Month: July 2020

By: Sarah Kelly & Emma Ng

The Lanham Act clearly defines that generic terms cannot be registered as trademarks. 15 U.S.C. § 1051 et seq. However, an upcoming Supreme Court case will ask if an online business can create a protectable trademark by adding a generic top-level domain—like “.com”—to an otherwise generic term?

While the Coronavirus Pandemic has caused the Supreme Court to postpone all oral arguments, the trademark world is patiently awaiting its decision in U.S. Patent & Trademark Office v. Booking.com B.V., No. 19-46 (July 2019).

If a consumer wants to make a hotel reservation online, they will likely be directed to http://wwww.Booking.com, the website for a travel and hotel accommodations company. The online reservation service, based in Amsterdam, began using its name globally in 2006, and filed several trademark applications in 2011 and 2012 for “BOOKING.COM.” The company sought to register both the word mark and stylized versions of the mark. An examiner rejected the applications, finding the marks generic. The United States Patent and Trademark Office (“USPTO”) rejected Booking.com’s attempts to trademark its name, arguing that the common terms “booking” and “.com” do not combine to create a unique and protectable mark. Alternatively, the USPTO concluded, the company had not shown that the marks acquired a secondary meaning, and the marks were merely descriptive. The Trademark Trial and Appeal Board (“TTAB”) affirmed these rejections.

The company successfully challenged that decision in the lower courts. Booking.com appealed to the U.S. District for the Eastern District of Virginia, arguing that BOOKING.COM was eligible for protection because it was descriptive or suggestive. That court agreed.

The USPTO then appealed to the Fourth Circuit. The USPTO urged the court to find that adding a generic top-level domain (e.g., “.com”) to an otherwise generic term could never generate a non-generic mark. However, the circuit court affirmed the district court, relying in part on evidence showing consumers recognized BOOKING.COM as a brand rather than a generic service. Now it is in line to be decided by the Supreme Court when the pandemic calms down and normalcy returns. The Court must decide if a generic domain, like “.com”, added to an otherwise common term, like “booking,” can create a protectable trademark.

In its petition for certiorari, the USPTO argued that “.com” when added to “booking” was sufficient to make the term protectable as a trademark, “so long as the relevant public would understand the combination to refer to a specific business,” is contrary to “established principles of trademark law, and it conflicts with decisions of the Federal and Ninth Circuits, the only other courts of appeals that have considered the protectability of ‘generic.com’ terms.” Petition for Writ of Certiorari, U.S. Patent & Trademark Office v. Booking.com B.V., No. 19-46, 12.

The petition further noted that the Federal Circuit has found in previous cases that marks including “HOTELS.COM” and “LAWYERS.COM” were not protectable “based on highly similar evidence.” Id. at 8. The USPTO contended that certiorari should be granted to clarify the circuit split.

In opposition to the cert petition, Booking.com emphasized in its brief whether a mark is generic is a question of fact, and the factfinder had determined that BOOKING.COM was not generic. As demonstrated by the evidence presented in lower courts, consumers understood the mark to represent a brand, not a generic service. Whether the pieces of the mark are generic in isolation is not the question, the company argued; what matters is whether the mark, considered as a whole, has source significance. The company further contended that the USPTO had registered analogous marks before (e.g., STAPLES.COM, WEATHER.COM, ANCESTRY.COM).

In reply, petitioner USPTO discusses Goodyear’s India Rubber Glove Manufacturing Co. v. Goodyear Rubber Co., decided in 1888, in which the respondent could not successfully register the trademark for the term “Booking Company” or “Booking Inc.” Reply Brief for the Petitioners,
U.S. Patent & Trademark Office v. Booking.com B.V., No. 19-46, 1 (citing 128 U.S. 598 (1888)). The term “booking” was held to be generic for the services at issue and “no matter how strongly the public” associated with the brand, the respondent could not gain exclusive rights and prevent others from engaging in “‘similar business to use similar designations.’” Id. Therefore, “BOOKING.COM” should not receive trademark protection when “Booking Inc.” could not without further reasoning distinguishing the cases, which the respondents failed to provide. While Goodyear was decided before the adoption of the Lanham Act, neither the Supreme Court’s “subsequent decisions nor the Lanham Act’s adoption” has resulted in Goodyear being overruled. Id. at 4.

