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In an 8-1 decision, the Supreme Court of the United States agreed with the Internet Commerce Association’s position that under certain conditions, a generic .com domain name can obtain a trademark registration, albeit a very weak one, overruling the position advanced by the U.S. Patent and Trademark Office (USPTO).

The USPTO had taken the position that no matter what, a generic .com domain name could never serve to identity a particular business when used in connection with its generic meaning. The ICA argued in its amicus brief, and now the Supreme Court of the United States has agreed, that the USPTO’s blanket refusal to allow trademark registration of such domain names has no legal basis.  Instead, the correct standard is whether the domain name is identified with a particular company in the eyes of the consumer.  Thus, when consumers recognize that Booking.com refers to a particular company, rather than to booking services generally, Booking.com is eligible for a registered trademark.

The Supreme Court made clear that such generic .com trademarks are inherently weak and the scope of protection is limited so that granting such a trademark would not generally entitle the trademark owner to other domain names that employ the same generic word descriptively.

Many members of the ICA own valuable generic domain names. The Supreme Court decision, in our view, protects the value of generic .com domain names because the Supreme Court confirmed that they are now potentially registrable as trademarks with sufficient consumer identified association, an attractive feature for end-users. The decision also ensures the continued viability of domain name registrations which are similar to the generic .com if those domain names are used descriptively and in good faith, since the Supreme Court confirmed that a trademarked generic .com will be given a very weak and limited scope of protection.

The ICA again extends its gratitude to David Weslow from Wiley for filing an excellent amicus brief on behalf of the ICA.

Summary of the Case

On June 30, 2020 the United States Supreme Court issued its decision in United States Patent and Trademark Office et al. v. Booking.com B.V. The case concerned the eligibility for federal trademark registration for “Booking.com”. The USPTO had refused registration, and the trademark applicant, Booking.com B.V. went to court. The lower court determined that Booking.com, unlike the term, “booking” standing alone, was not generic, and the appeals court agreed with the lower court’s decision. The USPTO then appealed to the Supreme Court, in a final attempt to affirm its contention that as a rule, combining a generic term like “booking” with a “.com” still yields a generic composite that is not eligible for trademark registration. In the 8-1 ruling, the Supreme Court rejected the USPTO’s contention, and determined that ultimately, there could be no blanket rule that prohibits a generic .com from trademark registration, as if the generic .com was perceived by consumers as a brand associated with a particular company, then it effectively qualifies for trademark status.

Before the Booking.com Decision, Were All Generic .com Domains Ineligible for Trademark Registration?

No. As the Supreme Court pointed out, the USPTO previously issued trademark registrations for generic .com domain names in some circumstances. The Supreme Court pointed out that for example, ART.COM had already obtained a registered trademark on the principal register for “online retail store services” offering art points, original art, and reproductions”. The Supreme Court also pointed out for example, that the USPTO already issued a trademark registration for DATING.COM on the supplemental register for “dating services”. There are numerous other examples of this, including WEATHER.COM, LAW.COM, and even HOTELS.COM. In the latter case, Hotels.com in fact has three registered trademarks, inter alia for travel agency services related to transportation, for computer software and applications for information on travel, and travel agency services for entertainment and event bookings. HOTELS.COM was however, previously found by an appeals court to be ineligible for a registered trademark for ‘travel agency services for hotel reservations’, because despite substantial evidence of consumer identification of HOTELS.COM as identifying the particular company, the combination of HOTELS.COM was still generic when it came to hotel reservations. Accordingly, before the Bookings.com case there was significant inconsistency when it came to which generic .com domain names were eligible for trademark registration, with some registrations being permitted, and some not. The USPTO wanted to solve this by making a general rule prohibiting all such registrations, but the Supreme Court decided that in some instances there should be a registration granted, but it turns on the facts.

So if Generic .com Domain Names were Trademarkable Before, What was the Controversy with the Booking.com Case?

The USPTO wanted to create a new rule; a broad prohibition on registered trademarks for generic .com domain names. In other words, the USPTO wanted to make it so in the future, there was zero chance of ever getting a trademark for a generic .com.  The Supreme Court rejected this approach and instead affirmed the longstanding approach of determining eligibility on a case by case basis based upon consumer perception of a particular generic .com.

