trends

Great Domains Can Be Bad Trademarks

Gregory A. Piccionelli
Competition in the adult entertainment industry has become fiercer than ever. Nowhere is this more evident than on the web.

The widespread availability of seemingly limitless free adult materials online, coupled with rampant Internet piracy and very low barriers of entry for new competition are all combining to make profitability in the online adult entertainment industry more difficult than ever. In response, many adult entertainment companies now look to protect their businesses, and any competitive advantages that they have through effective company and product branding.

In doing so, these companies are following the lead of highly successful companies like Playboy®, Hustler®, Digital Playground® and Vivid® that have each made the protection and exploitation of their brands the cornerstone of their business.

One of the most important means by which companies protect and exploit their brands is through federal registration of their marks with the U.S. Patent and Trademark Office (USPTO). This is because federal registration of a company trademark can provide a number of important benefits, including:

  • Exclusive ownership of the mark across the entire country (except in any area in which someone was previously using the same or a confusingly similar name or logo);
  • Availability of treble damages and attorneys fees awards if the mark is willfully infringed;
  • Exclusive registration rights resulting from the USPTO's obligation not to register any potentially confusing marks in connection with goods or services that are identical or similar to those described for the registered mark;
  • A priority date for obtaining trademark applications in foreign countries for a limited time, a critical and often strategic benefit in an increasingly wired world; and,
  • Increased likelihood that trademark owner will prevail in a domain name dispute involving a bad faith registration of a domain name comprising or including the registered trademark.

Unfortunately, however, sometimes a great domain name, especially a great adult domain name, can prove to be a difficult, if not impossible mark to register with the USPTO.

This is because registration of a trademark with the USPTO requires that the mark must be fanciful or arbitrary in relation to the goods or services. For example, Amazon® in relation to an online bookseller and Spearmint Rhino® for gentlemen's clubs are both examples of fanciful or arbitrary marks.

In contrast, if the mark is the generic term for the goods or services to which it relates, such as Hotels.com was recently held to be, it cannot be granted a federal trademark registration. (More about the Hotels.com case below.)

A mark can also be rejected by the USPTO for registration on the USPTO's Principal Register (the trademark register with all the benefits listed above) if the mark is "merely descriptive" of the goods or services to which it relates unless the applicant proves that the mark has "acquired distinctiveness" beyond its descriptive meaning.

Because of the prohibition against Principal Register registration of generic or merely descriptive marks, the USPTO trademark registration requirements can often be at cross purposes with tried and true principals of successful web marketing and branding, especially when it comes to domain names.

This is because often a name or a term that can function as a great domain name precisely because of its generic or descriptive character in relation to the products or services marketed at the site will at the same time be problematic or, in some cases, impossible, to protect as a federally registered trademark.

For example, companies doing business on the web will typically select logical or easy to remember generic or descriptive website names and domain names that tightly correspond to the types of goods or services provided or marketed at their websites.

In fact, since the beginning of the World Wide Web, simple descriptive or generic domain names have been among the most valuable, in part, because they can often increase traffic to a site linked to them by exploiting generic or descriptive type-in traffic and search engine queries directed to obtaining the products or services that are generically or descriptively identified.

One need only consider how many adult websites contain the words "sex" or "nude," for example, to see this basic web marketing principle at work.

But while generic and descriptive website names and domain names are often useful in attracting consumers online, they also often create severe, and sometimes insurmountable difficulties for an entrepreneur wishing to protect such names as company brands via trademark law.

To successfully overcome a USPTO descriptiveness rejection of a trademark application for registration on the Principal Register, an applicant must prove that the descriptive mark has "acquired distinctiveness."

Acquired distinctiveness occurs if the trademark has "become distinctive in commerce of the goods or services set forth in the application."

For example, one very valuable adult industry mark, BlacksOnBlondes, for an adult entertainment site, was originally rejected as being descriptive; however, due to the extensive proof of use and consumer identification with a single source, we were able to overcome the descriptiveness rejection and the mark was granted federal registration on the Principal Register.

If a mark is generic, that is, it literally is the term that is synonymous with the associated good or service, then it may never be registered in the U.S., even if consumers associate the mark with a specific source.

An example of this kind of mark is Lawyers.com, which was held to be generic for services provided by lawyers for "providing an online interactive database featuring information exchange in the fields of law, legal news, and legal services."

The court in that case determined that the mark encompasses the generic services provided by lawyers.

A similar fate, unfortunately for its owners, also recently befell the very valuable domain name Hotels.com, confirming the USPTO's policy regarding generic domain names, and providing a valuable object lesson for adult online businesses trying to protect their brands.

Recently, the U.S. Court of Appeals for the Federal Circuit upheld the USPTO's refusal to federally register the mark Hotels.com on the grounds that the term was generic for the types of services offered at the Hotels.com website.

The case started when applicant Hotels.com L.P. applied to register the service mark Hotels.com in Class 43, for the services of "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 mark was refused registration by the USPTO on the ground that the mark is a generic term for these services.

