The Supreme Court Backs Booking.com

The United States Supreme Court delivered a victory for creators, specifically those whose businesses and ventures find their origins online, and security for current trademark holders with its decision in Patent and Trademark Office v. Booking.com B. V.  Justice Ginsburg, who wrote for the eight justice majority, held that the addition of “.com” to a generic name “is a generic name… only if the term has that meaning to consumers.”

As the Court described, a trademark “protect[s] the ability of consumers to distinguish among competing producers.” Thus, an argument that disregards the views of consumers would be unpersuasive as it would leave out a key aspect of the role of a trademark. The Patent and Trademark Office (PTO) argued that “BOOKING.COM is ineligible for trademark protection even if consumers understand that the term refers to respondent’s business.”

Imagine if 99 percent of consumers viewed something like Doors.com and knew it was a specific business. It would be inconceivable to say that because “Doors” is something generic, that the entire brand is also generic even if consumers do not view it as such. This kind of faulty logic is exactly what the Court resoundingly rejected.

With this decision, the Court provided a boost for brands and creators. Indeed, the decision will allow many brands and creators who may have been denied trademarks for similar “.com” compositions under the PTO’s argument, to point to consumer data that suggests consumers view the mark as distinctive. I believe this is the true victory for brands and creators; not necessarily the Court’s ruling on “.com” compositions, but the general notion that the views of consumers pertaining to the generality of a proposed mark matter a great deal and can be a factor in determining whether a mark is generic or not. Additionally, the opinion does not suggest that such reasoning is only applicable to the specific type of mark in the case. Therefore, many brands and creators can use such data to aid in their ability to achieve trademark registration.

The Court’s decision further benefits creators and consumers alike by promoting “orderly competition.” Indeed, by providing an avenue through which creators can register marks that may be generic at first glance, trademarks may be rightfully granted, and consumers may be able to better distinguish between brands. Had this not been the case, consumers may have chosen different companies which had arisen precisely because another company had no trademark protection. For example, I could realize the potential to poach customers from Booking.com  because of their lack of a mark by exploiting the possible marketplace confusion. Thus, there could be confusion and the consumer may choose the companies they did not intend to because the ‘.com’ mark is what distinguishes the company from any other generic company. Without the ‘.com’ mark, consumers who intended to take their business to Booking.com may have inadvertently chosen a different company because they could not distinguish between two booking services. This would hurt both the consumer, who has to both incur higher costs to seek out the correct company but also the company, who potentially loses business.

This is not to say the Court’s decision is perfect. It is better described as the most logical and respectful of the commercial marketplace, but potentially dangerous. Justice Breyer’s dissent lays out many concerns. Some include the potential for faulty surveys to lead the PTO or the courts to incorrect decisions and the possibly limiting of free competition as the granting of too many marks that have this “generic name.com” form could keep out competitors.

Of these, I believe the most pressing concern is the use of surveys. Surveys can be extremely error-prone. Everybody knows how incorrect political polling was for the 2016 election. One issue was nonresponse bias, where, in the case of 2016, those with lower levels of education were likely to turn out for Donald Trump but also some of the least likely to respond to surveys. It is not crazy to believe such problems could plague consumer surveys as well. Consumer surveys only see about a 15 to 20 percent response rate. This raises questions about who is unlikely to respond and who is responding. Is there a reason that determines responsiveness that can cast doubt about the legitimacy of the results? Indeed, the Supreme Court of Canada has spoken on this very issue in Masterpiece, holding that some surveys in trademark cases where a mark user “has not established a sufficient presence in the marketplace” “are highly unlikely” to be reliable.

If such faulty surveys are presented to the PTO or the courts, erroneous decisions may follow. Trademarks may be granted when they should not be, which may limit competition. Trademarks may also not be granted when they should be, which would hurt both consumers and creators. In short, this danger noted by Justice Breyer is real.

However, I believe the Court’s decision is correct nonetheless. To side with Justice Breyer’s reasoning would be more problematic than the plausible problems that his dissent points out. To side with the dissent would be mean opening the floodgates to retroactive trademark cancellation of marks that fit the same “.com” form. A search of the PTO database finds 14769 such marks. Now of course not all of these marks are of the same form. However, there a marks for ‘Desktop.com’ and ‘RV.com.’ Cancellation of any number of these would cause instability in the marketplace as consumers become increasingly confused and possibly end up opting for different companies when they would have chosen another company had a mark been granted.. These commercial considerations, namely market stability and an understanding of business interests, strongly outweigh Justice Breyer’s concerns.

The Court’s decision will likely be hailed as victory for companies and creators who seek trademark registration. Moreover, the decision provided security to those who already had trademarks registered of the same “.com” form. While it is true that problems may arise, the Court, in my opinion, made the right decision, and at the same time, provided benefits that far outweighed the potential costs.

Nicholas Heinrich is a fourth-year undergraduate student at the University of Toronto studying Political Science and Economics.

Leave a reply

Your email address will not be published. Required fields are marked *

13 − 1 =