What is the Key Test for Registrability of a Generic .com Domain Name?

The primary consideration is whether a generic .com is perceived by consumers as being identified with a particular company. As long provided for in the Lanham Act, the key to this is consumer perception, i.e. the primary significance of the mark to the relevant public. The term “booking” itself was agreed by all concerned to be a generic term for booking hotel reservations. The question then arose whether adding “.com” changed that, since the entire mark must be viewed as a whole. The evidence was that BOOKING.COM was perceived by consumers to be a particular provider of booking services, rather than a generic term referring to booking providers. The Supreme Court noted that no one would ask to be referred to a good “Booking.com” provider, as an indication that when taken as a whole, Booking.com did not really refer to a generic “thing”, but rather to a particular service provider, and was therefore not a generic name to consumers.

The USPTO argued, and the Supreme Court rejected, the contention that every generic .com was generic regardless of consumer perception. The USPTO as aforementioned, wanted to bar all generic .com domain names from becoming registered trademarks, generally, arguing that “generic .com” was no different than “Generic Company”, in other words that Wine.com is equivalent to “The Wine Company”. The Supreme Court found that to be a faulty premise, since there is in law no absolute bar to registration of generic terms per se; rather it is always matter of consumer perception as to whether a particular term is in fact, generic. Moreover, the Supreme Court noted that on the Internet, there can only be one “generic .com” since the domain name is associated with a particular website, whereas there can be numerous “Generic Companies”, thereby adding to the possibility of a generic .com being potentially perceived as a distinctive and particular source, rather than a generic term.

The Supreme Court also rejected the USPTO’s argument that no matter how much money or effort has been poured into promoting a generic .com, it cannot rise to the level of being identified with a particular company. The Supreme Court said that there is and can not be any “automatic” prohibition, since the relevant criterion for registrability is always a matter of consumer perception.

What Proof of Consumer Perception of a Generic .com’s Being Identified With a Particular Company is Required?

Consumer surveys can show that a generic .com is perceived by consumers as identifying a particular company rather than a genus, although the Court noted that care must be taken when evaluating such surveys. The Court also stated that dictionaries, common usage by consumers and competitors and any other source of evidence bearing on how consumers perceive a term’s meaning can also assist.

Will Generic .com Domain Names be Automatically Entitled to a Registration?

Like before the Booking.com decision, when it comes to a generic .com, the USPTO will generally require proof that a mark is perceived by consumers as being identified with a particular company, so there is no automatic right to a trademark for a generic .com domain name just because it is used in commerce. It will continue to be a generally demanding threshold to overcome the initial assumption that a generic .com domain name is merely a composite of two generic terms.

Will My Generic .com Domain Name be Eligible for Trademark Registration?

That will depend. The Booking.com case made it clear that your generic .com domain name may be eligible, but whether your generic .com will be eligible will depend on the facts and circumstances. Are you able to show that through extensive use, promotion, sales, and marketing that consumers have come to associate your generic .com with your particular company? If you have only registered the generic .com and not extensively used and promoted it over a considerable length of time, and do not have substantial evidence to back up your claim of consumer identification, then your application would likely be rejected, especially if the applied for goods and services were closely associated with the generic term itself. It will be continue to be very tough for a generic domain names to be registered as trademarks, but based on the Booking.com case, the owner has a chance to prove that consumers identify the domain name with the owner’s particular company and thereby qualify for a trademark registration.

Are Generic .com Domain Names Now All Trademarkable?

No. Rather, they are all potentially trademarkable but it will depend on the facts and the evidence that is marshalled to prove consumer identification, which is arguably the same as before, although now the law is clearer as a result of the Booking.com decision.

Did the Booking.com Case Make it Easier for Trademark Owners to Take Away My Domain Name?

As discussed above, registered trademarks were obtainable even before the Booking.com case and the Booking.com case clarified the law and rejected the USPTO’s new proposed approach of prohibiting all generic .com domain names, period. Before the Booking.com case, there were already registered trademarks for Weather.com, Hotels.com, and others, yet there were few if any cases of these trademark owners using their trademark registrations to try to take away similar domain names. For example, registered alongside HOTELS.COM as a registered trademark, are ULTIMATEHOTELS.COM and SUPERSAVE-HOTELS.COM. Additionally, Laws.com exists as a website along the trademarked LAW.COM, and TheWeather.com exists as a website along with the trademarked WEATHER.COM.