On March 16, the Supreme Court postponed oral argument in U.S. Patent and Trademark Office v. Booking.com and other cases scheduled for March, and “will examine the options for rescheduling those cases in due course.”

By: Ziyu Ma & Rita Xia

Films, like all cultural exports, are representative of a nation’s soft power. No industries have done better than Hollywood to effectively promote the U.S. soft power overseas. China, with its 1.4 billion people, is a prime market not only for Hollywood’s cultural exports but also for its generation of billions in revenue for U.S. businesses. China is currently the second largest box office market in the world and is projected to surpass the United States in 2020. The online film market is just as valuable with more than 800 million internet users in China, almost three times that in the United States.

However, the revenue also brings rampant piracy issues. Presently, many countries utilize a pre-agreed distribution system in which each form of exploitation of a theatrical film—such as a theatrical release, DVD release, or television screening—takes place in sequence with no overlap. This industry standard provides an “exclusive window of time” for each form of exploitation and is crucial to ensure that copyright owners or licensees are able to maximize their profits without having to compete with other media at the same time. However, this system is compromised when copies of the film become available to the public through other media without proper rights or licenses. With the advance of technology, film piracy on the internet is now the main challenge for U.S. businesses. In 2016, the United States suffered a $4.2 billion loss due to piracy in China, and that number is projected to reach $9.8 billion in 2022.

Policy barriers are a major factor behind the rampant film piracy in China. Despite China’s improved efforts in recent years to combat piracy, its regulations on foreign film imports and lack of effective penalties for copyright infringement continue to incentivize piracy activities. The Chinese government uses an annual import quota to control the influx of foreign entertainment products. Over the last two decades, China has eased up on the number of U.S. films imported into China, but the annual quota has not broken double digits.

China’s stringent censorship and review process create another hurdle for U.S. film businesses. All foreign films and TV shows must be approved by China’s State Administration of Press, Publication, Radio, Film and Television (SAPPRFT) before they can be shown or distributed in China, and the standard of review can often be arbitrary. In response, some U.S. studios made necessary edits or cuts in order to get the approval stamp. However, with public demand for original, uncensored Hollywood films remaining high despite and because of these barriers, people instead turn to illegal means.

Since its accession into the World Trade Organization (WTO), China has increased efforts to crack down on piracy, including starting initiatives by the National Copyright Administration of China (NCAC) to censure unlicensed films and TV shows. However, the level of piracy has not changed significantly in part due to loopholes created by low administrative penalties and virtually nonexistent criminal prosecutions for online piracy.

In light of the recent trade tensions between the U.S and China, there is pressure within the Chinese market to slow down the importation U.S. films. The halting of imports would be financial costly to U.S. businesses and will further limit Chinese consumers’ access to U.S. content. As data of prior years has shown, consumers will not have the patience to wait but will turn to illegal channels to watch their favorite films and TV shows.

There are a few options to mitigate the impending piracy challenges. Shifting to U.S.-China co-productions is a good short-term solution to bypass the import restriction, as these co-productions count as Chinese domestic films. Seeking intervention from the WTO is another possible solution. China’s current copyright enforcement and trade regulations are not compliant with its responsibilities as a member nation of the WTO. In fact, WTO has already created measures that can address China’s transgressions. Instead of threatening China with unilateral tariffs and inciting retaliations that will potentially harm U.S. businesses, the U.S. can allow WTO to step in and place more neutral pressure on China.

Nevertheless, long-term plans are needed to implement market and policy changes and to promote better public and judicial knowledge of copyright law. There should be discussions about the possibility of eliminating the foreign film import quota or at least drastically increasing the number of film imports allowed in the near future. Moreover, the Chinese government needs to improve its criminal and civil enforcement measures against infringers. China should also work to improve the judicial and public knowledge of copyright protection and enforcement, so more people will recognize and respect the value of intellectual property and learn to see piracy in a negative light.