No Room at the USPTO Inn for Hotels.com
Hotels.com cannot obtain a federal trademark registration in its name, says a federal court in California. The court's decision, which was issued last month, is a great lesson about what words can and, more importantly, cannot be registered as a federal trademark.
Most people think that virtually any word or phrase can be registered as a trademark, so long as the word or phrase is used in conjunction with a business. Those people are wrong. There are rules to be followed in the trademark process, and I'm about to describe some of the more important rules to you now. At the same time, I'll show you why Hotels.com lost its bid to get its name registered as a federal trademark.
This may save you a great deal of heartache (and money), so pay attention if you're trying to come up with a new name for your product or service....
It's All About the Categories
First, you need to understand that trademarks fall into one of four categories: Generic, Descriptive, Suggestive, and Arbitrary/Fanciful. Your odds of obtaining a federal trademark registration in a proposed word or phrase change dramatically depending on the category in which your word or phrase falls.
Generic marks can not be registered. Period. No exceptions. Game over. (Get the point?) A generic mark is usually identified as consisting of the common names of the goods or services being offered. Examples would be "Cars" for the sale or repair of automobiles, or "Trees" for the production, maintenance or sale of trees.
Descriptive marks can not be registered unless they acquire "secondary meaning". (Yes, I will define "secondary meaning" for you in a moment....be patient). Descriptive marks are marks that describe the goods or services being offered. Examples would be "All Bran" for a cereal containing bran, or "Best Computer Services" for a company that offered computer programming or consulting services, or "Tasty" for a food or drink product.
Descriptive marks may be registered if the public comes to recognize the mark as belonging to a particular producer or company. This recognition (called "secondary meaning") can be used as a basis to register a descriptive mark. Want a good example? Try this: "There are some things money can't buy. For everything else, there's....." (Do I even need to finish the sentence??) A New York federal court, back in 2004, held that MasterCard held trademark rights in that phrase because the phrase acquired secondary meaning.
Suggestive marks may be registered. These marks suggest, but don't describe, a company's goods or services. A good example of a suggestive mark? Microsoft. Microsoft makes software for microcomputers (thus the "micro" and "soft" combination).. But the word "Microsoft" doesn't really describe the company's goods or services....it merely suggests a connection.
Arbitrary / fanciful marks are the best kind of marks to have, and are easily capable of being registered. These marks usually consist of words or phrases that have no apparent connection with the particular products or services being offered. Examples are abundant: Kodak (for film). Exxon (for gas). Xerox (for duplication equipment). Clorox (for bleach).
Ok, Enough Law. How Come Hotels.com Lost?
The US Patent and Trademark Office ("USPTO") held that "Hotels.com" was a generic mark (and NOW you know what that means).
Relying on dictionary definitions and website searches, the USPTO argued that the word "hotel" meant "temporary lodging", and that the website "Hotels.com" was merely a portal for those seeking temporary lodging in various cities worldwide. (Essentially, the USPTO's argument was that "Hotels.com is generic 'cause that's what the dictionary says.")
Hotels.com, on the other hand, argued that the ".com" suffix sufficiently negated the generic nature of the word "hotel." Hotels.com also argued that its trademark was not generic since the general public recognizes the phrase "Hotels.com" as being associated with its famous website, www.hotels.com. (This was essentially a "secondary meaning" argument—and now you know what THAT means too.)
The US Trademark Trial and Appeals Board ("TTAB"), which is the group that decides disputes between the USPTO and frustrated applicants, agreed with the USPTO. The federal court agreed with the TTAB. And, as they say, that was that.
What Could Hotels.com Have Done Differently?
Nothing. Or perhaps something. Well, let me put it this way: Hotels.com is wildly successful, and has grown into a huge company that (deservedly) enjoys a great deal of fame. It should not, and with all certainty will not, change its name merely because the USPTO, TTAB and federal court all said that it can't obtain a federal trademark registration in its name.
But I think the ruling could have gone the other way if Hotels.com modified its strategy just slightly. You see, Hotels.com tried to prove that its name was not generic by introducing the results of a public survey in which people were asked whether or not the name "Hotels.com" was perceived as being a "brand name." (The argument, I assume, was that if a sufficient number of people considered the mark to be a "brand name" instead of a generic description, then the mark could not properly be labeled "generic.")
But here's the catch: they failed to ask survey participants whether or not the name "Hotels.com" was actually connected to the famous website of the same name. (In other words, they asked people whether the name "Hotels.com" could be a brand name, instead of asking whether they recognize it as actually being connected to the website.) In short, I think the survey missed the mark—and the court felt the same way.
So How Does That Help My Company?
Here are the lessons that you can glean from the Hotels.com case (and the information I've imparted above):
1. Avoid generic marks. If your company's mark consists of one or more generic words that match your company's goods or services, you won't be able to acquire trademark rights in the mark.
2. Generally, if your company's mark merely describes your company's goods or services, you won't be able to acquire trademark rights in the mark. Perhaps you can argue "secondary meaning", but that's a tough—and expensive—road to travel.
Generic or descriptive marks may sound cool and enticing, but they often can't be protected or enforced.
3. Use suggestive or arbitrary/fanciful marks. They're the strongest kinds of marks you can have.
4. Don't assume that because your mark is well-known that you can avoid falling into the "generic trademark" trap. After all, if Hotels.com wasn't able to successfully navigate out of the "generic trademark" arena, what are the odds that your company will be able to do so?
A final word of caution: I strongly recommend that you consult with an attorney before your company chooses or uses a new trademark. Marks that look suggestive may very well be descriptive. Marks that appear to be novel may very well be in use by another company. These issues, and others, are very complex and usually can't be resolved without legal counsel.
