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Book1ng.Com B.V. v. The United States Patent and Trademark Office

United States Court of Appeals, Fourth Circuit

February 4, 2019

BOOK1NG.COM B.V., Plaintiff - Appellee,
v.
THE UNITED STATES PATENT AND TRADEMARK OFFICE; ANDREI IANCU, in his official capacity as Under Secretary of Commerce for Intellectual Property and Director of the United States Patent and Trademark Office, Defendants - Appellants. AMERICAN INTELLECTUAL PROPERTY LAW ASSOCIATION, Amicus Curiae. BOOKING.COM B.V., Plaintiff - Appellant,
v.
THE UNITED STATES PATENT AND TRADEMARK OFFICE; ANDREI IANCU, in his official capacity as Under Secretary of Commerce for Intellectual Property and Director of the United States Patent and Trademark Office, Defendants - Appellees. AMERICAN INTELLECTUAL PROPERTY LAW ASSOCIATION, Amicus Curiae.

          Argued: October 31, 2018

          Appeals from the United States District Court for the Eastern District of Virginia, at Alexandria. Leonie M. Brinkema, District Judge. (1:16-cv-425-LMB-IDD)

         ARGUED:

          Tyce R. Walters, UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C., for Appellants/Cross-Appellees.

          Jonathan Ellis Moskin, FOLEY & LARDNER LLP, New York, New York, for Appellee/Cross-Appellant.

         ON BRIEF:

          Chad A. Readler, Acting Assistant Attorney General, Nathan K. Kelley, Solicitor, Thomas W. Krause, Deputy Solicitor, Christina J. Hieber, Senior Counsel for Trademark Litigation, Mark R. Freeman, Civil Division, UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C.; Tracy Doherty-McCormick, Acting United States Attorney, OFFICE OF THE UNITED STATES ATTORNEY, Alexandria, Virginia; Mary Beth Walker, Associate Solicitor, Molly R. Silfen, Associate Solicitor, Office of the Solicitor, UNITED STATES PATENT & TRADEMARK OFFICE, Alexandria, Virginia; for Appellants/Cross-Appellees.

          Brian Kapatkin, Eoin Connolly, FOLEY & LARDNER LLP, Washington, D.C., for Appellee/Cross-Appellant.

          Myra H. McCormack, President, AMERICAN INTELLECTUAL PROPERTY LAW ASSOCIATION, Arlington, Virginia; Theodore H. Davis, Jr., Jennifer R. Findley, Alexandra N. Martinez, KILPATRICK TOWNSEND & STOCKTON LLP, Atlanta, Georgia, for Amicus Curiae.

          Before KING, DUNCAN, and WYNN, Circuit Judges.

          DUNCAN, CIRCUIT JUDGE:

         The United States Patent and Trademark Office (the "USPTO") and Booking.com ("Booking.com") both appeal the district court's summary judgment ruling regarding the protectability of the proposed trademark BOOKING.COM.[1] The USPTO appeals on the ground that the district court erred in concluding that BOOKING.COM is a protectable mark. Booking.com cross appeals, arguing that it should not be required to pay the USPTO's attorneys fees under 15 U.S.C. § 1071(b)(3). For the reasons that follow we affirm as to both the appeal and the cross-appeal.

         I.

         Before we recount the facts of this case, we briefly discuss the legal trademark context in which it arises. Trademark law protects the goodwill represented by particular marks and serves the twin objectives of preventing consumer confusion between products and the sources of those products, on the one hand, and protecting the linguistic commons by preventing exclusive use of terms that represent their common meaning, on the other. OBX-Stock, Inc. v. Bicast, Inc., 558 F.3d 334, 339-40 (4th Cir. 2009).

         In order to be protectable, marks must be "distinctive." To determine whether a proposed mark is protectable, courts ascertain the strength of the mark by placing it into one of four categories of distinctiveness, in ascending order: (1) generic, (2) descriptive, (3) suggestive, or (4) arbitrary or fanciful. George & Co. v. Imagination Entm't Ltd., 575 F.3d 383, 393-94 (4th Cir. 2009). Marks falling into the latter two categories are deemed inherently distinctive and are entitled to protection because their intrinsic nature serves to identify the particular source of a product. In contrast, descriptive terms may be distinctive only upon certain showings, and generic terms are never distinctive. This dispute concerns only the first two of these four categories, with Booking.com arguing the mark is descriptive and the USPTO arguing it is generic.

