REGISTRATION, NOT MERELY APPLICATION, REQUIRED FOR MOST U.S. COPYRIGHT SUITS
On March 4, 2019, the U.S. Supreme Court ruled that registration of a copyright, not merely an application for such registration, is required for most U.S. copyright infringement suits. Fourth Estate Public Benefit Corp. v. Wall-Street .Com, LLC, ___ U.S. ___, 139 S. Ct. 881 (2019). The court granted certiorari in the case to resolve a circuit split under which some U.S. Courts of Appeal, including in the Ninth Circuit, which has jurisdiction over the movie and music business in Hollywood, had permitted such suits based only applications for registration, but others had not.
Fourth Estate is a news organization that produces online journalism. The company had a license agreement with Wall-Street.Com whereby Wall-Street.Com could post articles provided by Fourth Estate. Although the agreement required Wall-Street.Com to remove all such articles when the agreement terminated, Wall-Street.com did not do so. Fourth Estate applied to register its copyrights in the articles in question and sued Wall-Street.Com for infringement while the applications were still pending. The Eleventh Circuit dismissed the case, noting that the Copyright Act’s requirement for copyright registration had not been met.
Section 411(a) of the Copyright Act of 1976, 17 U.S.C. § 411(a), states that “no civil action for infringement of the copyright in any United States work shall be instituted until preregistration or registration of the copyright claim has been made in accordance with this title.” Because the vast majority of copyright applications are granted, with the effective date of registration being the application filing date, some courts construed the language of Section 411(a) to mean that “registration of [a] copyright claim has been made” when a complete application has been filed with the U.S. Copyright Office and that therefore a complete application is sufficient for filing a copyright infringement suit.
The Supreme Court disagreed. In a unanimous opinion, Justice Ginsburg wrote that adopting the “application approach” over the “registration approach” would make certain provisions of the Copyright Act meaningless. For example, she noted that the second sentence of Section 411(a) provides that when “registration has been refused, the applicant is entitled to institute a civil action for infringement if notice thereof, with a copy of the complaint, is served on the Register of Copyrights.” If “application alone sufficed to ‘ma[ke]’ registration, §411(a)’s second sentence—allowing suit upon refusal of registration—would be superfluous,” she said.
Moreover, the application approach requires “the implausible assumption that Congress gave ‘registration’ different meanings in consecutive, related sentences within a single statutory provision.” In the first sentence of Section 411(a), “registration” would mean the act of filing an application, but in the second sentence “registration” would entail the Register’s review of an application. “We resist this improbable construction,” Justice Ginsburg wrote, citing Mid-Con Freight Systems, Inc. v. Michigan Public Service Commission, 545 U.S. 440, 448 (2005) (declining to read “the same words” in consecutive sentences as “refer[ring] to something totally different”).
The court also cited the third sentence of Section 411(a), which allows the Register to weigh in on the issue of registerability, an option that would be meaningless under the application approach, and the provisions of Section 410, 17 U.S.C. § 410, that deal with the refusal of registration as an act separate from and following the act of application and with the effective date of registration being the date of application but only if an application actually matures into a registration.
The court also said that the preregistration option under Section 408(f), 17 U.S.C. § 408(f), “would have little utility if a completed application constituted registration.” Preregistration allows the author of a work vulnerable to predistribution infringement—a movie or music, for example—to enforce copyrights before registration or refusal of registration. But “[a] copyright owner who fears prepublication infringement would have no reason to apply for preregistration, however, if she could instead simply complete an application for registration and immediately commence an infringement suit” (citing TRW Inc. v. Andrews, 534 U.S. 19, 29 (2001)) (rejecting an interpretation that “would in practical effect render [a provision] superfluous in all but the most unusual circumstances”). Finally, Justice Ginsburg noted that “[t]ime and again . . . Congress has maintained registration as prerequisite to suit, and rejected proposals that would have eliminated registration or tied it to the copyright claimant’s application instead of the Register’s action.”
