Yes, because this case did not exactly involve "two companies of separate industry [sharing] one second-level domain on different TLDs".
are 3 letters generic or not?
The word "generic" has a very specific meaning in trademark law. While I am certainly aware that domainers regularly use the word "generic" in the sense of "it can be used for lots of things", that is
not what "generic" means in trademark law.
Whether a term is "generic" in the trademark sense is determined by how the term is used by the party in question. For example, the word "apple" is the generic term for a type of fruit which grows on particular trees - i.e. it is virtually impossible to even refer to that type of fruit without using the word "apple". If you are using the word "apple" to refer to that type of fruit, then your use of the term "apple" in that context is unassailable. You are using a term in its generic sense.
If you apply the term "apple" to a personal computer, then you are making an
arbitrary use of the term "apple", since you are no longer referring to that particular fruit. Such an arbitrary use can become distinctive in the minds of consumers as referring to a personal computer that originates with a particular source of personal computers - and indeed it is a distinctive trademark used to indicate the source of a line of personal computers manufactured by Apple Computer.
So, it is not a question of whether the word "apple" is generic or not. Whether it is generic depends on how it is being used.
Getting back to the question of whether "3 letters are generic or not", one can reach a variety of conclusions. "Cat" is three letters, and it is a generic term for a type of animal. "PWC" is three letters, and is used generically in the context of watersports to refer to personal watercraft (jet-ski's and the like). However, "CAT" is also a brand of earthmoving equipment made by the Caterpillar folks, and PWC is a brand of accounting services provided by PriceWaterhouse Coopers.
The question is not whether, divorced from any context, 3 letters are or are not generic. The question is what is the party
doing with those three letters, and what inferences may be drawn about that party's intent based on all of the circumstances of the case.
Such circumstances to be considered can include the relative fame of the asserted mark - i.e. we might assume that anyone with a glancing knowledge of computers or the internet has heard of "IBM" or "AOL" - so there may be three letter combinations where a respondent may face a heavy burden to rebut the inference that he/she knew or should have known of an existing trademark. In other cases, as noted in the posted decision, the existence of a small debt collection firm in Florida claiming WB&W as an unregistered mark does not result in an automatic presumption that a registrant in another country would have any reason to know of that claim for the purpose of determining the domain registrant's intent.
