Federal Circuit Finds Term Hotels.com is Generic despite Evidence of Secondary Meaning

In In Re Hotels.com L.P., 91 USPQ2d 1532 (Fed. Cir 2009), the Applicant, Hotels.com, L.P., appealed the Trademark Trial and Appeal Board’s (TTAB) refusal to register the service mark HOTELS.COM (Serial No. 78/277,681) in International Class 43 for “providing information for others about temporary lodging; travel agency services, namely, making reservations and bookings for temporary lodging for others by means of telephone and the global computer network.”  The TTAB refused registration on the ground that the mark is a generic term for such services.  The Federal Circuit affirmed.

The TTAB explained that the word “hotels” “identifies the central focus of the information and reservation services provided on applicant’s website,” and concluded that the term HOTELS.COM, consisting of nothing more than a term that names that central focus of the services, is generic for the services themselves.” The TTAB determined that the addition of the dot-com domain designation does not impart registerability to a generic term.

The Federal Circuit began by noting that it has plenary review to the legal conclusions of the TTAB and reviews the factual findings of the TTAB to determine whether such are “arbitrary, capricious, or unsupported by substantial evidence.” The determination of whether a term is generic, and therefore not registerable, is a question of fact, and the Patent and Trademark Office has the burden of establishing that the proposed mark is generic by clear and convincing evidence.  The Federal Circuit further noted that generic terms cannot be registered as a trademark because such terms are incapable of indicating the source of the goods or services.  “Whether a term is entitled to trademark status turns on how the mark is understood by the purchasing public.” In re Montrachet S.A., 878 F.2d 375, 376 (Fed. Cir. 1989). “In the generic-descriptive-suggestive-arbitrary-fanciful continuum of words and their usage as marks of trade, there is no fixed boundary separating the categories[.]” Slip at page 5, citing In re K-T Zoe Furniture, Inc., 16 F.3d 390, 393 (Fed. Cir. 1994) “[D]escriptive terms describe a thing, while generic terms name the thing[.]”Id., (quoting 1 McCarthy, S12.05[1] (3d ed. 1992).  Descriptive terms may acquire distinctiveness and serve as a trademark, while a generic term may not.

The applicant argued that the TTAB’s approach was fundamentally flawed because the TTAB analyzed the components “hotels” and “.com” instead of the mark in its entirety, HOTELS.COM. The applicant argued that HOTELS.COM is not a generic term for a hotel but is used to indicate an information source and travel agency.  The applicant further argued that prospective customers perceive the mark as HOTELS.COM with the dot-com domain name, which is a significant aspect of the mark.

The TTAB responded with various definitions of “hotel,” “temporary lodging”, and “.com” and concluded that “hotels” and “.com” simply name the services provided by the applicant in association with the mark HOTELS.COM.  The TTAB further relied on such sites as http://www.all-hotels.com, http://www.web-hotels.com, http://www.dealsonhotels.com, http://www.123-hotels.com, http://www.my-discount-hotels.com, http://www.choicehotels.com, http://www.hotelstravel.com, and http://www.hotelres.com to show that such domains are referred to as “hotel information sites” and “hotel reservation sites,” similar to the applicant’s http://www.hotels.com. 

The Federal Circuit found no error with the TTAB’s analysis and stated that “the generic term ‘hotels’ did not lose its generic character by placement in the domain name HOTELS.COM.”  Further, the Federal Circuit found that the TTAB’s assertion that the other uses of “hotels” in domain names demonstrate a competitive need for others to use “hotels” in their own domain names and trademarks to further support a prima facie case of genericness.  Because the word “hotels” names a key aspect of the applicant’s services, the TTAB concluded that HOTELS.COM is properly viewed in the same way and having the same meaning as the word “hotels” by itself. 

In rebuttal, the applicant provided sixty-four declarations from customers, vendors, and competitors, each of whom stated that “the term HOTELS.COM is not the common, generic name of any product, service, or field of study.”  Further, the applicant submitted a survey entitled “Survey to Determine Whether Consumers Perceive ‘HOTELS.COM’ as a Brand Name or Generic Name.” The survey was a conducted by a independent party and was a “national probability double blind telephone survey… conducted employing the ‘Teflon’ methodology among 277 males and females age 18 and over in the continental United States who have stayed at a hotel or motel in the past 12 months or plan to in the next 12 months.” The study concluded that 76% of the respondents regarded HOTELS.COM as a brand name for a business that makes hotel reservations and provides information about hotels.

The TTAB gave no weight to the declarations because each included the same words and provided no explanation of the declarants’ conclusions or the declarants’ views on how the term HOTELS.COM is perceived by the public.  The Federal Circuit recognized that the total rejection of the declarations appeared unwarranted; but, in the context of the entire record, the declarations do not negate the TTAB’s ultimate conclusion.  The TTAB was skeptical of the survey results because they feared that consumers may automatically equate a domain name with a brand name and that the survey design did not adequately reflect the difference between the two. 

The Federal Circuit concluded that the TTAB had satisfied its evidentiary burden by demonstrating that the separate terms “hotel” and “.com” in combination have a meaning identical to the common meaning of the separate components; and, the TTAB’s finding that HOTELS.COM was generic was supported by substantial evidence.  Therefore, the refusal to register the applicant’s mark was affirmed. 

Significance to Trademark Owners

It should be noted that the discounted evidence in In Re Hotels.com did not ultimately affect the outcome of this case.  This is because the TTAB had already determined that the mark HOTELS.COM was generic, and no amount of acquired distinctiveness can save a mark once it has been determined to be generic.  The TTAB specifically noted that if their determination of genericness was overruled, the evidence of acquired distinctiveness was sufficient to allow the mark HOTELS.COM to be registerable.  As such, when selecting a mark, it is important to understand that purely generic definitions will not be available for protection, no matter the customer recognition.

In Re Hotels.com also stands for the proposition that adding a dot-com to a generic term will not render the resultant domain name registerable as a trademark.  Courts will likely view the generic term and the dot-com portion separately to find that the entire asserted mark is generic and therefore not registerable as a trademark.  Thus, when selecting a domain name for a start-up business, the trademark aspects of the analysis should emphasize the source indentifying properties of the mark independent of the dot-com portion.

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