In addition to its other arguments for the application approach, Fourth Estate argued that “a copyright owner may lose the ability to enforce her rights if the Copyright Act’s three-year statute of limitations runs out before the Copyright Office acts on her application for registration.” In response the court noted that the average processing time for a copyright application is seven months and a faster procedure is available in anticipation of litigation. Perhaps the ideal processing time would be weeks as it was in 1956 and not months as it is today, Justice Ginsburg said, but “[d]elays in Copyright Office processing of applications, it appears, are attributable, in large measure, to staffing and budgetary shortages that Congress can alleviate, but courts cannot cure.”
Thus, the court concluded that “‘registration . . . has been made’ within the meaning of 17 U. S. C. §411(a) not when an application for registration is filed, but when the Register has registered a copyright after examining a properly filed application.” Accordingly, the court affirmed the judgment of the Court of Appeals for the Eleventh Circuit that registration was a prerequisite for Fourth Estate’s copyright infringement suit.
APPELLATE COURT AGREES THAT BOOKING.COM IS NOT GENERIC
The U.S. Court of Appeals for the Fourth Circuit recently affirmed that the mark BOOKING.COM is not generic for services in International Class 43, including online hotel reservation services. Booking.com B.V. v. United States Patent & Trademark Office, 915 F.3d 171 (4th Cir. 2019). The Trademark Trial and Appeal Board (TTAB) of the U.S. Patent and Trademark Office (USPTO) had taken the position that the mark is generic, but the district court, after weighing a fuller evidentiary record, concluded the mark is descriptive and therefore registerable upon a showing of secondary meaning.
Booking.com B.V. (Applicant), which operates a website for booking travel and hotel accommodations, filed four trademark applications with the USPTO to register word and stylized versions of its mark. The USPTO rejected all four applications, finding that the marks were either generic or merely descriptive and that Applicant had not shown that the marks had acquired secondary meaning. Applicant appealed to the TTAB, which also rejected all four applications, and Applicant then appealed to the U.S. District Court for the Eastern District of Virginia.
The district court held that although “booking” is a generic term for Applicant’s services, BOOKING.COM is nevertheless a descriptive mark. The court further held that Applicant had shown that its mark has acquired secondary meaning and therefore is registerable, at least with respect to hotel reservation services in Class 43. The court remanded the proceedings with respect to travel, ticket, and tourism services in Class 39.
The USPTO filed two motions, one that the court also remand the two trademark applications in Class 43 and another that, pursuant to 15 U.S.C. § 107(b)(3), Applicant pay almost $77,000 of the USPTO’s expenses incurred defending the action. The court denied the motion for remand but granted the motion for expenses, and both parties appealed to the Fourth Circuit.
The appellate court said the “question of whether a proposed mark is generic is a question of fact that is subject to deferential review” (citing Swatch AG v. Beehive Wholesale, LLC, 739 F.3d 150, 155 (4th Cir. 2014)). Because the USPTO conceded that if BOOKING.COM is descriptive, the district court’s finding of secondary meaning was warranted, the limited question on appeal was whether the district court erred in finding BOOKING.COM not to be generic.
First, the appellate court said that although it had not previously addressed the issue, it agreed with the U.S. Court of Appeals for the Federal Circuit “that in registration proceedings, the USPTO ‘always bears the burden’ of establishing that a proposed mark is generic” (citing In re Cordua Restaurants, Inc., 823 F.3d 594, 600 (Fed. Cir. 2016)). Next, the court discussed the three-step test for determining genericness: “(1) identify the class of product or service to which use of the mark is relevant; (2) identify the relevant consuming public; and (3) determine whether the primary significance of the mark to the relevant public is as an indication of the nature of the class of the product or services to which the mark relates, which suggests that it is generic, or an indication of the source or brand, which suggests that it is not generic” (citing Glover v. Ampak, Inc., 74 F.3d 57, 59 (4th Cir. 1996)).
