On 30 June 2020, the Supreme Court of the United States (SCOTUS) rendered its decision in the key trademark case of US Patent and Trademark Office (USPTO) v. Booking.com B.V. (591 US ___, 2020) finding the mark Booking.com inherently distinctive, hence eligible for trademark registration.
The case stemmed from the refusal of the US Patent and Trademark Office (USPTO) to register the mark Booking.com for being a generic name for online hotel reservation services. According to the USPTO, “booking,” a generic term which means making travel reservations, combined with “.com,” also a generic term which means a commercial website, is not registrable because it results to a term that is descriptive, if not generic. USPTO urged SCOTUS to adopt an almost encompassing rule that the combination of a generic word and “.com” (referred to as “generic.com” marks) necessarily results to a generic term incapable of being appropriated.
The SCOTUS, affirming the decisions of the US District Court for the Eastern District of Virginia and the Court of Appeals for the Fourth Circuit, rejected USPTO’s sweeping rule and found that a “generic.com” mark is not necessarily generic and may be eligible for trademark registration. The SCOTUS reiterated that for compound terms like the “generic.com,” the distinctiveness inquiry must train on the term as a whole and not on its individual components. Hence, although a mark consists of individually generic words, the resulting mark is not necessarily generic and may be inherently distinctive. A “generic.com” term is a generic name for a class of goods or services only if the term has that meaning to consumers.
However, the SCOTUS was also careful in saying that while the rule classifying “generic.com” terms as generic is rejected, it does not mean that such terms are automatically considered non-generic. Whether any given “generic.com” term is generic depends on whether consumers in fact perceive that term as the name of a class or, instead, as a term capable of distinguishing among members of the class.
Netrepreneur Connections Enterprises Inc. v. Anton Sheker, Seo.Com.Ph
Netrepreneur Connections Enterprises, Inc. (Netrepreneur) has registered trademark rights in the Philippines over the mark SULIT.COM.PH with a disclaimer on the domain name extension “.com.ph”. SULIT.COM.PH was arguably the number one online Philippine marketplace, ranking 9th on Alexa among top Philippine websites in terms of web traffic. Meanwhile, Anton Sheker (Sheker) uses the domain name <sulit.ph> for its classifiedads.ph website, an online classified advertising listing.
On the basis of its Philippine trademark registration, Netrepreneur filed an administrative action against Sheker before the WIPO Arbitration and Mediation Center for the transfer of the domain name registration <sulit.ph>.
In its decision dated 19 August 2011, WIPO Arbitration and Mediation Center found that respondent Sheker did not infringe on the complainant’s rights with the use of the <sulit.ph> domain name.
In ruling in favor of the respondent, the panel considered the “relied-upon meaning” of the word “sulit,” and the fact that Netrepreneur has not shown trademark rights over the word “sulit” as a standalone term. “Sulit,” a Filipino word for good buy or good deal, is commonly used in abundance for advertising or in businesses which involve the buying and selling goods.
Furthermore, the panel ruled that Sheker has provided a plausible explanation in its choice of the disputed domain name, i.e. it was registered in the belief that since “sulit” is a generic or descriptive word, it would not violate any existing trademark rule or policy. As such, Sheker was not using the domain name in bad faith.
Booking.com Decision v. Sulit.com.ph Decision
The two decisions discussed above may be considered inconsistent on two points:
1. Determination of the distinctiveness of a compound term
A compound wordmark is comprised of two or more distinct words or words and syllables that are represented as one word. (USPTO Trademark Manual of Examining Procedure, 1213.05(a))
The WIPO arbitration panel applied its past decisions under the Uniform Dispute Resolution Policy (“UDRP”) that generic top-level domain (gTLD) elements e.g. “.com” should be disregarded when considering the issue of identity or confusing similarity between contending marks. In reaching its conclusion, the panel made a determination of whether the complainant has rights over “sulit” as a standalone word, and not over the entire phrase “sulit.com.ph.” However, using the dominancy test, the panel found “sulit” as the dominant feature of the complainant’s mark and ruled that the domain name <sulit.ph> is confusingly similar with the trademark SULIT.COM.PH.
Meanwhile, the SCOTUS highlighted in its Booking.com decision that the determination of whether a mark is inherently distinctive or not rests not on the individual components of the mark but rather on the term as a whole. As such, even if the words “booking” and “.com” may be considered generic individually, their combination does not necessarily result to a generic term ineligible for trademark registration.
2. Domain name as a source-identifier
WIPO AMC Panel ruled that the use of the domain name <sulit.ph> does not infringe upon Sulit.com.ph’s trademark rights. The panel held that the Sheker had legitimate interest over the <sulit.ph> domain name so long as the use of the term “sulit” was consistent with its description and meaning.
On the other hand, the SCOTUS held that a “generic.com” term may also convey to consumers a source-identifying characteristic: an association with a particular website. Since only one entity can occupy a particular Internet domain name at a time, a consumer who is familiar with that aspect of the domain-name system can infer that Booking.com refers to some specific entity. Thus, consumers could understand a given “generic.com” term to describe the corresponding website or to identify the website’s proprietor. The use of a “generic.com” term as a trademark and as a domain name may be considered interrelated. Since a “generic.com” mark serves to identify a particular website, the use of the “generic.com” term in another website’s domain name may result to confusion on the public and may infringe upon the rights of the registered trademark.
Registration of .com marks with the Philippine Bureau of Trademarks
Registration of domain names as service marks is allowed under Philippine trademark rules. In April 2015, the Bureau of Trademarks issued a Memorandum which reads as follows:
“In the advent of the internet, some words and symbols have become commonplace in the market which sometimes form part of a mark. Examples of these words and symbols are “@”, “#”, “.com”, “.ph”, “.net”, etc. When these words or symbols appear as forming part of the mark subject of an application, they must be disclaimed on the ground that they do not function as trademarks in accordance with Rule 608 of the Trademark Regulations.”
These marks may even be granted priority of action and/or examination pursuant to Rule 601 of the Rules and Regulations on Trademarks, Service Marks, Trade Names, and Marked or Stamped Containers of 2017.
Based on the 2015 Memorandum and Rule 601 of the Rules and Regulations, it appears that the BOT has the same policy as the USPTO’s before the SCOTUS decision in that .com marks must be dissected and the generic parts like “.com” “must be disclaimed on the ground that they do not function as trademarks.”
A quick search in the Philippine trademark database revealed some 215 registered “.com” marks for various goods and services. Generally, use of the gTLD element in these marks were disclaimed. Some of the registered marks were considered “generic.com” marks such as “TRIP.COM” for travel and transportation services in Class 41 and “SEAMANJOBSITE.COM” in Class 35. These registrations of “generic.com” marks carry disclaimer not only over the use of the gTLD but also on the second level domain (SLD) element of the mark. Curiously, however, “BOOKING.COM” in Class 43 seems to be an exception as it was granted protection in the Philippines with no disclaimer on either “booking” or “.com.” At least that was what appeared in the database last time we checked.
With the SCOTUS decision in “Booking.com,” will the BOT follow suit and change its policy?