         A term is generic if it is the "common name of a product" or "the genus of which the particular product is a species," such as LITE BEER for light beer, or CONVENIENT STORE for convenience stores. OBX-Stock, Inc., 558 F.3d at 340. Generic terms do not contain source-identifying significance--they do not distinguish the particular product or service from other products or services on the market. George & Co., 575 F.3d at 394. Accordingly, generic terms can never obtain trademark protection, as trademarking a generic term effectively grants the owner a monopoly over a term in common coinage. If protection were allowed, a competitor could not describe his goods or services as what they are. CES Publ'g Corp. v. St. Regis Publ'ns, Inc., 531 F.2d 11, 13 (2d Cir. 1975).

         In contrast, descriptive terms, which may be protectable, describe a "function, use, characteristic, size, or intended purpose of the product," such as 5 MINUTE GLUE or KING SIZE MEN'S CLOTHING. Sara Lee Corp. v. Kayser-Roth Corp., 81 F.3d 455, 464 (4th Cir. 1996). In order to be protected, a descriptive term must have acquired secondary meaning. Hunt Masters, Inc. v. Landry's Seafood Rest., Inc., 240 F.3d 251, 254 (4th Cir. 2001). Secondary meaning indicates that a term has become sufficiently distinctive to establish a mental association in the relevant public's minds between the proposed mark and the source of the product or service. George & Co., 575 F.3d at 394.

         Against this background, we consider the facts before us.

         II.

         Booking.com operates a website on which customers can book travel and hotel accommodations. It has used the name BOOKING.COM since at least 2006. In 2011 and 2012, Booking.com filed four trademark applications for the use of BOOKING.COM as a word mark and for stylized versions of the mark with the USPTO. Booking.com sought registration for, inter alia, Class 43 services, which include online hotel reservation services.[2]

         The USPTO examiner rejected Booking.com's applications, finding that the marks were not protectable because BOOKING.COM was generic as applied to the relevant services. In the alternative, the USPTO concluded that the marks were merely descriptive and that Booking.com had failed to establish that they had acquired secondary meaning as required for trademark protection. After the examiner denied Booking.com's motion for reconsideration, Booking.com appealed to the Trademark Trial and Appeal Board (the "TTAB").

         The TTAB affirmed the USPTO's four refusals of registration in three separate opinions. These opinions all concluded that BOOKING.COM was a generic term for the services offered, and therefore ineligible for trademark protection, because "booking" generically refers to "a reservation or arrangement to buy a travel ticket or stay in a hotel room" or "the act of reserving such travel or accommodation"; ".com" indicates a commercial website; and consumers would understand the resulting composite BOOKING.COM to primarily refer to an online reservation service for travel, tours, and lodging, which are the services proposed in Booking.com's applications. Booking.com B.V. v. Matal, 278 F.Supp.3d 891, 896 (E.D. Va. 2017) (summarizing the TTAB's findings). In the alternative, the TTAB concluded that BOOKING.COM is merely descriptive of Booking.com's services and that Booking.com had failed to demonstrate that the mark had acquired secondary meaning, as required for trademark protection.

         Booking.com appealed the TTAB's decisions by filing this civil action under 15 U.S.C. § 1071(b) against the USPTO and the USPTO's director in the Eastern District of Virginia in April 2016.[3] It argued that BOOKING.COM was a descriptive or suggestive mark eligible for protection. In support of its argument, Booking.com submitted new evidence to the district court. This evidence included a "Teflon survey, "[4] indicating that 74.8% of consumers recognized BOOKING.COM as a brand rather than a generic service.

         The district court held that although "booking" was a generic term for the services identified, BOOKING.COM as a whole was nevertheless a descriptive mark. The district court further determined that Booking.com had met its burden of demonstrating that the proposed mark had acquired secondary meaning, and therefore was protectable, as to the hotel reservation services described in Class 43. The court therefore partially granted Booking.com's motion for summary judgment, ordering the USPTO to register two of the marks and remanded for further administrative proceedings as to the other two.

         The USPTO subsequently filed two motions. Pursuant to Federal Rule of Civil Procedure 59(e), the USPTO sought to amend the court's order requiring the USPTO to register the two trademarks, requesting instead that the court remand for further administrative proceedings. It also filed a motion for expenses pursuant to 15 U.S.C. § 1071(b)(3), which would require Booking.com to pay $76, 873.61 of the USPTO's expenses under 15 U.S.C. § 1071(b)(3). These expenses included the salaries of the PTO's attorneys and paralegals that worked on the defense action. The district court denied the USPTO's motion to amend as to the two marks, reasoning that they were registerable as trademarks and that no further administrative proceedings were necessary. However, the district court granted the USPTO's motion for expenses. Both the USPTO and Booking.com appealed. The USPTO and Booking.com challenge, respectively, whether BOOKING.COM is protectable, and whether Booking.com must pay the USPTO's attorneys fees.