Most people think that virtually any word or phrase can be registered as a trademark, so long as the word or phrase is used in conjunction with a business. Those people are wrong. There are rules to be followed in the trademark process, and I'm about to describe some of the more important rules to you now. At the same time, I'll show you why Hotels.com lost its bid to get its name registered as a federal trademark.
This may save you a great deal of heartache (and money), so pay attention if you're trying to come up with a new name for your product or service....
It's All About the Categories
First, you need to understand that trademarks fall into one of four categories: Generic, Descriptive, Suggestive, and Arbitrary/Fanciful. Your odds of obtaining a federal trademark registration in a proposed word or phrase change dramatically depending on the category in which your word or phrase falls.
Generic marks can not be registered. Period. No exceptions. Game over. (Get the point?) A generic mark is usually identified as consisting of the common names of the goods or services being offered. Examples would be "Cars" for the sale or repair of automobiles, or "Trees" for the production, maintenance or sale of trees.
Descriptive marks can not be registered unless they acquire "secondary meaning". (Yes, I will define "secondary meaning" for you in a moment....be patient). Descriptive marks are marks that describe the goods or services being offered. Examples would be "All Bran" for a cereal containing bran, or "Best Computer Services" for a company that offered computer programming or consulting services, or "Tasty" for a food or drink product.
Descriptive marks may be registered if the public comes to recognize the mark as belonging to a particular producer or company. This recognition (called "secondary meaning") can be used as a basis to register a descriptive mark. Want a good example? Try this: "There are some things money can't buy. For everything else, there's....." (Do I even need to finish the sentence??) A New York federal court, back in 2004, held that MasterCard held trademark rights in that phrase because the phrase acquired secondary meaning.
Suggestive marks may be registered. These marks suggest, but don't describe, a company's goods or services. A good example of a suggestive mark? Microsoft. Microsoft makes software for microcomputers (thus the "micro" and "soft" combination).. But the word "Microsoft" doesn't really describe the company's goods or services....it merely suggests a connection.
Arbitrary / fanciful marks are the best kind of marks to have, and are easily capable of being registered. These marks usually consist of words or phrases that have no apparent connection with the particular products or services being offered. Examples are abundant: Kodak (for film). Exxon (for gas). Xerox (for duplication equipment). Clorox (for bleach).
Ok, Enough Law. How Come Hotels.com Lost?
The US Patent and Trademark Office ("USPTO") held that "Hotels.com" was a generic mark (and NOW you know what that means).
Relying on dictionary definitions and website searches, the USPTO argued that the word "hotel" meant "temporary lodging", and that the website "Hotels.com" was merely a portal for those seeking temporary lodging in various cities worldwide. (Essentially, the USPTO's argument was that "Hotels.com is generic 'cause that's what the dictionary says.")
Hotels.com, on the other hand, argued that the ".com" suffix sufficiently negated the generic nature of the word "hotel." Hotels.com also argued that its trademark was not generic since the general public recognizes the phrase "Hotels.com" as being associated with its famous website, www.hotels.com. (This was essentially a "secondary meaning" argument—and now you know what THAT means too.)
The US Trademark Trial and Appeals Board ("TTAB"), which is the group that decides disputes between the USPTO and frustrated applicants, agreed with the USPTO. The federal court agreed with the TTAB. And, as they say, that was that.
What Could Hotels.com Have Done Differently?
Nothing. Or perhaps something. Well, let me put it this way: Hotels.com is wildly successful, and has grown into a huge company that (deservedly) enjoys a great deal of fame. It should not, and with all certainty will not, change its name merely because the USPTO, TTAB and federal court all said that it can't obtain a federal trademark registration in its name.
But I think the ruling could have gone the other way if Hotels.com modified its strategy just slightly. You see, Hotels.com tried to prove that its name was not generic by introducing the results of a public survey in which people were asked whether or not the name "Hotels.com" was perceived as being a "brand name." (The argument, I assume, was that if a sufficient number of people considered the mark to be a "brand name" instead of a generic description, then the mark could not properly be labeled "generic.")
But here's the catch: they failed to ask survey participants whether or not the name "Hotels.com" was actually connected to the famous website of the same name. (In other words, they asked people whether the name "Hotels.com" could be a brand name, instead of asking whether they recognize it as actually being connected to the website.) In short, I think the survey missed the mark—and the court felt the same way.
So How Does That Help My Company?
Here are the lessons that you can glean from the Hotels.com case (and the information I've imparted above):
1. Avoid generic marks. If your company's mark consists of one or more generic words that match your company's goods or services, you won't be able to acquire trademark rights in the mark.
2. Generally, if your company's mark merely describes your company's goods or services, you won't be able to acquire trademark rights in the mark. Perhaps you can argue "secondary meaning", but that's a tough—and expensive—road to travel.
Generic or descriptive marks may sound cool and enticing, but they often can't be protected or enforced.
3. Use suggestive or arbitrary/fanciful marks. They're the strongest kinds of marks you can have.
4. Don't assume that because your mark is well-known that you can avoid falling into the "generic trademark" trap. After all, if Hotels.com wasn't able to successfully navigate out of the "generic trademark" arena, what are the odds that your company will be able to do so?
A final word of caution: I strongly recommend that you consult with an attorney before your company chooses or uses a new trademark. Marks that look suggestive may very well be descriptive. Marks that appear to be novel may very well be in use by another company. These issues, and others, are very complex and usually can't be resolved without legal counsel.
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