It is doubtful that legitimately registered and used domain names that contain a generic word will be more susceptible to attack by generic .com trademark owners after the Booking.com decision. The Supreme Court noted the USPTO’s concern that allowing a generic .com to be trademarked could hinder competitors by preventing them from using the word “booking” or adopting domain names like “ebooking.com”[1] or “hotel-booking.com”. As the Supreme Court pointed out however, the concern over overly broad rights for generic .com trademark owner already exists when it comes to descriptive trademarks, and the law deals with this concern by “hemming in” the scope of such trademarks “short of denying trademark protection altogether”. In other words, such trademarks are inherently very weak, and the weaker the mark, the less likelihood of confusion. As the Court pointed out, when a trademark incorporates a very common generic word, such as hotels, or booking, consumers are less likely to think that other uses of the common term relate to the trademark owner alone. As an example, the Court pointed out that the word “grand” is in many hotel names, and consumers know to differentiate one from another. The Court noted that even if there were to be some confusion between a generic .com trademark registration and a similar domain name, the doctrine of “classic fair use” can protect the domain name owner where the domain name owner uses the domain name fairly and in good faith as a descriptive term. For example, HotelBookings.com ought to be safe from attack from Booking.com even after Booking.com gets a trademark registration, if it is used in a fair and descriptive manner. Nevertheless, domain name registrants must remain vigilant in their defense of generic and descriptive domain names in the event that a generic .com trademark owner attempts, as they are often prone to do, to overreach the actual limited scope of protection afforded to a generic .com trademark.

The Supreme Court specifically stated that existing principles of trademark law that provide weak marks with a very limited scope of protection guard against a monopoly on the term “booking” itself, even if Booking.com gets a trademark registration. The Supreme Court noted that “Booking.com itself acknowledged that close variations are unlikely to infringe” and that a trademark registration “would not prevent competitors from using the word ‘booking’ to describe their own services”.

Is the Booking.com Case Good for Domain Name Investors?

Yes, for three reasons. First, the domain name investment community is generally focused on the registration of generic domain names and the Booking.com case made it clear that such domain names are potentially trademarkable. This incrementally enhances the value of such generic .com domain names to end users because it offers the possibility that if a business builds a powerful, widely recognized brand on a generic .com domain name it may be eligible for trademark registration. If the possibility of trademark protection was permanently foreclosed, an end-user may have second thoughts about building its brand on a generic .com domain name that could never benefit from trademark protections, albeit modest protections, thus reducing demand for such generic .com domain names and likely valuations as well.  Second, the Supreme Court confirmed that inherently weak marks such as generic .com domain names are entitled to little scope of protection and domain name investors should not be prevented from continuing to use terms descriptively even when there is a similar registered trademark. Third, the Booking.com case highlighted the domain name industry and in particular showcased the substantial value and attractiveness of generic domain names, thereby boosting the industry. In his dissent, Justice Breyer noted the benefits that a generic .com owner has by being savvy enough to register such a “valuable piece of online real estate”. This is what domain name investors have been saying for years, and now a Supreme Court justice has proclaimed the same.

Nevertheless, domain name investors will need to monitor how this case is treated in subsequent court actions and UDRPs and ensure that generic .com trademark owners only obtain the limited protections that they are entitled to as suggested by the Booking.com case. It would have been preferable if the Court provided a more robust discussion of the limitations on generic .com trademarks. It will be interesting to see how this area of law evolves and how this case is interpreted in the future.

[1] Ebooking.com already has a USPTO registered trademark for EBOOKING.COM and a design.

By Zak Muscovitch

Should generic .com domain names never be entitled to trademark protection? When a domain name like booking.com is identified as a brand by the public, should it still be denied trademark protection as a matter of law? The ICA takes a position on this difficult question in an amicus brief submitted to the U.S. Supreme Court of the United States through its counsel, Wiley Rein LLP.

