After a week of landmark decisions from the Supreme court on issues ranging from religious education to LGBTQ+ rights, the high court issued another significant ruling, this time promoting trademark protection for trademarks with generic terms. By way of background, generic names can’t merit trademark protection. The USPTO refused to register Respondent Booking.com’s website of the same name since “Booking” is a generic term and. established that adding suffixes to generic names yields a generic combination. The District Court rejected this, holding “Booking.com” is not generic when the “.com” suffix is added to a generic name in a decision affirmed by the Court of Appeals. In an 8-1 decision (Justice Breyer dissenting). The Supreme Court affirmed the lower courts’ rulings holding the name “Booking.com” is not generic, meriting respondent’s trademark protection since the PTO’s proposed rule from Goodyear’s India Rubber Glove mfg. Co. vs Goodyear Rubber Co disagrees with its own practices and, rather, per the Lanaham Act, a trademark’s generic-ness lies in its understanding by consumers who do understand “Booking.com” as a separate entity.
In her court Opinion, Justice Ginsberg, dismissed the USPTO’s contention that “the combination of a generic word and ‘.com’ is generic” because consumers understand that “Booking.com” does not refer to the whole class of online hotel-reservation services. If this were true, Ginsberg argues, “consumers would understand “Travelocity- another such service- to be a “booking.com. [The Court] might similarly expect that a consumer, searching for a trusted source of online hotel searching for a trusted source of online hotel-reservation services, could ask a frequent traveler to name her favorite “booking.com. Consumers do not in fact perceive the term this way”
Ginsberg also dismissed the PTO’s sweeping rule resulting from Goodyear’s India Rubber Glove mfg. Co. vs Goodyear Rubber Co. In that case., the court held that adding the word ‘company supplied no protectable meaning”. However, The Goodyear’s India Rubber Glove mfg. Co. vs Goodyear Rubber Co decision occurred before the Lanham act with its focus on consumer perceptions as such it is incompatible with the spirit of that law. Also, the “company”, dealt with in that case denotes any group that forms to deal in such goods. Here, the name to the right of a .com suffix denotes one unique domain name. Hypothetically can be any number of “Booking companies” but there can only ever be one “Booking.com”. Finally, the USTPTO own past practices break the Goodyear’s India Rubber Glove mfg. Co. vs Goodyear Rubber rule, as registration of such domain names “Art.com” and “Dating.com” attest.
Licensing a trademark makes sense for many companies in order to broaden a trademark’s exposure and enter into financially lucrative relationships for both the trademark owner and licensee. However, there are some common pitfalls which are easily avoidable, yet can create big problems for trademark owners if not addressed early on in the licensing process.
Canadian law provides that use of a trademark by a licensee has the same effect as that of the trademark owner in most circumstances. Section 50 of the Canadian Trademark Act lends protection to trademark owners, but only upon compliance with the requirements of the law. Licensees must comply as if they are the trademark owners in order to continue protection of the subject trademark.
Some of the important requirements of the law follow.
Section 50 requires that trademark owners exercise control, either directly or indirectly, over the character or quality of the goods or services at issue. Trademark licensing agreements should specifically state
(1) that the licensee shall comply with all standards, specifications and/or instructions given by the trademark owner;
(2) that the trademark owner has a right to inspect any all goods and/or services offered by the licensee in order to ensure compliance with standards of use;
(3) if necessary, that employees of licensee must undergo mandatory training offered by trademark owner;
(4) a prohibition clause against sub-licensing or a clause stating that any sub-licensee is subject to the same requirements set forth in the licensing agreement;
(5) that the trademark owner has the right to terminate the agreement, should the licensee not comply with the requirements set forth in the agreement.
Lastly, a trademark owner must exercise its quality-control rights as set forth in the agreement in order to ensure that the good or services offered under the subject mark are up to par. It is always advisable for trademark owners to consult with an intellectual property attorney before entering into any type of licensing arrangement in order to maintain proper protection of the subject mark.
China, having one of the largest trademark offices in the world, has recently passed ground-breaking trademark legislation that will now give trademark owners more teeth when enforcing their rights and send the message that China will no longer tolerate trademark violations.
The new law provisions, with their steep penalties, are designed to deter potential infringers. Some highlights of the new laws include an increase of six (6) times the previous maximum statutory damages award (from ~ $82,000 to now ~ $500,000); treble damages for acts done in bad faith and an increase in administrative penalties allowing for, inter alia, maximum fines up to 500% of profits obtained illegally.
The new laws also significantly expedite the examination process and introduce a streamlined opposition procedure. Implementation Regulations are currently in the works as China’s Standing Committee of the National People’s Congress seeks to draft regulations which will address the concerns of the industry.
Stay tuned for more as the methods for enforcing these new laws enter the trademark arena…
Beth Anne Powers, Associate
Ryder, Lu, Mazzeo & Konieczny LLC