U.S. Supreme Court Rules Public Perception Determines Trademark Eligibility – It May Affect How You Protect Your Brand Online

On June 30, 2020, the United States Supreme Court ruled in Patent and Trademark Office v. Booking.com B.V., that it is possible for a generic word combined with “.com” to receive a federally protectable trademark.

This landmark case strikes at the fundamental clash between two competing, yet central ideas in trademark law.

• First, there is the notion that to protect the public from confusion, a company can receive trademark protection for works or symbols that the public understands to designate the source of goods or services.
• Contrastingly, the second idea is that to protect unfair competition, a company cannot receive trademark protection for words or symbols that are “generic” names.

But what happens when a business has a generic name in which the public has come to associate that specific business with the specific goods or services it sells? The Supreme Court answered this very question, and found in an 8-1 decision that booking.com, owned by Booking Holdings Inc., is entitled to nationwide legal protection against competing trademarks.

Booking.com is a business that maintains a travel-registration website. The business sought federal registration of marks including the term “booking.com,” but the U.S. Patent and Trademark Office (PTO) denied the business’ trademark application. It is important to note that a trademark gives a business the ability to distinguish the goods or services it offers from another business. If a business’s application for a federal trademark is accepted, then that business has certain rights, including the right to protect its trademark against use by other businesses. This not only secures to the owner of the trademark the goodwill of her business, but it also protects consumers in that when they purchase a product bearing a particular trade-mark, they can be assured that they will get the product which it wants.

U.S. trademark law, however, does not confer trademark rights to companies that claim ownership of an entire category of goods, such as wine, or computers, or books. But what about the businesses that invested significant resources in building their brands, such as weather.com and hotels.com? When consumers think of weather.com, for example, most associate that domain name with a specific service.

Thus, the case turned on whether consumers perceived “Booking.com” to be generic. In its opinion, the Supreme Court hypothesized that if consumers thought “Booking.com” was generic, they might expect consumers to understand Travelocity — a similar service – to be a “Booking.com” or if a consumer was looking for a trusted online hotel-reservation service, they would ask a frequent traveler to name her favorite “Booking.com” provider.

The Supreme Court agreed with the lower court’s finding that consumers do not perceive “Booking.com” in this generic way. Moreover, the PTO did not dispute that determination. Instead, the PTO argued for a “per se” rule against trademark protection for any generic word followed by a “.com.”

 Yet, the Supreme Court pointed to past instances where the PTO did not follow this rule. For example, the PTO granted trademark registration in the past to “art.com” and “dating.com.” The Court underscored that because domain names are one of a kind, a significant portion of the public will always understand a generic “.com” term to refer to a specific business. Thus, the Court rejected the PTO’s position that “generic.com” terms are categorically incapable of identifying a source or particular business.

There is a limiting principle to take away from this ruling. The Supreme Court did not rule that having a “generic.com” name automatically classifies that term as non-generic. The significance rests with whether consumers perceive that term as capable of distinguishing among members of the class. Booking.com collected consumer surveys to show that 74% of consumers of travel services recognize booking.com as a trademark. Because the PTO offered no evidence to challenge that booking.com enjoys unparalleled consumer loyalty in the travel industry, there was no dispute with respect to whether consumers perceive booking.com to be a generic term.

For businesses, this case proves that if you harness time and effort in building your brand it can pay off. But it comes at a cost. A simple google search reveals that in 2018, booking.com spent $4 billion on marketing.  It is no surprise that booking.com spent a portion of those funds on buying Google Adwords to drive consumer traffic to their website. In the second quarter of 2019 alone, Booking Holdings, the parent company of Bookings.com spent $1.19 billion on performance marketing.

It is important to highlight the point that Justice Stephen Breyer made, as the sole dissenting opinion in this case. He cautioned that the majority’s decision will “lead to a proliferation of “generic.com” marks granting their owners a monopoly over a zone of useful, easy-to-remember domains.”

While consumer perception was central to this case, there is an additional cautionary tale with respect to how booking.com and other companies obtain that perception from consumers. Essentially, bookings.com bought the public perception that was central to winning this case through the billions it spent on advertising and marketing. Notably, this was not discussed in the Supreme Court’s opinion, but nonetheless is something business owners, as well as the public, should keep in mind.

Accordingly, businesses must consider the value of both their trademark and the internet domain associated therewith — and how to ensure they are legally protected.  Simply registering an internet domain does not provide trademark protection and owning a trademark does not automatically provide your business with the right to the “.com” domain extension thereof.

As you consider how to promote your business, Vandenack Weaver attorneys can assist you in determining how to best protect your brand in commerce, social media and online.  If you have questions, please call at 402-504-1300 or contact us via info@vwattys.com.

