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Trademarks: More Than Meets the Eye

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Trademarks: More Than Meets the Eye TRADEMARKS: MORE THAN MEETS THE EYE ∗ Vincent Chiappetta In recent years, the evolution of protection provided under trademark law has expanded in scope. This expansion has been regarded as a usurpation of rights which are outside the intention of the protections afforded under trademark law. This article advances a proposed resolution to this perceived problem by seeking to recast the paradigm by which the purpose of trademark law is interpreted. By bringing the purpose of trademark law in line with modern day economic reality, the appropriate boundaries of trademark protection can be achieved. This article begins by introducing the concept of an “encouragement based” trademark regime which seeks to maximize social value by creating incentive for investment while ensuring confusion avoidance. The article considers a brief justification for United States intellectual property law focusing on current propertization concerns. Next, the article argues for the inclusion of incentives in trademark law consistent with use in contemporary culture. Finally, the "encouragement" paradigm is used to consider the mounting pressures coming to bear on current trademark dilemmas. The article concludes that the "encouragement" paradigm is an advancement in the trademark analytical framework and will aid in resolving current concerns while preparing to meet future challenges in this area. I. INTRODUCTION By all accounts, the “propertization” of trademark law is out of control,1 with the regime providing rights flagrantly unplugged2 from the ∗ Professor, Willamette University College of Law. My thanks to Professor Dennis Karjala and an anonymous Journal reviewer for a number of extremely useful comments. The author gratefully acknowledges a Willamette University College of Law research grant made in connection with the preparation of this article. 1. The list of trademark commentators is a veritable “Who’s Who®” of academics, practitioners, and members of the judiciary, with only space constraining the following listing (apologies to the numerous others). See, e.g., Keith Aoki, How the World Dreams Itself to Be American: Reflections on the Relationship Between the Expanding Scope of Trademark Protection and Free Speech Norms, 17 LOY. L.A. ENT. L. REV. 523 (1997); Stephen L. Carter, The Trouble with 35 36 JOURNAL OF LAW, TECHNOLOGY & POLICY [Vol. 2003 “search cost reduction/confusion avoidance” justifications generally acknowledged as its raison d’être.3 Lanham Act4 registration affords national exclusivity based merely on local use5 and permits “reservations” requiring only promised future implementation.6 Famous trademarks, themselves infamously poorly defined,7 receive protection against dilution8 explicitly based on factors other than confusion; 9 and use of a registered trademark as an Internet domain name is prohibited solely upon finding “a bad faith intent to profit.”10 The juggernaut has Trademark, 99 YALE L.J. 759 (1990); Robert Denicola, Freedom to Copy, 108 YALE L.J. 1661 (1999); Graeme B. Dinwoodie, The Death of Ontology: A Teleological Approach to Trademark Law, 84 IOWA L. REV. 611 (1999); Thomas D. Drescher, The Transformation and Evolution of Trademarks—From Signals to Symbols to Myths, 82 TRADEMARK REP. 301 (1992); Rochelle Cooper Dreyfuss, Expressive Genericity: Trademarks as Language in the Pepsi Generation, 65 NOTRE DAME L. REV. 397 (1990) [hereinafter Dreyfuss, Pepsi]; Rochelle Cooper Dreyfuss, We Are Symbols and Inhabit Symbols, So Should We Be Paying Rent? Deconstructing the Lanham Act and Rights of Publicity, 20 COLUM.-VLA J. L. & ARTS 123 (1996) [hereinafter Dreyfuss, Rent]; Nicholas S. Economides, The Economics of Trademarks, 78 TRADEMARK REP. 523 (1988); Wendy J. Gordon, Introduction to Symposium: Ralph Sharp Brown, Intellectual Property, and the Public Interest, 108 YALE L.J. 1611, 1611–17 (1999); Alex Kozinski, Trademarks Unplugged, 68 N.Y.U. L. REV. 960 (1993); William P. Kratzke, Normative Economic Analysis of Trademark Law, 21 MEMPHIS STATE U. L. REV. 199 (1991); William M. Landes & Richard A. Posner, Trademark Law: An Economic Perspective, 30 J. L. & ECON. 265 (1987); Mark A. Lemley, The Modern Lanham Act and the Death of Common Sense, 108 YALE L.J. 1687 (1999); Jessica Litman, Breakfast with Batman: The Public Interest in the Advertising Age, 108 YALE L.J. 1717 (1999); Glynn S. Lunney, Jr., Trademark Monopolies, 48 EMORY L.J. 367 (1999) [hereinafter Lunney, Trademark]; Glynn S. Lunney, Jr., The Trade Dress Emperor’s New Clothes: Why Trade Dress Does Not Belong on the Principal Register, 51 HASTINGS L.J. 1131 (2000) [hereinafter Lunney, Trade Dress]; Kenneth L. Port, The Congressional Expansion of American Trademark Law: A Civil Law System in the Making, 35 WAKE FOREST L. REV. 827 (2000) [hereinafter Port, Civil Law]; Kenneth L. Port, Trademark Monopolies in the Blue Nowhere, 28 WM. MITCHELL L. REV. 1091 (2002) [hereinafter Port, Blue Nowhere]; Simone A. Rose, Will Atlas Shrug? Dilution Protection for “Famous” Trademarks: Anti-competitive “Monopoly” or Earned “Property” Right?, 47 FLA. L. REV. 653 (1995); Jerre B. Swann, Dilution Redefined for the Year 2000, 90 TRADEMARK REP. 823 (2000) [hereinafter Swann, Dilution Redefined]; Jerre B. Swann, An Intuitive Approach to Dilution, 89 TRADEMARK REP. 907 (1999) [hereinafter Swann, Intuitive Approach]; Jerre B. Swann & Theodore H. Davis, Jr., Dilution, An Idea Whose Time Has Gone: Brand Equity as Protectable Property, The New/Old Paradigm, 1 J. INTELL. PROP. L. 219 (1994) [hereinafter Swann, Brand Equity]; Jerre B. Swann et al., Trademarks and Marketing, 91 TRADEMARK REP. 787 (2001) [hereinafter Swann, Marketing]. 