At a discussion
in a seminar some years back, there was an opinion increasingly felt that
intellectual property rights (IPRs) were becoming increasingly technical. By
its very characteristics, patents were technical, copyrights were technical in
the digital days, while trade secrets too were technical more often than not. What
was perhaps not technical was the trade marks. Yet, the opinion was veering towards
trademarks would increasingly involve a technical components given the rise of
dotcoms. This discussion came to the mind as one read the judgment of the US
Supreme Court on the trademark registrations and the conditions associated with
them.
Trademarks offer
distinctiveness to the products, firms, brands and services. They differentiate
the offerings of one producer from another. In a universe predominated by
differentiation, these are the tools to distinguish one offering from another
while conveying what is different about them. At certain level, they seek to
enable a firm facilitate customers avoid adverse selection. For instance, the
trademarks of Tata or Wipro or many other firms would signal the customers, it
is a product offered by Tata or Wipro thus giving a sort of positivity to the
customer. The customers are keen to avoid adverse selection when they are
unable to distinguish products from renowned firms with the all and sundry.
Trademarks through their distinctiveness seek to resolve this dilemma.
Yet, the
question remains on what can be trademarked and what cannot be. A Tata
trademark for instance would suggest the product of the Tatas and make it clear
to the customers of the same. There is a uniqueness associated with the same.
ITC cigarettes would again convey a sort of brand to the customers. Yet the
word car cannot be trademarked by any firm since it does not convey any unique
characteristic but merely suggests or describes a generic class of goods.
Similarly retail per se would indicate a generic class of a distribution
service than anything else. Often, one does find a trademark becoming a generic
in itself conveying an act that has come to symbolize with that mark. Instances
like Google, Xerox are well known in this regard. However, there continue to
arise disputes on what constitutes generics and what is not.
In the US, there
was a company named booking.com. This firm was engaged in travel reservations
among other similar activities. They applied for a trademark for booking.com.
The US Patent and Trademark Office (PTO) rejected their claims. Their contention
was the word booking was generic. To add, the suffix .com was also generic in
the domain name circuit. Hence when two generics combine, they do not create
any uniqueness but remain generic. The contention of the firm was while the
terms taken separately were generic, the combination was a descriptive and thus
generates a secondary meaning that is unique.
In trademarks,
the distinctiveness for word marks are classified on an increasing scale. At the
lower end are the generics. They are followed by descriptive. The third category
is the suggestive. The fourth and the fifth are arbitrary and fanciful. A
suggestive example would be Tide detergent. The fanciful terms include Kodak or
Google. The arbitrary would be Camel or Tiger Brand. In each country, the
trademarks are maintained in a principal register. The more distinctive mark is
the more easily it finds acceptance as a trademark and thus an entry in the
register. For the last three, it is relatively easy as long as they don’t conflict
with something else. Implied in the eligibility is the mark’s capacity to distinguish
goods in commerce. The descriptive can be added to the register but subject to
acquiring of a secondary meaning. In other words, it is not a natural distinctiveness,
but an acquired distinctiveness. Descriptive is not per se automatically
eligible for registration but subject to underlying conditions. The booking.com
was more of a descriptive trademark which made PTO reject the same.
The litigation
that followed ensured the acceptance of claims of booking.com and made its way
to the US Supreme Court thanks to the appeal by the PTO. The US Supreme Court
upheld the contention of booking.com thus holding it eligible for being
registered as a trademark. In the US Supreme Court’s contention, the trademark
did acquire a unique characteristic of its own thus being a valid trademark. Implied
in the acquired distinctiveness is the gaining certain significance in the minds
of the consumers about the goods offerings. There must be no doubt in the minds
of the consumer when they see the word mark, the offerings belong to a certain organization
or a firm. The Supreme Court had to validate whether the mark booking.com was
generic or otherwise. There was no doubt taken in isolation, the terms were
generic. Yet taken together, the term did not convey the generic meaning. As the
Supreme Court pointed out, the customers would not ask each other which
platform did they do booking.com but would perhaps ask which online site did
they do their bookings for travel and similar reservations. Therefore, the
booking.com did not result in reference to generic class goods or services
being offered but to a service offered by a unique firm.
Moreover, in the
domain name space, the first mover advantage was significant given it conferred
a monopoly on the same. This contention was uncontested by the PTO in its
positions at all legal levels. The courts held that the booking.com did not
refer to the genus but to set of services offered by a particular brand. The brand
booking.com itself offered a differentiation feature that allowed it to
distinguish itself from the rest of the online platforms that were into travel
and hotel reservations. The PTO had contended every generic combination was to
be generic absent of exceptional circumstances. While there could be a merit in
the same, the court rejected it. There was distinct possibility that the
consumers would choose to go the booking.com primarily because of its generic
name. As one typed the search engine for the key words booking, there is a
possibility, the firm might end up at the top of the search, thus in a way
resulting in an advantage offered by choosing a generic trademark. But this was
sought to be rejected by the court.
In some ways,
these are the beginning of the numerous of IP disputes that might emerge in the
domain name space and the associated branding. The Supreme Court ruling sets
the trendsetter for adjudication future disputes. A detailed judgment of the
court is available here.
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