The brief asks the Supreme Court to affirm the current legal status quo as per the decision of the U.S. Court of Appeals for the Fourth Circuit holding that the addition of a top-level domain such as “.com” to an otherwise generic term may result in a protectible trademark where evidence demonstrates that the trademark’s primary significance to the public as a whole is the source of a product or service and not the product or service itself.

Many domain name owners have heavily invested in generic domain names which through extensive use and promotion, whether by domain name investors or a subsequent purchaser, are sometimes capable of acquiring distinctiveness and thereby affording trademark protection. Denying generic domain names the opportunity to ever be registered as a trademark would devalue otherwise valuable intellectually property assets by making them unappealing to companies seeking to develop brands that could be registered as trademarks.  Denying the possibility of trademark protection to generic domain names would not benefit domain name investors, but would rather harm them, by severely limiting the commercial potential of such generic domain names.

Additionally, new top-level domains – like “.homes,” “.inc,” “.doctor,” “.law,” “.bank,” “.cars,” “.news,” “.cpa,” “.ngo,” and “.organic” – hold great promise for improved e-commerce and online security, but their adoption will be stunted if the Government succeeds in foreclosing trademark protection for domain names in all cases, regardless of the degree of use and promotion.

The ICA’s Code of Conduct enshrines protection for intellectual property rights. The ICA’s brief explains how enabling trademark protection where warranted can help prevent two of the most common malicious activities involving the domain names, namely typosquatting and domain name theft. The ICA’s amicus filing supports intellectual property rights where warranted and stands against cybersquatting and malicious domain name theft.

To read the ICA’s amicus brief, please click here: Booking.com Amicus Brief

The ICA wishes to express its great appreciation to Wiley Rein LLP and attorney David Weslow (the winner of the inaugural ICA Lonnie Borck Memorial Award) for submitting such a well-argued brief on issues of importance to the domain name investment community.

Your .COM domain name is going to cost over 30% more unless ICANN, the group in charge of the domain name system, listens to the public and changes its mind about price increases. We created a tool to help you submit your viewpoint to ICANN. It takes 30 seconds! Use the tool here.

ICANN sets the price for .COM domains.  Verisign is the sole-source supplier of .COM domain names at the wholesale level, giving them an effective monopoly. Verisign charges $7.85 per year to register or renew a .COM domain name each year.  Verisign’s costs are estimated at between $2.50 to $2.90 per domain name per year.  Everything above that is pure profit.

Verisign already enjoys one of the highest profit margins of any company in the world. A further price increase is not justified. Yet ICANN staff want Verisign to increase prices on .COM registrants by 7% per year from the current $7.85 to $10.26 after four years. This will impose hundreds of millions of dollars of added expense on .COM registrants – simply to benefit Verisign.

ICANN is supposed to act in the public interest and to be responsive to public comment.  Here’s your chance! Take 30 seconds to let ICANN know what you think.

You can learn more about the issue in the following articles:

DomainInvesting: ICA: “Oppose price hikes on .Com”

Circle ID: Verisign’s Attempt to Increase its Fees Still Unjustified Despite Diversionary Tactic

Circle ID: Hundreds of Millions of Dollars at Stake as .COM Price Freeze Set to Expire

Domain Name Wire: .Com prices are going up after Verisign pays off ICANN

The Register: ICANN extracts $20m signing fee for $1bn dot-com price increases – and guess who’s going to pay for it?

The ICA submitted its comment to ICANN in connection with the Proposed Amendment 3 to the .COM Registry Agreement. ICA voices its concerns as to the effectiveness of ICANN’s Public Comment process in general as well as demonstrates that ICANN allowing Verisign to charge more for .COM domains is not justifiable.

We encourage everyone to read our full comment and to submit their own in opposition of ICANN allowing increases on .COM domains. You can do so here.

Read the full letter here: Letter to Cyrus Namazi – January 15 2020

ICANN’s announcement that it “reached a proposed agreement” with Verisign to amend the .com registry agreement raises serious concerns and questions. The Internet Commerce Association will be closely studying the proposed changes and will deliver its comments to ICANN in due course.