         III.

         We turn first to the USPTO's contention that the district court erred in concluding that BOOKING.COM is a protectable trademark. According to the USPTO, BOOKING.COM is a generic, not a descriptive, term that can never be protected.

         We review a district court's grant of summary judgment based on the conclusion that a mark is sufficiently distinctive to warrant trademark protection de novo. Retail Servs. Inc. v. Freebies Publ'g, 364 F.3d 535, 541-42 (4th Cir. 2004). The question of whether a proposed mark is generic is a question of fact that is subject to deferential review. See Swatch AG v. Beehive Wholesale, LLC, 739 F.3d 150, 155 (4th Cir. 2014) (citing Pizzeria Uno Corp. v. Temple, 747 F.2d 1522, 1533 (4th Cir. 1984)).

         Critically to our analysis, the USPTO concedes that if BOOKING.COM may properly be deemed descriptive, the district court's finding that it has acquired secondary meaning was warranted. Rather, the USPTO only challenges the district court's determination that BOOKING.COM is not generic. Therefore, the limited question on appeal is whether the district court erred in finding that BOOKING.COM is not generic. For the reasons that follow, we conclude that the district court did not err in finding that there was no genuine issue of material fact on the issue of genericness and that, on these facts, BOOKING.COM is a protectable trademark.

         Before undertaking our analysis, two issues pertinent to the genericness inquiry bear further elaboration: first, who bears the burden of proving genericness, and second, the framework for determining whether a proposed mark is generic.

         A.

         We have never directly addressed the issue of which party bears the burden of proving genericness on appeal when registration of a mark is denied.[5] However, the Federal Circuit has long held, and we agree, that in registration proceedings, the USPTO "always bears the burden" of establishing that a proposed mark is generic. In re Cordua Rests., Inc., 823 F.3d 594, 600 (Fed. Cir. 2016); see In re Merrill Lynch, Pierce, Fenner, and Smith, Inc., 828 F.2d 1567, 1571 (Fed. Cir. 1987) (explaining that the burden of proving genericness "remains with" the PTO) (emphasis added). This is so because finding a mark to be generic carries significant consequence, as it forecloses an applicant from any rights over the mark--once a mark is determined to be generic, it can never receive trademark protection. See 2 J. Thomas McCarthy, McCarthy on Trademarks and Unfair Competition, § 12:12 (5th ed. 2018) (explaining that finding a mark to be generic is a "fateful step" as it may result in the "loss of rights which could be valuable intellectual property").

         We therefore hold here that the USPTO bears the burden of proving that BOOKING.COM is generic in the instant case.

         B.

         We next discuss the framework for determining whether a mark is generic. As we have discussed, generic terms are the "common name of a product or service itself." Sara Lee, 81 F.3d at 464. To determine whether a term is generic, we follow a three-step test: (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.[6] Glover v. Ampak, Inc., 74 F.3d 57, 59 (4th Cir. 1996).

         Once a term is deemed generic, it cannot subsequently become non-generic. A term may be generic if, for example, it was previously determined to be generic by a court. Kellogg Co. v. Nat'l Biscuit Co., 305 U.S. 111, 117 (1938) (finding that "shredded wheat" was generic because a court had already deemed it to be so). A term may also be deemed generic where evidence suggests that a term was "commonly used prior to its association with the products [or services] at issue." Hunt Masters, 240 F.3d at 254-55. In such cases of common usage, a court may find that a term is generic even without looking to evidence of consumer recognition. Id. For example, in Hunt Masters, we found that the term "crab house" was commonly used, as there were many restaurants called "crab houses" across the country, id. at 254 n.1, and concluded, therefore, that the district court did not err in declining to consider consumer survey evidence.

         If a term is deemed generic, subsequent consumer recognition of the term as brand-specific cannot change that determination. See Retail Servs., Inc., 364 F.3d at 547. Indeed, courts have explained that "no matter how much money and effort the user of a generic term has poured into promoting the sale of its merchandise and what success it has achieved in securing public identification," that user cannot claim the exclusive right through trademark protection to call the product or service by its common name. Abercrombie & Fitch Co. v. Hunting World, Inc., 537 F.2d 4, 9 (2d Cir. 1976).

         In this case, neither party disputes the district court's finding at the first step: that the mark is used to identify the class or product to which it belongs--here, making hotel reservations for others. Nor do they disagree as to step two: that the relevant purchasing public consists of consumers who use hotel reservation services offered via the internet or in person. Instead, the ...


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