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09 Jul 2020

Trade mark rights in generic terms: does the US booking.com decision open the door in the U.S. or Australia?

By Brett Doyle and Dunja Poljak

A recent U.S. case has some wondering if this opens the door to widespread generic trade marks, but both Australia and the U.S. still have clear laws which set the bar high.

All jurisdictions, including Australia, have restrictions on granting monopoly rights in descriptive or non-distinctive terms and Anglo-Australia jurisprudence has, for more than a century, guarded against wealthy traders monopolising the English language to the disadvantage of other traders.

The U.S. Patent and Trademarks Office (USPTO) has fought, unsuccessfully, all the way to the U.S. Supreme Court to prevent registration of booking.com as a trade mark. The USPTO feared that the decisions of two lower courts would lead to a proliferation of registrations giving their owners undesirable monopolies in descriptive terms, when merely combined with non-distinctive material such as .com or other a top-level domain suffixes. The Supreme Court affirmed the decisions of both the courts below that had reversed the USPTO refusal to register on the basis that "booking.com" was a generic term and so not registrable under U.S. law.

Similar concerns to the USPTO's about granting monopoly rights to ordinary terms have also been expressed in recent years by the Federal Court of Australia. A close analysis of the positon in the U.S. and Australia shows that, despite legislative differences, rights will not be given easily in such generic or descriptive terms – but legitimate claims to trade marks consisting of urls, such as booking.com and realestate.com.au, will be granted where appropriate.  

The U.S. position on generic trade marks

Trade marks are categorised in the U.S. according to a sliding scale:

generic » descriptive » suggestive » arbitrary » fanciful.

U.S. trade mark law prohibits trade mark registration for generic terms and descriptive marks are only registrable if they have acquired recognition as a brand name, that is, they have a secondary meaning indicating trade origin.

The Supreme Court rejected a sweeping rule proposed by the USPTO that a generic word when combined with a top level domain name, such as .com, resulted in a combination that is also generic. It held that whether trade marks such as booking.com are generic must be tested against consumer perceptions. Evidence established a 74.8% recognition of booking.com as a trade mark/badge of origin. Accordingly, it held registration should be granted.

The Australian position: different analysis, same result

Despite legislative differences, the outcome in Australia would be the same. In Australia, unlike the U.S., there is no longer any category of marks that is per se unregistrable. All marks must however be "capable of distinguishing".

There is no sliding scale categorisation of marks but those that are purely descriptive ("not to any extent inherently adapted to distinguish") face the toughest hurdles. Adding ".com" to such words does not, according to Australian practice, increase their distinctive capacity. BOOKING.COM was registered in Australia (Registration 1660140) after evidence showed it to be distinctive in fact at the date of lodgement.

Some judicial concerns – the realestate.com.au case

Justice Bromberg in REA Group Ltd v Real Estate 1 Ltd [2013] FCA 559 expressed concerns about granting monopoly rights in descriptive terms, such as the words "real estate".

In that case, registrations for Real Estate and Real Commercial prevented use by a competitor of "realestate1.com.au" and "real1commercial.com.au" because they were deceptively similar to the registrations and were being used as trade marks, that is, as indications of trade origin.

Justice Bromberg said

"It is troubling that terms that are highly descriptive of a particular area of commerce and which provide significant commercial advantage should not be readily available for use by all who seek to participate in that commerce. However, in the absence of a successful challenge to the registration of REA’s realestate.com.au trade marks, whilst that may be troubling, REA is nevertheless entitled to the protection of the monopoly which has been conferred upon it."

Despite these judicial misgivings, REA Group Ltd has subsequently achieved registration of realestate.com.au (without any devices) – Registration 1924475, which was regarded as a mark "having no inherent adaption to distinguish") but was shown to be distinctive in fact by virtue of use. This is the same outcome as achieved for booking.com in both Australia and the USA. 

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Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this communication. Persons listed may not be admitted in all States and Territories.