A genericness refusal occurs when the USPTO examiner determines the applied-for mark is the common name for the goods or services it covers rather than a distinctive source identifier. Generic terms belong to the public domain; no single entity can claim exclusive rights to them.
"Phone" for a phone, "Software" for a software product, or "Bakery" for a bakery are examples of generic terms. These cannot be registered as trademarks regardless of how long they have been in use, since allowing any one company to monopolize the common name for a product category would prevent all competitors from describing their own goods accurately.
Unlike descriptive marks, which can still potentially be registered with proof of acquired distinctiveness, a generic mark is permanently unregistrable. Even if a once-distinctive mark becomes the common name for a product category through widespread use (as happened with "Escalator" and "Thermos"), it can lose its trademark protection through genericide.