The Likelihood of Confusion Article Advances the Argument the Trademark Law Is Doctrinally

Outline

1. Development of trademark law A. From consumer protection to property interests (1) Early trademark law focused on consumer protection against fraud & misdirection. This emphasis has shifted to a property interest model. (2) Shcechter’s seminal argument advanced the notion that no rational basis exists for trademark protection other than the interest in maintaining the product’s uniqueness. (a) Unfortunately, the “uniqueness” Schcechter advocates is used to justify protecting existing holders against competitors. Uniqueness as a concept has overshadowed the concern for the myopic public. (b) Lantham Act designed to protect consumers via product identification. 2. Posner justification for property protection A. Consumer protection (1) Posner premises economic justification for trademark as property interest on the fact that search costs are lowered when consumers are able to easily identify a product. (2) The identification of a particular product protects the consumer as they are aware of the product that they are purchasing. (a) Faulty assumption—nothing supports the assumption of linking quality with a particular product. The argument contends that consumers will either purchase a product based on its reputation (identified with the trademark) or will associate quality, or crap, based on past experiences. However, if dilution laws actually facilitate monopoly style control, then the flow of information will be restricted such that consumers may not have complete knowledge on which to base their presumptions. B. Rewarding investment (1) Granting dilution status to famous marks rewards heavy investment early on as substantial investment may be necessary to get the trademark the identification necessary to meet the fame threshold. Closely tied to the acquisition of fame is the notion that the product associated with the trademark would not achieve its fame unless it passed the consumption test— consumers are sufficiently happy with the product & its quality that they would purchase it again. (2) Trademark holders should be rewarded for the contributions that they provide the public (via heavy advertisement investment), with the heightened protection afforded under dilution claims. (a) This argument assumes either a static quality level or that dilution will not serve to prevent young, financially vulnerable competitors from entering the market. (b) Free riding may be necessary in those markets that are heavily dominated by a modicum of competitors. 3. Development of dilution as an infringement claim A. Justification (1) Based purely on a property interest in maintaining a famous mark against potential blurring or tarnishment. B. Elements 4. Impact of dilution on infringement claims A. Shifting of standards (1) The displacement of consumer confusion as the leading justification for trademark protection has impacted courts’ analysis of infringement. Case law reveals an inverse relationship between the rise of trademark as property interests & the likelihood of confusion analysis. (a) Warner Bros. v. Gay Toys: rejected likelihood of confusion in order to utilize a pure property model to justify outcome. (b) 811 F.2d 960: seminal case (get name) in which court solely about protecting property interests. (2) Likelihood of confusion is becoming less popular as dilution standards are beginning to use per se infringement, which indicates that consumers are in danger of becoming a secondary consideration. 5. Critiques of dilution A. Monopoly power (1) Dilution provides famous mark holders with additional protection, which argues Posner, is a reward to heavy investments in advertising & creates easy product identification so as to reduce search costs. (2) Famous mark holders, through dilution, are able to cutoff competition that may benefit from free riding. There is nothing in the original framework of trademark law that specifically prohibits free riding. Moreover, by focusing on protecting the property interest, courts are ignoring consumer confusion. The ramifications of this could be substantial as famous mark holder will enjoy the period of profit between the time their product quality deteriorates & the consuming public catches up. (a) This period is magnified if mark holders can exclude competition. (3) There is no justification for awarding additional protection for mark holders that have more successful marks solely because of their fame or investment. It undermines the notion of competition. In addition, it fails to take into account the market profits that famous mark holder enjoy from having a famous mark in commerce. B. Dilution as preemption to competition (put this in before monopoly section) (1) Victoria Secret requires a showing of actual dilution, but this is suspect because there is nothing inherently wrong with a product being diluted in the market. The purpose of competition necessitates the dilution of marks (flesh this out). As such, dilution actually inhibits competition. (2) There is nothing in blurring or tarnishment that equates to consumer confusion. Thus, the “protection’ & benefit that consumers enjoy derives from product recognition. As such, dilution does not preempt the likelihood of confusion, but an additional standard of protection. (a) One must balance the remote concern of dilution—would a famous mark be easily diluted &, if it did, should it be considered famous (?)—against the benefit of having multiple competitors participating in the same market. Potential source list: 1. 82 TMARKR 531 2. 22 JMARLR 567. 3. Warner bros. v. Gay Toys (658 F.2d 76 (2d Cir. 1981) 4. 60 TMR 334—Shcechter’s article 5. 811 F.2d 960 6. 80 TMARKR 461 7. 47 FLLR 653, 688-9 8. 83 NWULR 473 9. 52 EMORYLJ 489 10. 21 FDMILJ 861 11. 38 AMJUR POF 3d 1 12. 785 PLI/Pat 141 13. Articles published by Fish & Richardson