The Supreme Court’s Holding that Generic Terms Can Be Trademarks Is Not Fair to Struggling Startups

At a time when small businesses are reeling, the Supreme Court decided to make life even more challenging for startups and mom and pop shops. The Court recently decided that a generic term combined with “.com” or “.net” could be registered as a federal trademark. If that sounds like no big deal to you, you have not thought it through. Based on the Court’s decision in United States Patent and Trademark Office et al. v. Booking.com, someone could register a trademark for autorepair.com. That would mean that Joe of Joe’s Auto Repair would have to get permission, and likely pay a licensing fee, to use the name Joe’s Auto Repair on his website and marketing materials. Multiply that by thousands of other generic business categories and the reality becomes clear.

The Court’s decision finding “Booking.com” to be a registrable service mark for online travel booking services introduces minefields of uncertainty into the trademark and branding efforts of mom and pop shops and start-ups. These companies will inevitably face increased fees and costs figuring out what can be used or registered as a trademark.

Generic terms are informational. They simply identify or name the class or type of products or services being offered: auto or computer repair service, booking (travel) services, soft drinks, or shoes, for example. Traditionally, a business using FranksComputerRepair.com would not have exclusive right to “ComputerRepair.com;” the Court’s decision turns over a carefully stocked apple cart.

The Rationale

One critical reason the Court put forward was consumers’ association of “Booking.com” with one source: Booking Holdings, Inc. Yet, under existing trademark law, no amount of consumer recognition can transform generic terms into registrable marks. Why? Because generic terms identify a category (like fruit, snacks, medical devices) that all market-players need to use to compete.

The Court also argued that the evidence did not show “Booking.com” to be in generic use. But that is just not so. The U.S. Patent and Trademark Office (USPTO) has routinely denied applicants a trademark for the word “booking” for uses like CruiseBooking.com and Fish&HuntBooking.com. Also, a simple internet search would have shown the Court that people most certainly treat booking as a category; witness the websites Hotelbooking.com, Airfarebooking.com and ibooking.com. Ask a friend what booking.com would do and the answer will come back swiftly and confidently—booking services.

Uncertainty Unleashed

Before the Court’s decision, the trademark office checked to see if competitors used a term like “tax preparation” or “booking” or “landscaping” to sell the same service or goods. When they found competitors using the same term, they treated this as evidence that the term was generic. The Court chose to ignore this sensible approach, which opens the door for a lot of uncertainty going forward.

How far should the Court’s decision reach? Should registration of “Booking.com” preclude registration or use of trademarks like “ebooking.com,” “autobooking.com,” or “boatbooking.com”? Should the Court’s decision permit registration of trademarks like grocerystore.com; dolls.com; or lawnmowing.net, which would make registration and use of mom and pop versions like Tedslawnmowing.com more expensive, maybe even impossible? Of course not. No one owns generic terms. They belong to all of us—like our national parks.

Take Steps Now to Protect Your Business

For now, Booking.com is the law, so here are some options for small businesses looking to use and register trademarks incorporating a generic category.

• Check both the domain name registry and the USPTO database to determine if the purely generic name is available for use and registration as a domain name and a trademark. If it is, consider registering the generic name along with .com or .net as a trademark. If the generic name is not available on either database, consideration must be given to the likelihood that the owner of a generic name plus “.com/.net” will demand a license fee for use of that generic name in combination with other words.
• Refer to your business as a .com or .net provider of goods. In the Booking.com case, the Court attempted to create a new class of business that provides online booking services that it called “a Booking.com”. So, for a business providing services or goods over the internet, such as Marystaxprep.com, you should refer to the business as “a taxprep.com.” This approach could help prevent one of your competitors from registering “taxprep.com” as a trademark.

Image Source: Deposit Photos
Author: stuartmiles
Image ID: 6496641