In this case, the court said, neither party disputed that the mark “is used to identify the class or product to which it belongs—here, making hotel reservations for others.” And neither party disputed that “the relevant purchasing public consists of consumers who use hotel reservation services offered via the internet or in person.” Their only dispute was over the public’s understanding of to what BOOKING.COM primarily refers.
In analyzing that step of the test, the appellate court first noted that “the district court found ‘highly relevant’ the absence of evidence by the USPTO that consumers commonly refer to online hotel reservation services as ‘bookings.com’ (citing Booking.com B.V. v. Matal, 278 F. Supp. 3d 891, 914 (E.D. Va. 2017). The district court determined that the USPTO’s evidence demonstrated that such services are referred to as “booking website(s)” or “booking site(s).” Next the appellate court noted that the district court also considered Applicant’s consumer survey, “which demonstrates that 74.8% of respondents identified BOOKING.COM as a brand name.” Such surveys, the appellate court said, “are the ‘preferred method of proving genericness’” (citing Princeton Vanguard, LLC v. Frito-Lay North America, Inc., 786 F.3d 960, 970 (Fed. Cir. 2015)).
Although the USPTO argued the that district court should not have considered the survey, the appellate court said that “the district court, acting as the trier of fact in reviewing Booking.com’s trademark application de novo, did not err in placing greater weight on the consumer survey over other evidence, like dictionary definitions, in assessing the primary significance to the public” (citing Berner International Corp. v. Mars Sales Co., 987 F.2d 975, 982–83 (3rd Cir. 1993) (explaining that direct consumer evidence, e.g., consumer surveys and testimony, “is preferable to indirect forms of evidence” like dictionaries and trade journals)).
The appellate court rejected the USPTO’s argument that adding a top-level domain (TLD) such as .com to a generic second-level domain (SLD) such as “booking” produces a mark that is necessarily generic. The court noted that “[n]o circuit has adopted the bright line rule for which the USPTO advocates—indeed, sister circuits have found that when ‘.com’ is added to a generic TLD, the mark may be protectable upon a sufficient showing of the public’s understanding through consumer surveys or other evidence” (citing Advertise.com, Inc. v. AOL Advertising, Inc., 616 F.3d 974, 982 (9th Cir. 2010); In re Hotels.com, L.P., 573 F.3d 1300, 1304–05 (Fed. Cir. 2009).
But the appellate court did not agree with the district court that “a TLD like .com generally has source-identifying significance when added to an SLD like booking, and that a mark composed of a generic SLD like booking together with a TLD is usually a descriptive mark eligible for protection upon a showing of secondary meaning.” Instead, the appellate court said it agreed with the approach taken by other circuits, which “have similarly declined to adopt a per se rule against protecting domain names, even where they are formed by combining generic terms with TLDs (citing Advertise.com Inc., 616 F.3d at 978–79; In re Steelbuilding.com, 415 F.3d 1293, 1299 (Fed. Cir. 2005)). Thus, the court said, “in ‘rare circumstances’ a TLD may render a term sufficiently distinctive to be protected as a trademark” (citing In re Steelbuilding.com, 415 F.3d at 1299). The court concluded that “adding ‘.com’ to an SLD can result in a non-generic, descriptive mark upon a showing of primary significance to the relevant public” and that BOOKING.COM “is one such case.”
With respect to Applicant’s cross-motion that it not be required to pay the USPTO’s fees, the appellate court noted that (1) Applicant had declined its option of appealing to the Federal Circuit, which would have deferred to the USPTO’s factual findings, and (2) the statute requires an appellant who goes to a district court, where discovery is permitted, to pay the USPTO’s fees. Although the appellate court questioned whether the “American Rule”—the principle that each litigant pays its own attorneys’ fees unless Congress has specifically and explicitly provided otherwise—should apply in situations where, as here, the party seeking an award of fees had not prevailed to at least some degree, the court said that it was obligated to follow precedent and award attorneys’ fees to the USPTO.