Can you believe it? We are 21 days away from 2020. If you haven’t done your holiday shopping, we hope you survive the mad rush of the malls and enjoy what remains of December. Merry Christmas and Happy Holidays.
Miriah’s Take: Case to Watch in 2020
This month we are looking at several cases with various perspectives. We hope you enjoy the legal caseload and our theme for December.
As 2019 comes to a close, we want want to foreshadow one case for 2020, United States Patent and Trademark Office v. Booking.com. The dispute stems from the question as to whether Booking.com can register its name as a trademark, determining whether the term is protectable.
The governing law is the Lanham Act (otherwise known as the Trademark Act of 1946). Essentially, the law governs trademarks, service marks, and unfair competition, articulating what qualities must exist in the marketplace to make a word, phrase, or mark protectable under the United States Patent and Trademark Office (USPTO) and federal law.
At the minimum, there are two requirements for a mark to be eligible for trademark protection:
- The mark must be in used in commerce;
- The mark must be distinctive or descriptive, looking at the mark’s ability to identify and distringuish particular goods.
One might wonder how this case came before the United States Supreme Court. Booking.com initially filed to trademark “Booking.com,” which was rejected by an USPTO examiner, a trademark trial, and an appeal board. This led Booking.com to appeal to the U.S. District Court for the Eastern District of Virginia. This District Court determined that the trademark can be valid, which was affirmed on appeal by the Fourth Circuit Court of Appeals. USPTO petitioned the Supreme Court to hear the case.
The question centers on whether Booking.com meets the second prong, descriptive. The Fourth Circuit determined that Booking.com was descriptive because the public had come to recognize the booking service, Booking.com, as the mark. Typically, generic terms that simply refer to a product aren’t entitled to trademark protection, which is what the government argues in this case. In contrast to Booking.com, Hotels.com has attempted to apply for trademark protection, but an appeals court ruled against the company, denying trademark protection. Thus, there is a circuit split in the way trademark law is interpreted, particularly how domain names like “.com” or “.net” transform a generic word into a protectable, descriptive, trademark.
In July, 2019, USPTO filed a writ of certiorari (asking the Supreme Court to hear the case). In November, 2019, the Supreme Court granted the writ (agreeing to hear the case on the merits) and added the case to its October 2019 term. While an exact date has not been set for United States Patent and Trademark Office v. Booking.com, it is likely the case will be argued in Spring 2020 with a decision in late June.
Remember, even if the USPTO declines to register a mark for a company, the company can still continue to use the mark. However, registration with USPTO provides certain benefits such as notice of ownership to those who may sell competing products or services and provides a legal presumption of ownership in trademark infringement cases.
If Booking.com is granted trademark protection by the Supreme Court, how will this affect future filings? Will Hotels.com then be eligible for protection? Outside of the hospitality industry, would it be plausible that there are future filings for Fintech.com, Banking.com, or Compliance.com (just spit-balling here). When brand recognition and brand value are extremely significant, it is important to stay informed of changes in trademark law at a high level, which is why we have has flagged this as a case to watch in 2020.
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Miriah’s Hot Topic: TCPA Always a Hot Topic
Over the course of the year, this blog has been following legal updates regarding the Telephone Consumer Protection Act (TCPA). What we’ve covered is barely a drop in the bucket. It seems like almost every day there is a new case involving the TCPA framework, which is one reason why TCPA remains a hot topic.
This time, we are looking at Facebook v. Duguid, out of the 9th Circuit of Appeals, which previously issued the decision in Marks v. Crunch San Diego. Facebook lost at the 9th Circuit of Appeals and filed a writ of certiorari asking the U.S. Supreme Court to hear the case. The Supreme Court has not yet determined whether it will hear the case. Essentially, Facebook is asking the court to consider two things:
- Whether TCPA’s prohibition on calls made using an automatic telephone dialing system (ATDS) is an unconstitutional restriction of speech and whether the proper remedy is to broaden the prohibition (that will make more sense later); and
- Whether the definition of an ATDS encompasses any device that can “store” and “automatically dial” telephone numbers even if a random or sequential number generator is used (essentially asking the Court to rule on the decision in Marks v. Crunch San Diego).