VW Contributor: Skylar Young
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The Green Jacket of the Masters Golf Tournament is Finally a Registered Trademark

The golf season is almost here for most individuals in the United States and, for golf enthusiasts, that means the Masters golf tournament. Last year, Tiger Woods won the iconic tournament in a dramatic return to the winners circle. However, while Tiger was putting on the green jacket as the winner of the Masters, a fight over that jacket was occurring with the United States Patent and Trademark Office (“USPTO”).

On February 21, 2019, Augusta National, Inc., applied to register the green jacket as a trademark. Initially, the USPTO denied registration of the green jacket with gold buttons because they deemed it a non-distinctive product design with functional elements, thus not eligible for registration. The USPTO subsequently denied registration because the jacket was deemed a decoration and ornamentation, not an inherently distinctive service mark, thus not eligible for registration. Regardless of the reasons, the green jacket that has been awarded to the winner of the Masters since 1949, when Sam Snead won the tournament, was initially deemed ineligible for trademark registration. Ultimately, the inherently distinctive green jacket prevailed in arguments with the USPTO and it received registration almost a year later.

For businesses, this illustrates a couple important points. First, that trademark law is used for trade dress, sounds, designs, and possible even smell, not just your standard logo or words. The second is that regardless of how distinctive and historical a trademark, the registration process requires expertise and knowledge of the overall prosecution process. Of course, the attorneys are Vandenack Weaver LLC are here to help with that prosecution, even if the trademark isn’t as famous as the green jacket. As for Tiger, we will have to wait and see if he can defend his title at the Masters.

 

VW Contributor: Alex Rainville
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New Rules at the Trademark Office

Effective February 15, 2020, the United States Patent and Trademark Office (“USPTO”) implemented several new rules for applicants and registrants. While these rule changes are not substantive in nature, the procedural and administrative updates are likely to cause substantive disruption for certain trademark owners and applicants. Although it is arguable what will have the largest impact, the update to the specimen requirements are likely to create new challenges.

The USPTO revised the items that are deemed an acceptable specimen. The change is designed to ensure that the specimen submitted clearly depicts the trademark in use with the specific good or service provided. By way of example, mock-ups, designs on their own, and labels without clear association with the good or service are no longer accepted. Another change includes the USPTO designating email as the only method for formal correspondence. This procedural change includes a new requirement that all registration applications must be submitted electronically, with limited exception. For attorney’s filing on behalf of a client, the attorney will also need to provide the email address for the client, as opposed to just the attorney. This requirement applies to proceedings in front of the trademark trial and appeal board as well as registration applications.

These procedural changes are the latest updates to take effect as the USPTO attempts to modernize and combat fraudulent registrations and applications. For those with a registered trademark, these changes will apply to the next required filing or, if the USPTO so elects, to an audit of the registered mark. This means that trademark owners should ensure that they continuously use their trademarks in commerce in the manner described in the trademark registration.

VW Contributor: Alex Rainville
© 2020 Vandenack Weaver LLC
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Supreme Court to Determine Whether Fossil Must Turn Over Profits for Trademark Infringement

Fossil, Inc., the luxury goods retailer, could owe a manufacturer, Romag Fasteners, Inc., its profits for infringing on Romag’s trademark. The issue of whether Fossil owes Romag approximately $6.7 million dollars in profits gained by using the infringing trademark depends on whether the remedy of disgorgement of profits by a party infringing on a trademark requires willfulness by the infringing party.

The issue arises from Fossil using a magnetic snap fastener on some of its bags, purchasing some of the fasteners directly from Romag. However, Fossil also purchased some fasteners that looked nearly identical to those of Romag from another source, likely knowing that the fasteners were counterfeit and infringed on the trademark of Romag. Despite this knowledge, Fossil proceeded to use them anyways in “callous disregard” to the rights of Romag. In a moment of luck for Romag, an employee discovered the counterfeit products when visiting a Macy’s, finding the Fossil bags with the counterfeit fastener. Romag successfully argued that Fossil infringed on their trademark rights, but an open question regarding the remedy remains. The United States Supreme Court will determine whether the remedy includes the profits of Fossil, and such decision will be based on whether Fossil must willfully infringe on Romag’s trademark rights or if “callous disregard” is sufficient to entitle Romag to the profits of Fossil.

This case highlights the broader importance of protecting the brand and intellectual property of a company. Traditionally, this means taking active steps to ensure that the trademarks, copyrights, trade secrets, and patents are protected under applicable law, but it should also mean proactively verifying that the initiatives of the company don’t infringe on the rights of another. Failure to take consider trademark rights, as Fossil is learning the hard way, could result in disgorgement of profits.

VW Contributor: Alex Rainville
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Intellectual Property: A Peloton Story

Most people know Peloton because of their flashy and controversial ads, as well as for revolutionizing the indoor cycling industry. However, as Peloton forges forward in the competitive fitness equipment industry and fights to keep its stock price above its IPO level, they have also been litigating trademark and copyright claims. Recently, a Federal District Court ruled in favor of Peloton in the trademark matter, which means, for now, Peloton will be able to retain its name.

