire “[i]nstant trust and credibility” and “[a]uthority status in an industry”); cf. Folsom & Teply 1337, n. 79 (noting that consumers may believe that “no other product is the ‘real thing’”). These advantages make it harder for distinctively named businesses to compete.
Owners of generic domain names enjoy additional competitive advantages unique to the internet—again, regardless of trademark protection. Most importantly, domain name ownership confers automatic exclusivity. Multiple brick-and-mortar companies could style themselves “The Wine Company,” but there can be only one “wine.com.” And unlike the trademark system, that exclusivity is worldwide.
Generic domains are also easier for consumers to find. A consumer who wants to buy wine online may perform a keyword search and be directed to “wine.com.” Or he may simply type “wine.com” into his browser’s address bar, expecting to find a website selling wine. See Meystedt 12 (noting “ability to rank higher on search engines” and “ability to use existing type-in traffic to generate additional sales”); see also 915 F. 3d, at 189 (Wynn, J., concurring in part and dissenting in part). The owner of a generic domain name enjoys these benefits not because of the quality of her products or the goodwill of her business, but because she was fortunate (or savvy) enough to be the first to appropriate a particularly valuable piece of online real estate.
Granting trademark protection to “generic.com” marks confers additional competitive benefits on their owners by allowing them to exclude others from using similar domain names.