2. See Kozinski, supra note 1, at 960. 3. See, e.g., Lemley, supra note 1, at 1714; Lunney, Trademark, supra note 1, at 369–73; see also infra notes 47–78 and accompanying text (discussing the origins and nature of the justification). 4. 15 U.S.C. §§ 1051–1127 (2000) (originally enacted as Act of July 5, 1946, ch. 540, 60 Stat. 427). The act is popularly known by reference to its principal sponsor, Representative Fritz G. Lanham. See Lunney, Trademark, supra note 1, at 367 n.7. 5. See 15 U.S.C. §§ 1051(a), 1127 (requiring only “use in commerce,” which is defined to be any bona fide use of a mark in the ordinary course of trade); Carter, supra note 1, at 777. 6. See 15 U.S.C. § 1051(b) (added as part of the Trademark Law Revision Act of 1989, Pub. L. No. 100–667, 102 Stat. 3935); Carter, supra note 1, at 778–79. 7. See, e.g., Lemley, supra note 1, at 1698; ROBERT P. MERGES ET AL., INTELLECTUAL PROPERTY IN THE NEW TECHNOLOGY AGE 710–11 (2d ed. 2000) [hereinafter MERGES, TECH AGE]. 8. See 15 U.S.C. § 1125 (c) (2000) (providing for protection against dilution of famous marks). 9. See 15 U.S.C. §§ 1125(c), 1127 (defining dilution as occurring “regardless of the presence or absence of. .likelihood of confusion”); Mattel, Inc. v. MCA Records, Inc., 296 F.3d 894, 903 (9th Cir. 2002) (“By contrast to trademark infringement, the injury from dilution usually occurs when consumers aren’t confused about the source of a product.”); Avery Dennison Corp. v. Sumpton, 189 F.3d 868, 873 (9th Cir. 1999) (“in a dilution case competition between the parties and a likelihood of confusion are not required to present a claim for relief”). 10. 15 U.S.C § 1125(d). No. 1] MORE THAN MEETS THE EYE 37 become so unstoppable that not even free speech restraints can hold their ground as fair use and parody defenses morph from vital guardians of cherished social values into threats to trademark owners’11 property interests.12 This loss of common sense13 leaves society not only with “bad” monopolies14 depriving Lions® football fans of low-cost t-shirts demonstrating their fidelity,15 the Pepsi® generation of its very name,16 and fledgling members of society of a much coveted breakfast with Batman®,17 but also leaves us locked in contest over our ability to express and define ourselves in the context of contemporary culture.18 All in all, the troubles with trademark19 seem substantial indeed. The appropriate response lies not in vigorous retrenchment but in adjusting our thinking about the purposes of trademark law. Pushed by technological advance and evolving social norms, the marketplace has changed considerably: geographically; in forms of distribution; in product offerings; and in demand. In response, trademark signaling has moved beyond attaching a “source identifier” to a good, to become a highly sophisticated activity which conveys to the market a wide range of useful information concerning both brand “values” and specific purchase decisions.20 The current trademark propertization pressures can, therefore, be better understood not merely as rent-seeking run amok, although some element of personal benefit is involved, but as a legitimate effort to recapture the significant costs of creating the powerful marks necessary to support this market information system. Coupling these increased investments with significant “public goods” problems gives intellectual property law incentives a central role in modern trademark law.21 To provide maximum social value, trademark 11. Even the premise of “ownership” on which these claims rest is problematic under traditional doctrine. A confusion-based regime only recognizes trademark ownership to overcome the transaction costs of direct consumer assertions of their right not to be misled. See infra notes 53–54 and accompanying text. 12. See, e.g., Aoki, supra note 1, at 532–43 (providing an excellent review of a number of cases); see also Dreyfuss, Pepsi, supra note 1, at 403–08. 13. See Lemley, supra note 1, at 1687, 1713–14. 14. See Lunney, Trademark, supra note 1, at 373. 15. See Kozinski, supra note 1, at 970 (Judge Kozinski actually uses the Mets baseball team, but this is one of the few opportunities, aside from the annual, disastrous Thanksgiving game, to give the Detroit Lions some positive visibility). 16. See Dreyfuss, Pepsi, supra note 1, at 397–99.
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