Amongst the preliminary concerns and questions that ICANN’s announcement raises are the following

1. The proposed price increase imposes hundreds of millions of dollars of unjustified expenses on .com registrants for the sole benefit of a registry provider that is already grossly overpaid for the services it provides. That ICANN puts the interest of one powerful company over the interests of millions of registrants raises questions as to ICANN’s legitimacy, its accountability and its governance structure.
2. Why does ICANN go through the charade of putting the agreement that it already reached out for public comment? Surely the time to seek meaningful public feedback is before reaching an agreement. Moreover, as we saw with the overwhelming public opposition to the renewed .org Registry Agreement, ICANN just does what it wants anyhow. ICANN’s pretense that it is responsive to the public interest is a farce.
3. Who wants higher .com prices? Is there any stakeholder or group, other than Verisign, that is eager to raise prices on .com? There isn’t, save and except perhaps other registry businesses that envision being able to raise their own prices as .com pricing goes higher. If ICANN was truly looking after the public interest and was truly acting in the best interest of stakeholders and registrants in particular, there would be no impetus whatsoever to raise prices.
4. ICANN’s express claim that it “is not a price regulator” is nothing more than a misguided effort at misdirection in respect of its actual obligations and duties as the steward of the .com registry. First, of course ICANN is not a regulator – only governments are regulators. Rather, ICANN is a steward that is mandated to look after the public interest, and is the sole party able to negotiate terms with its registry operator service providers. Accordingly, ICANN does not need to be a regulator to prevent unjustified price hikes on .com domain names – it just needs to fulfil its duty as the steward.
5. In fact, ICANN expressly admits, in the very same statement wherein it states that “it is not a price regulator”, that “pricing certainty [will be achieved] by limiting the potential maximum wholesale price for .COM domain names”. Pricing certainty is one of the most fundamental obligations of a steward entrusted with ensuring the stability of the Internet, as without pricing stability on .COM domain names massive upheaval could occur if captive market registrants face unrestrained pricing. ICANN goes on to state, “the .COM TLDis an important part of global commerce, making its continued secure, stable and resilient operation a top priority for both ICANN and Verisign”. And presumably, ICANN and the Department of Commerce realizes that, and that is precisely why price caps are necessary in the absence of the preferable competitive marketplace where registry contracts are put out for competitive bid, thereby assuring that the fees imposed by the .com registry for providing registry services reasonably reflect market rates.
6. The price increase from the current wholesale price of $7.85 to the maximum price in 2024, of $10.26, represents a $2.41 annual increase. That means that in October 2024, Verisign will be receiving an additional windfall of $344,630,000 per year, assuming that .COM registrations do not rise even further as they are expected to. Verisign is already making billions of dollars in pure profit from its ICANN contract, and there is absolutely no reasonable justification for increasing its revenue other than that it is good for Verisign. It is not good, however, for anyone else. Once again, ICANN is the victim of its long history of making woefully improvident deals on behalf of the Internet community. The pitiful $20 million that ICANN is to receive when Verisign is poised to make billions off of this deal is just the latest example.

NTEN is organizing a call this Thursday, December 5th, at 12 PM PST, 3 PM EST. They will be joined by Electronic Frontier Foundation, The National Council of Nonprofits, and Internet Society chapter leaders, as well as Jon Nevett from Public Interest Registry, and Erik Brooks and Nora Abusitta from Ethos Capital. Andrew Sullivan from Internet Society has been invited but has not confirmed participation.

You do not need to register with NTEN to participate. NTEN will post access details by 12/4/19 on this event listing.

Anybody interested in this important and controversial issue us encouraged to attend the call, submit and ask questions of the participants. To submit questions in advance, please email savedotorg@nten.org.

Events

During ICANN’s public comment period on lifting price caps on .org domains, over 3200 people submitted comments, overwhelmingly opposing price cap removals.

ICANN however, seemingly ignoring these comments, has granted PIR the right to raise prices on .org domains.

In response, NameCheap, a well-known domain registrar, has submitted a Request for Reconsideration to ICANN. Yesterday, ICANN’s Ombudsman, Herb Waye, sided with ICANN, equating many of the comments submitted as “spam”, generated through form letters provided by the ICA.

ICA is hugely disappointed in the Ombudsman’s response, which mischaracterizes the nature of the submitted comments. We ask for an apology to the numerous people who sent those comments in and to retract his ill-advised statements. 

You can read the full letter we sent to the Ombudsman here.