Hotels.com L.P. appealed the ruling by the USPTO's Trademark Trial and Appeal Board (TTAB) restating its arguments before the TTAB that the dot-com component of Hotels.com negates any generic nature of the word "hotels," and that the mark, viewed in its entirety, is not a generic name, but an indicator of the applicant's services.

The applicant also argued that Hotels.com is not a generic term for a hotel, but that it is used to indicate an information source and travel agency. Neither the TTAB nor the appeals court was persuaded by either argument. In its opinion, the appeals court referred to, and implicitly endorsed, the mythology used by the TTAB to reject the federal registration of Hotels.com.

The court noted that the TTAB started its analysis with dictionary, encyclopedia, and thesaurus definitions of "hotel," "temporary lodging," and ".com." For example, the TTAB used the American Heritage Dictionary of the English Language definition of "hotel" as: "An establishment that provides lodging and usually meals and other services for travelers and other paying guests," and its definition of ".com" as: "Abbreviation: commercial organization (in Internet addresses)."

The TTAB used these definitions as evidence that "hotels" and ".com" effectively name the services provided in association with Hotels.com.

In its opinion, the appeals court then recounted the fact that the TTAB also was correct in its finding that hotels are the "focus" of the applicant's services, citing the applicant's advertisements that stated "[c]hoose from thousands of hotels in hundreds of cities worldwide" by visiting www.hotels.com; directed the public to "[b]ook online at www.hotels.com" and informed consumers that "Hotels.com enables you to quickly and efficiently compare accommodations by price, quality, location ... amenities, availability .... "

In rejecting the Hotels.com application as generic, the TTAB's concluded that the mark was simply a composite term that "communicates no more than the common meanings of the individual components, that is, that the applicant operates a commercial website via the Internet, that provides information about hotels, but adds nothing as an indication of source."

The appeals court agreed with the TTAB's conclusions stating that "[w]e discern no error in the board's consideration of the word "hotels" for genericness separate from the ".com" suffix. Otherwise registrable marks do not acquire generic character by participating in electronic commerce; for as the TTAB pointed out, registrability does not depend on the .com combination. We agree with the TTAB that for the mark here at issue, the generic term "hotels" did not lose its generic character by placement in the domain name Hotels.com."

The Hotels.com case is very instructive for online adult entertainment companies that wish to pursue a branding strategy to survive and prosper in the tough and competitive economic environment that is today's adult entertainment industry.

For those seeking to establish, develop and exploit profitable brands, here are a few tips to avoid the problems encountered by owners of Hotels.com:

  • Choose brand names that are not generic for the products or services associated with the mark.
  • Avoid terms that are descriptive of the products or services, or descriptive of features or characteristics of the products or services associated with the mark.
  • If the mark selected is descriptive, do everything possible to help the mark attain a level of acquired distinction as soon as possible.
  • If registration on the Principal Register is foreclosed by the USPTO, but registration on the Supplemental Register is an available alternative, seriously consider the option because after five years of continuous use while on the Supplemental Register in good standing a registrant can reapply for registration on the Principal Register.
  • If you are using brands that are descriptive in any manner, to preserve the best chances of federally registering the mark avoid advertising copy that uses the brand in a descriptive or generic sense. For example the likelihood of overcoming a descriptiveness rejection for the mark BigCocks.net for a website depicting well-endowed adult actors is diminished if advertising on the site focuses exclusively around the theme of large phalluses, such as "this is the place for big cocks," etc.

Finally, a word about filing your own trademark applications in circumstances where the mark might be deemed to be generic or descriptive.

The USPTO website, www.uspto.gov, allows individuals and companies to file their own trademark applications. The site is fairly easy to use and, in many cases, provides a significant cost savings to a would-be trademark applicant compared with hiring an attorney to prepare the filing.

I strongly advise clients against the do-it-yourself approach, however, in cases involving descriptive or potentially generic marks, marks that might be rejected by the USPTO as "immoral or scandalous" (a common rejection for adult mark applications), or applications that will require the transmission of exemplars of use to the USPTO that contain depictions subject to the 2257 regulations (18 U.S.C. §§ 2257 and 2257A and 28 CFR 75).

In these types of cases we have found through years of experience that a party's filing of their own application without help from, or review by, experienced trademark counsel also familiar with adult entertainment regulations will often result in problems that will cost much more to have an attorney remedy than the cost of filing the application by, or with the help of, experienced counsel in the first place.

Gregory A. Piccionelli is an intellectual property and adult entertainment attorney experienced in Internet matters, including Federal Trade Commission matters. He can be reached at Piccionelli & Sarno at (805) 497-5886 or greg@piccionellisarno.com. This article is not intended to be, nor should be considered to be, legal advice. I strongly urge you to seek the counsel of a qualified and experienced adult entertainment attorney familiar with the types of legal matters discussed in this article.

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