The Domain Name Hustle Is About to Get Way More Intense
A recent U.S. Supreme Court ruling that allows companies to trademark generic URLs could change how the web works
Imagine if a brand could monopolize the commonplace word that describes its wares, like if Apple could trademark “computers” and sue competing manufacturers who use the term.
That seems wrong. Right? You might resist this because it unfairly limits competition.
Apple wouldn’t be succeeding based on consumer goodwill, but because the federal government’s Patent and Trademark Office (PTO) granted it a linguistic monopoly. And thanks to this (fictional) mark, the company could increasingly box out other businesses by aggressively policing its intellectual property, sending cease-and-desist letters to brands using the word “computers” until only the most wealthy, established, and tenacious device makers, able to litigate expensive claims, remained in business. That would hurt commerce and consumers, which is why trademark law traditionally prohibited generic marks.
Now, let’s take this generics scenario online. A travel reservation services company seeks to register a trademark for Booking.com, say, a brand name composed of two generic terms, “booking” and “.com.” Arguably, the harm to consumers and competition is compounded somewhat, just because of the internet’s infrastructure. The company could aggressively police any competitor with a similar top-level or secondary domain name, like ebooking.com, ibooking.com, or ubooking.net, and we’d end up with fewer choices in the market and fewer available addresses — a narrower web, essentially.
Plus, a generic.com domain name already comes with certain inherent advantages. It’s easy to remember and find online and is likely to rise to the top of searches. Add a trademark to these built-in bonuses — giving the generic.com the option to claim numerous domains are infringing on its property — and eventually it could take over an “area” of the internet simply because it happened to snag what was a valuable address to begin with.
That’s problematic. Or so said the PTO in this nonfictional scenario when the actual matter USPTO v. Booking.com made it to the U.S. Supreme Court this year.
Remarkably, the nonprofit digital civil liberties champion Electronic Frontier Foundation (EFF) filed a “friend of the court” brief siding with the PTO, which it usually opposes. In a blog post titled “Strange Bedfellows,” EFF said granting Booking.com a trademark for its brand composed of two generic terms would harm consumers and limit competition while increasing litigation.
Booking.com countered that the concerns were “nonsense,” and justices recently considered the competing claims at a historic hearing.
Improvising in a crisis
The Booking.com hearing was an extraordinary affair — because the court was closed due to the coronavirus, it became the first time the public could listen in on the justices questioning counsel live without attending court.
The assistant solicitor general for the Department of Justice took a classic approach, opening with this statement that could have been made in 1890:
It is a fundamental principle of trademark law that no party can obtain a trademark for a generic term like “wine,” “cotton,” or “grain” … no matter how much money and effort the user has poured into promoting the sale of its merchandise and what success it has achieved in securing public identification. In other words, secondary meaning or acquired distinctiveness is simply irrelevant to generic terms. That principle controls here.
Attorney Lisa Blatt, representing Booking.com, went full-on 2020. Referencing national shortages amid the pandemic, she conceded, “Sometimes people think of generic word .coms generically. I have searched every grocerystore.com looking for toilet paper. I have now started looking at every hardware.com. I am using fooddelivery.com for all of my takeouts these days.”
However, Booking.com is different, Blatt argued. Surveys showed consumers know it’s a distinct brand.
Justice Stephen Breyer was skeptical. “Here, the power of your trademark is exactly growing out of the fact that everybody knows there’s one .com with one name. And if you can [register these marks] in the future, you don’t have to worry about searching the internet for toilet paper from grocerystores.com. There will only be one… one and only one. There will be pizza.com, there will be cookies.com, there will be flowers.com, etc.”
Breyer complained that these trademarked generic.com domains would police similar sites like fflowers.com or ipizza.com or ebookings.com out of business. “So we’re creating an area of exclusivity that goes well beyond the name,” he said.
Plus, there’s reason to doubt the surveys. Consumer identification of Booking.com “flows simply from the fact that loads of people now know that each internet company has one name,” the justice said. In fact, the same surveys that showed 74% of consumers know Booking.com is a distinct brand also showed 33% recognition for washingmachines.com, which is not a brand. “So you’re taking internet power, not just advertising or commercial product power,” Breyer accused Blatt.
But she assured the justices that Booking.com has no intention of policing its way to a monopoly, and said it shouldn’t be deprived of the legal protection available to other recognized brands just because it nabbed a great domain name, basically.
Ultimately, Blatt convinced everyone but Breyer.
On June 30, in an 8-1 decision written by Ruth Bader Ginsburg, the majority of justices found that “because ‘Booking.com’ is not a generic name to consumers, it is not generic.” Breyer was the lone dissenter.
Based on surveys, Ginsburg concluded, the brand showed people know it. She dismissed the PTO’s policy concerns, saying a “term styled ‘generic.com’ is a generic name for a class of goods or services only if the term has that meaning to consumers.” In other words, not every generic.com trademark will be granted and the nightmare scenario Breyer envisioned — where there will be one and only one purveyor of any good or service online — won’t materialize.
It’s impossible to know whether Booking.com will keep its word about not policing its mark aggressively. Indeed, Justice Breyer wondered in his dissent why the brand sought to register if it didn’t intend to protect its property. Trademark attorney John Strand, of the firm Wolf Greenfield, jokes that perhaps in a few years Booking.com may feel less beholden to those Supreme Court promises. But even if it’s perfectly scrupulous, future trademarked generic.coms might not play nice.
Strand predicts the ruling will lead to a generic domain trademark registration rush. “There has been a prohibition on generic marks,” he tells OneZero. “This is an opening. I would be shocked if another company doesn’t try to push open the door further.”
EFF staff attorney Cara Gagliano agrees. She foresees much more litigation to come. “The decision in the Booking.com case is extremely disappointing, and it’s likely to lead to even more lawsuits (and threats of lawsuits) down the road,” she said in a statement to OneZero. “We are expecting a substantial increase in registrations for combinations of generic words and top-level domains, leading to even more uncertainty and drawn-out court cases.”
EFF is “especially disappointed” by the court’s conclusion that generic.com terms may indicate a trustworthy “source” because only one entity can have a given address at any time. Essentially, justices found that consumers might recognize a brand because of its location (or think they do in the case of washingmachines.com). Generic.coms thus benefit from internet infrastructure bolstering their trademark claim rather than actual earned consumer goodwill — one more accidental bonus apart from the inherent advantages those valuable addresses already confer, like memorability.
Gagliano worries the Supreme Court just paved the way for every generic.com to register a trademark, despite the limitations justices say they placed on the ruling by concluding it depends on proven consumer perception. And she’s not alone.
The worst-case scenario Breyer envisions is that a few powerful generic.coms that already benefit from their addresses will end up dominating the internet, capitalizing on its architecture to draw in consumers and box out competitors while using intellectual property law to untangle this web we weave until all searches lead to them. Or, as he put it in his dissent, “By making such terms eligible for trademark protection, I fear [the] decision will lead to a proliferation of “generic.com” marks, granting their owners a monopoly over a zone of useful, easy-to-remember domains. This result would tend to inhibit, rather than to promote, free competition in online commerce.”