In the case, Move Press, LLC v. Peloton Interactive, Inc., Move Press claimed that Peloton was infringing on their trademark rights because Move Press has a cycling publication named Peloton Magazine. Move Press had registered this trademark with the United States Patent and Trademark Office, and its use of the mark clearly preceded the use by Peloton. However, Move Press did not file the claim against Peloton for well over four years. As a result, Peloton argued that this claim was barred under an equitable legal theory known as laches, which means that Move Press waited an unreasonable period of time to bring the claim. Peloton had to argue laches, as opposed to a statute of limitations, because the Lanham Act, which governs registered trademarks, does not have a statute of limitations. The Federal District Court, after undergoing a rigorous review of the elements in the laches defense, ruled in favor of Peloton.

Had Move Press timely made the claim against Peloton, the result would have likely been in favor of Move Press and the public would know Peloton as something different. For business owners, this raises two important points. The first is that every registered trademark owner has an obligation to police their marks and, should they find someone infringing on their mark, timely bring a claim. The second is that a business, when selecting its name, branding a new product, or re-branding, should review its rights in the marks prior to making a significant marketing investment.

VW Contributor: Alex Rainville
© 2019 Vandenack Weaver LLC
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Domain Names and Trademarks: Enforcing Trademark Rights Against Domain Name Owners.

In the era of modern commerce, the success of a business is often driven by technology and its web presence, and it has become easier than ever to purchase a domain name from an internet domain registrar, making ownership available to the masses. This has increased the number of disputes that arise between an owner of a registered trademark and an owner of a domain name. While many of these disputes are in good faith and resolved through a negotiated settlement, many are arising because individuals are intentionally trying to “ransom” these domain names to the highest bidder. In these situations, it is important to know your rights under the Anti-Cybersquatting Consumer Protection Act (“ACPA”) and the Uniform Domain Name Dispute Resolution Policy (“UDRP”).

The ACPA was enacted in 1999 and designed to protect trademark owners from domain name cybersquatters, but it requires the trademark to be distinctive and/or famous prior to the purchase of the domain name, and the purchase to be in bad faith. Although the distinctiveness and fame element is governed by traditional trademark rules, courts haven’t isolated exactly what constitutes bad faith in this context. By way of example, in ZP No. 314, LLC v. ILM Capital, LLC, No. 1:16-cv-00521-B (S.D. Ala. Sept. 30, 2019), the court decided that bad faith did not include “parking” on the domain name. In this case, the infringing business purchased the domain name with the sole intent of profiting from the other businesses distinctive mark. However, since the mark did not become “distinctive and famous” until after the infringing business stopped actively using the domain name, the court determined that this was not bad faith, despite being critical of its own opinion on the matter.

An alternative remedy for a trademark owner is to seek protection through the UDRP, which is run by the Internet Corporation for Assigned Names and Numbers (“ICANN”). Similar to the ACPA, to obtain relief, the trademark owner must follow a specific process and meet the required elements. The process and the elements are different than the ACPA, but have significant overlap. For a business seeking to enforce its trademark rights against the owner of a domain name, the path to obtaining relief requires careful analysis and planning, especially because the courts continue to adjust to modern commerce.

VW Contributor: Alex Rainville
© 2019 Vandenack Weaver LLC
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Foreign-Domiciled Applicants; Why the Change at the Trademark Office?

By Alex Rainville

In a long anticipated decision, starting on August 3, 2019, foreign domiciled trademark applicants, registrants, and parties must be represented by a US licensed attorney in front of the United States Patent and Trademark Office (“USPTO”). This means that any foreign-domiciled person or business wishing to seek trademark registration with the USPTO must appoint a US licensed attorney to file and prosecute the trademark registration application. This may appear like an unnecessary burden, but it is part of fixing overarching administrative problems.

The USPTO is actively trying to modernize and streamline the trademark registration application process, to ensure timely review of applications and increase efficiency to final outcomes. One of the challenges to this process has been a large number of foreign-domiciled applicants submitting inaccurate, and often times fraudulent, materials. By way of example, a common problem with these applications is the specimens are either failing to meet the required standards or are outright fraudulent. This increases the time required for the USPTO to examine and process applications, resulting in an inefficient registration process for all applicants. By using a US licensed attorney, the USPTO expects that the applications will be more accurate and eliminate much of fraud, ultimately increasing efficiency.

For businesses wishing to protect its intellectual property, even those based in the US, it is a good idea to hire a trademark attorney. For example, the attorney will be able to guide you on what can be protected under the Lanham Act and the common law, and the best avenue to obtain registration or, more generally, protection for your intellectual property. They will also ensure you and your business are not defrauded by the multitude of USPTO imposters, and will know how to file complaints regarding these imposters with the Federal Trade Commission, for the Department of Justice to prosecute. Although this change of policy at the USPTO may seem unfair to foreign-domiciled applicants, the change may ultimately benefit all the businesses relying on the USPTO to protect its brand and intellectual property.

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