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Use, Liability, and the Structure of Trademark Law Uli Widmaier

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Hofstra Law Review Volume 33 | Issue 2 Article 7 2004 Use, Liability, and the Structure of Trademark Law Uli Widmaier Follow this and additional works at: http://scholarlycommons.law.hofstra.edu/hlr Part of the Law Commons Recommended Citation Widmaier, Uli (2004) "Use, Liability, and the Structure of Trademark Law," Hofstra Law Review: Vol. 33: Iss. 2, Article 7. Available at: http://scholarlycommons.law.hofstra.edu/hlr/vol33/iss2/7 This document is brought to you for free and open access by Scholarly Commons at Hofstra Law. It has been accepted for inclusion in Hofstra Law Review by an authorized administrator of Scholarly Commons at Hofstra Law. For more information, please contact [email protected]. Widmaier: Use, Liability, and the Structure of Trademark Law USE, LIABILITY, AND THE STRUCTURE OF TRADEMARK LAW Uli Widmaier* I. INTRODUCTION ............................................................................... 604 II. THE STRUCTURE OF TRADEMARK LAW ........................................ 610 A . A ttenuated Rights ............................................................... 610 B. The Use-Contingent Nature of Trademark Rights- A H istorical Perspective ..................................................... 613 C. The Use Requirement and the Modem Lanham Act .......... 618 1. The Statutory Definition of Trademark Use ................ 618 2. Use and Infringement Claims ...................................... 620 3. Trademark Use: A Necessary Condition for Applying the Lanham Act ............................................ 621 D. Use and Trademark Rights ................................................. 624 1. Use and Plaintiffs Rights in a Mark ............................ 624 2. Use and Defendant's Infringement of a Mark .............. 626 E. "Use" or "Commerce"? ............................. ......................... 634 III. THE RISE AND FALL OF THE LAW OF THE HORSE: TRADEMARK LAW AND THE INTERNET ..................................... 640 A. Novel Facts and Legislative Reactions .............................. 640 B. Brookfield, Metatags, and the Demise of Trademark Use.. 642 C. The Evolution of the Law of the Horse .............................. 656 D. Pinnacle and Revolution: The Recent Keyword Cases ...... 675 1. The W henU Cases ....................................................... 677 2. The Ninth Circuit's Decision in Playboy v. Netscap e .......................................................................700 * Partner, Pattishall, McAuliffe, Newbury, Hilliard & Geraldson LLP; lecturer in law, University of Chicago Law School. Thanks to Chad Doellinger, Stacey Dogan, Eric Goldman, David Hilliard, and Janet Widmaier for their helpful comments. The views expressed in this article are the author's and should not be imputed to his law firm or its clients. Published by Scholarly Commons at Hofstra Law, 2004 1 Hofstra Law Review, Vol. 33, Iss. 2 [2004], Art. 7 HOFSTRA LAW REVIEW (Vol. 33:603 E. Phone Numbers, and Trademark Use: Putting the Horse out of its M isery ................................................................. 703 IV . C ONCLU SION ................................................................................ 707 I. INTRODUCTION Trademark law is in trouble. Six years ago, Professor Lemley diagnosed the "death of common sense"1 in the courts' interpretations of the modem Lanham Act.2 Unfortunately, his assessment has proven only too true. Instead of a unified and well-integrated body of doctrine sensibly covering all aspects of commerce, the courts have over the past several years created a specialized "law of the horse" that applies to prevalent fact patterns arising in the Internet context.3 This species of mutant trademark law4 has "loosed trademark law from its traditional economic moorings" and drastically, unjustifiably extended its reach.5 As Professor Landes and Judge Posner famously conclude, traditional trademark law is "a rationally designed system for minimizing consumer search costs."'6 In contrast, the courts' current tendency to overprotect communicative symbols of all kinds via trademark law impoverishes human discourse and leads inevitably to collisions with the First Amendment.7 In order for trademark law to fulfill its function as a search cost minimizer and to avoid interference with speech interests,8 trademark law's basic doctrinal structure of 1. Mark A. Lemley, The Modern Lanham Act and the Death of Common Sense, 108 YALE L.J. 1687 (1999) [hereinafter Lemley, Modern Lanham Act]. 2. Lanham Act, 15 U.S.C. §§ 1051 et seq. (2000): 3. Frank H. Easterbrook, Cyberspace and the Law of the Horse, 1996 U. CHI. LEGAL F. 207, 208 (1996). 