District court held to have erred in deciding whether '.com' mark is generic

United States of America
In Advertise.com Inc v AOL Advertising Inc (Cases 10-55069 and 10-55071, August 3 2010), the US Court of Appeals for the Ninth Circuit has reversed and vacated a preliminary injunction to the extent that it enjoined Advertise.com Inc from using 'Advertise.com' as a trade name or designation.
AOL Advertising Inc sued Advertise.com, claiming that Advertise.com infringed AOL’s trademark rights. AOL based its claim primarily on its federal registration for a stylised rendition of 'advertising.com', without any disclaimer of the wording 'advertising.com'.
In connection with its lawsuit, AOL sought a preliminary injunction requiring Advertise.com to cease all use of 'Advertise.com', even as a name, and even without a similar stylisation. The district court, finding that AOL was likely to succeed on the merits of its claims, granted the preliminary injunction requiring Advertise.com to cease all use of 'Advertise.com', including as a name, and refused to stay the injunction pending appeal. Initially, a Ninth Circuit panel stayed the execution of the injunction as to use of 'Advertise.com' as a trade name or designation. On the full appeal of the injunction, another Ninth Circuit panel in effect rejected AOL's claims.           
While, in connection with the full appeal of the preliminary injunction, the Ninth Circuit recognised that a federal registration does confer on the registrant a “presumption of validity” and “places the burden of proving genericness upon the defendant”, it reversed the district court’s issuance of a preliminary injunction. The Ninth Circuit relied on the fact that the parties “appear to agree” that the genus of AOL’s services offered under its ADVERTISING.COM mark consist of online or internet advertising services. In this context, the court considered whether the mark was descriptive and capable of acquiring secondary meaning, or was simply generic and unprotectable.
The Ninth Circuit noted that the word 'advertising' alone is generic and, similarly, '.com' is generic. This finding, however, did not end the court’s analysis. Rather, the court considered the mark as a whole, stating that a combination of generic terms may, “in some instances”, result in a distinctive mark.
In its analysis of the mark as a whole, the court relied heavily on a dictionary definition which referenced “dot com advertising” as persuasive evidence that ADVERTISING.COM was generic. Buttressing this evidence, the Ninth Circuit pointed to the many Federal Circuit decisions holding that purported marks such as HOTELS.COM, LAWYERS.COM and MATTRESS.COM were generic and unprotectable (for further details please see "Adding '.com' to generic term does not make it registrable, says court", "LAWYERS.COM mark generic says Federal Circuit" and "Federal Circuit finds another '.com' mark to be generic"). Similarly, the court noted that other Ninth Circuit precedent did not consider the addition of '.com' as distinguishing or strengthening marks in the likelihood of confusion context.
The Ninth Circuit specifically rejected AOL’s reliance on the Federal Circuit decision in In re Steelbuilding.com. There, the Federal Circuit rejected a claim of genericness, but did so because the services covered by the mark went far beyond the mere sale of steel buildings online (for further details please see "Descriptive STEELBUILDING.COM application flattened"). No such facts existed on the record before the Ninth Circuit, although the court expressly stated that it is possible that, at a full trial, the evidence may result in sufficient facts to protect AOL’s mark. However, the current evidence of record did not.
Further, the Ninth Circuit expressly noted that it was not holding that all combinations of generic terms are unprotectable but, rather, just the mark at issue in this matter, given the undisputed services for which it was being used.
The Ninth Circuit’s decision underscores that those who create businesses using designations that consist of a combination of generic terms do so at their peril. Such businesses, absent unusual factual circumstances, cannot expect to avail themselves of trademark protections, even against those who may typosquat or cybersquat.
Rochelle D Alpert, Morgan Lewis & Bockius LLP, San Francisco

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