Facebook has a policy of alerting users about unauthorized attempts to access accounts via text message, assuming a user has consented to receive such alerts via tex message. Plaintiff, Noah Duguid, does not have a Facebook account, and thus, did not consent to receive texts from Facebook. Plaintiff sued Facebook for alleged violations of TCPA.
Facebook argued the texts were sent by mistake and that TCPA did not contemplate this specific situation. Facebook argued that extending TCPA liability to all instances in which stored numbers are dialed automatically would expose every cell phone owner who has ever automatically dialed or redialed a number on a contact list to a TCPA claim. Also, Facebook noted that TCPA is an unconstitutional restriction on free speech (which has been made multiple times as a legal argument and rejected).
However, the 9th Circuit did agree that TCPA’s government backed debt exemption was unconstitutional. Rather than striking the entire TCPA as unconstitutional due to the inclusion of that provision, the 9th Circuit simply severed the government backed debt exemption portion. Thus, Facebook is asking the U.S. Supreme Court if the 9th Circuit must strike down the entire TCPA law since a portion of it was found to be unconstitutional.
Facebook is asking the U.S. Supreme Court to review the case, noting the circuit split that exists between the 9th and 3rd as it relates to TCPA interpretation.
At this rate, it is likely we may get legal clarity on TCPA from the U.S. Supreme Court rather than the Federal Communications Commission (FCC), which is the responsible agency. As you may remember, the FCC has sought public comment on the 9th Circuit’s interpretation and has indicated that a rule change would occur since the decision in ACC international v. FCC.
If the court does hear this case, it will be significant, as the U.S. Supreme Court may finally provide legal clarity to TCPA which is much needed for all parties. Many interested parties have filed amicus briefs in this case, including Credit Union National Association. ACA International, Retail Litigation Center, and the U.S. Chamber of Commerce also filed amicus briefs.
You can read more about this case and follow the litigation:
- SCOTUS Blog overview of the docket for Facebook Inc. v. Duguid;
- Reuters news article; and
- JD Supra article on TCPA constitutionality.
Everything but the Kitchen Sink
There is one other case that we think you should pay attention to in 2020. Mattea Morris, one of our high school interns, is highlighting the case for us.
The pending case is Seila Law LLC v. the Consumer Financial Bureau (CFPB). Seila Law LLC is taking legal action against the CFPB, arguing that the CFPB is violating the separation of powers doctrine since it is led by a single director rather than multiple members. The CFPB’S reasoning for being led by a single director is that it is to avoid gridlock and delay which it claims commissions are susceptible to, as well as to prevent the CFPB from industry pressure and political interference. Proponents of a multi-member commission believe the CFPB will be more accountable, less likely to take arbitrary actions, and will result in policy stability.
Seila believes that since the CFPB is in violation of the separation that it should be deemed unconstitutional. The CFPB is currently led by Director Kraninger, who notably told Congress and the U.S. Supreme Court that she believes the CFPB is structured in an unconstitutional manner. Director Kraninger also stated that even if the CFPB is found to be structured in an unconstitutional manner, it should remain fully operative.
Because the U.S. Government (Solicitor General) is not defending CFPB in this case, the U.S. Supreme Court appointed Paul Clement to argue on behalf of the agency.
The case is set for oral arguments at the U.S. Supreme Court on March 3, 2020. Follow all updates at SCOTUS Blog.
The holidays are typically busy. Take some time for yourself to unwind and relax. My favorite relaxing past times are walking my dog, reading a book, or listening to a podcast.
This blog had a great run for one year. We want to thank everyone for their support, reader feedback, and especially those individuals behind the scenes who worked on publishing this blog. While On Miriah’s Mind is taking a break, please stay tuned for future regulatory rundowns. If you’d like to connect with the team behind the blog, email us.