If you’re inclined to let ICANN know how they can improve their comment process, you have until tomorrow, Friday 13th, to fill out their survey here. Ironically, one of the questions in the survey asks whether you’d “respond more often to Public Comments if the consultation included short and precise questions regarding the subject matter.”

Letter to ICANN Ombudsman September 12, 2019

ICA’s recommendation is that while IGOs and INGOs should have effective access to rights protection mechanisms which reasonably meet their unique requirements not to submit to national courts, no new procedure is required because they can use the UDRP.

Read the full letter: Letter to Mary Wong re GNSO Policy Development Process on IGO-INGO Access to Curative Rights Protection Mechanisms Policy Recommendations for ICANN Board Consideration

In addition to the previously submitted comment letters on the .org and .info registry agreements, the ICA has also submitted comments to ICANN on the .biz and .asia registry agreements.

ICA Comment on Asia Proposed RegistryAgreement Renewal

ICA Comment on biz Proposed Registry Agreement Renewal

In a statement released today, PIR, the operator of the .ORG domain name registry, did not rule out the possibility of substantial price hikes on .org domain names if its new proposed contract is approved by ICANN.

In response to the thousands of objections submitted to ICANN by individual registrants, charities, religious groups, community organizations, and some of the largest and most prestigious organizations in America, PIR asked its customers to “rest assured” that it will not raise prices “unreasonably” and claims that it has “no specific plans” to hike prices.

Conspicuously absent however, is any promise to its customers not to raise prices beyond its current 10% price hike cap. Clearly, PIR is keeping all of its options open, and even in the professed absence of “any specific plans”, it is apparent that PIR likely has general plans to raise prices beyond the current 10% price cap with no limit in sight. This is hardly surprising, for if PIR intended to limit price hikes to the generous currently permitted 10% per year, it would have had no need whatsoever to request the removal of all price caps in the new proposed contract, and accordingly PIR’s claim that it is “simply moving to the standard registry agreement” rings hollow. If PIR was truly committed to keeping prices “reasonably low”, it would have simply agreed to keep the current 10% annual cap on price increases.

Indeed, the so-called “standard registry agreement” is only standard for the new gTLD domain names that were bought and paid for by private interests and which therefore have none of the unique characteristics of a legacy TLD that has been home for organizations throughout the world, long before PIR was awarded the exclusive contract by ICANN.

Despite PIR’s claim that it is “constrained by the competitive market”, PIR is in fact the only source of .org domain names.  If the over 10 million .org registrants wish to continue using their existing domain names they are forced to pay whatever price PIR charges.  If a .org registrant does not pay whatever inflated fee is levied by PIR for the ability to continue using its domain name, the registrant faces the unacceptable prospect of both an expensive and disruptive rebranding and the abandonment of its .org domain name to be taken over by another user with unknown intentions, perhaps even to undermine the mission of the current non-profit registrant.  It is the unique and otherwise unconstrained control over the online homes built on .org domain names that makes price caps on .org domains so crucial in protecting the vibrant and vital community of non-profits that relies upon .org domain names.

Despite PIR claims that current registrants will have “the ability to lock in pricing at the then current rate for 10 years”, the actual proposed contract expressly leaves this up to particular registrars to offer such terms, in their discretion. Similarly, under the proposed contract, existing registrants are not entitled to receive notice of pending increases from PIR, but rather PIR only agrees to give notice of hikes in renewal pricing to registrars. Registrants may thereby be left exposed to dramatic price hikes on their existing domain names after their current term expires.

What has apparently been lost in the contract negotiation is the fact that ICANN is supposed to protect registrants and keep prices low, particularly in legacy TLDs where registrants have relied upon existing price constraints.

Legacy TLDs should not be treated like the new gTLDs nor priced like them nor managed like them.

For further reading, see:

“ICA Comment Letter Regarding Proposed Renewal of the .org Registry Agreement” (Submitted to ICANN, April 10, 2019)

“The economics of domain name prices” (Domain Name Wire, April 29, 2019)

“How ICANN uses the .Org registry to fund the Internet Society” (Domain Name Wire, April 24, 2019)

“The Spurious Justifications for Eliminating Price Caps on .org and Other Legacy Domains” (CircleID, April 23, 2019)