4. The phrase "mutant trademark law" is an adaptation of language from Dastar Corporation v. 20th Century Fox Film Corporation,in which the Supreme Court held that the Ninth Circuit's extension of the Lanham Act's unfair competition provision (section 43(a)) into the realm of creative works such as movies constituted a "species of mutant [and hence unconstitutional] copyright law." 539 U.S. 23, 34 (2003). 5. Lemley, Modern Lanham Act, supranote 1, at 1688. 6. WILLIAM M. LANDES & RICHARD A. POSNER, THE ECONOMIC STRUCTURE OF INTELLECTUAL PROPERTY LAW 422 (2003) [hereinafter LANDES & POSNER, ECONOMIC STRUCTURE]. 7. See Lemley, Modern Lanham Act, supra note 1, at 1711-13. It is, of course, well established that First Amendment protection extends in principle to all communicative symbols used by humans. See, e.g., Texas v. Johnson, 491 U.S. 397, 420 (1989) (holding that burning the American flag is constitutionally protected as an expressive act). 8. See, e.g., Mattel, Inc., v. MCA Records, Inc., 296 F.3d 894, 905 (9th Cir. 2002) (Kozinski, J.) (arguing that traditional trademark law-in contrast to trademark dilution law- possesses "a built-in First Amendment compass" making it "wholly consistent with the theory of the http://scholarlycommons.law.hofstra.edu/hlr/vol33/iss2/7 2 Widmaier: Use, Liability, and the Structure of Trademark Law 2004] USE, LIABILITY & STRUCTURE OF TRADEMARK LA W attenuated, perception-based rights must be preserved. But that structure is under severe attack. A solid and nearly unchallenged line of cases dating back to 1996 strikes at the heart of trademark law by negating its central dogma, which holds that a trademark is any "'symbol' or 9 'device' . capable of carrying meaning" that serves as a "commercial signature [placed] upon the merchandise or the package in which it is sold." 0 This concept is statutorily enshrined in the Lanham Act-the modem codification of trademark law-under the rubric "use in commerce."" It has traditionally effectuated a rigorous separation between "a right in gross or at large, like a statutory copyright or a patent for an invention"' 2 on the one hand, and the legal protection of the "psychological function of symbols"'13 on the other hand. Put another way, a symbol enjoys trademark protection only insofar as it possesses "commercial magnetism" in the minds of consumers.14 This crucial limitation on trademark rights has been obliterated to a substantial degree by decisions-most prominently by the Ninth and Seventh Circuits in decisions such as Brookfield,"5 Promatek,16 and Playboy,7 First Amendment, which does not protect commercial fraud"). Interestingly, this decision, and a similar decision in Mattel, Inc. v. Walking Mountain Productions, which was decided a year later, may have made trademark law considerably more supportive of speech interests by at least partially implementing the "expressive genericity" doctrine proposed by Professor Cooper Dreyfuss as a remedy for the law's inadequate understanding of "the evocative significance of trademarks." Rochelle Cooper Dreyfuss, Expressive Genericity: Trademarks as Language in the Pepsi Generation, 65 NOTRE DAME L. REv. 397, 398-99 (1990); Mattel, Inc., v. Walking Mountain Prods., 353 F.3d 792 (9th Cir. 2003). As the Walking Mountain court explained, quoting heavily from MCA, "when marks transcend their identifying purpose and enter public discourse and become an integral part of our vocabulary, they assume[ ] a role outside the bounds of trademark law. Where a mark assumes such cultural significance, First Amendment protections come into play. In these situations, the trademark owner does not have the right to control public discourse whenever the public imbues his mark with a meaning beyond its source-identifying function." 353 F.3d at 807" (citations and quotation marks omitted). In other words, these courts have, at least to some degree, created a doctrinal accommodation for Professor Litman's insight that trademarks are "also now metaphors with meanings their proprietors would not have chosen." Jessica Litman, Breakfast with Batman: The Public Interest in the Advertising Age, 108 YALE L.J. 1717, 1733 (1999). 9. Qualitex Co. v. Jacobson Prods., 514 U.S. 159, 162 (1995). 10. United Drug Co. v. Theodore Rectanus Co., 248 U.S. 90, 98 (1918). 11. 15U.S.C.§ 1127 (2001). 12. Theodore Rectanus Co., 248 U.S. at 97. 13. Mishawaka Rubber & Woolen Mfg. Co. v. S.S. Kresge Co., 316 U.S. 203, 205 (1942). 14. Id. at 205, Under modem trademark law, anything that is capable of communicating with consumers can in principle be a trademark. This includes words, slogans, sounds, colors, designs, product configurations, product packaging-any, symbol, in short, that may be endowed with commercial magnetism. See Qualitex, 514 U.S. at 163-64. 15. Brookfield Communications, Inc. v. West Coast Entm't Group, 174 F.3d 1036 (9th Cir. 1999). 16. Promatek Indus.,
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