Ludwig von Mises Institute

Trademark

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A trademark is a word, phrase, symbol, or design used to identify the source of goods or services sold, and to distinguish them from the goods or services of others. For example, the Coca-Cola® mark and the design that appears on their soft drink cans identifies them as products of that company, distinguishing them from competitors such as Pepsi®.

Trademark law primarily prevents competitors from "infringing" upon the trademark, i.e., using "confusingly similar" marks to identify their own goods and services.

Other rights related to trademark protection include rights against trademark dilution, certain forms of cybersquatting, and various "unfair competition" claims. IP also includes recent legal innovations, such as the mask work protection available for semiconductor integrated circuit (IC) designs, the sui generis protection, similar to copyright, for boat hull designs, and the proposed sui generis right in databases, or collections of information.[1]

Trademarks in the US[edit]

In the United States, federal law almost exclusively governs copyrights and patents, since the Constitution grants Congress the power "to promote the progress of science and useful arts." Despite the federal source of patents and copyrights, various related aspects, such as ownership of patents, are based on state law, which nevertheless tend to be fairly uniform from state to state.

Federal trademarks, by contrast, not being explicitly authorized in the Constitution, are based on the interstate commerce clause and thus only covers marks for goods and services in interstate commerce. State trademarks still exist since they have not been completely preempted by federal law, but federal marks tend to be more commercially important and powerful. Trade secrets are generally protected under state, not federal, law.

Unlike copyrights and patents, trademark rights can last indefinitely if the owner continues to use the mark. The term of a federal trademark registration lasts ten years, with ten-year renewal terms being available.[1]

Criticism and justification for trademarks[edit]

In the US, the law gives a right to the trademark holder against the trademark infringer.

In Kinsella's view, however, it is the consumers whose rights are violated, not the trademark holder’s. The consumer should have a right to sue the violator for fraud and breach of contract. However, it is difficult to see how this act of fraud, perpetrated on the consumer, violates the trademark holder’s rights, since his property is not physically invaded. Thus, it would appear that, under libertarianism, trademark law should give consumers, not trademark users, the right to sue trademark pirates.

Some more novel extensions of trademark, such as rights against trademark dilution or against certain forms of cybersquatting, cannot be justified. Just as a trademark holder does not have a right to his mark, neither does he have a right against his mark’s dilution. The law against cybersquatting is simply based on opposition to "scalping" and arbitrage. There is nothing wrong with being the first to acquire a domain name and thereafter selling it to the highest bidder.[1] If companies and customers had desired to use a system that did not allow cybersquatting, they could have established their own web addressing system independent of ICANN.

Confusion[edit]

It is unclear that consumers are indeed confused by the use of similar names and symbols. There are, for example, many software packages with similar names, such as Ubuntu, Kubuntu, Xubuntu, and so on, but there is no evidence of significant confusion about which software is which. It is also common practice for grocery and drug stores to carry generic items whose packaging looks quite similar to that of the name brand; but, while this is probably helpful to consumers looking for the generic equivalent of the name brand product, there is no evidence that they actually confuse it with the name brand. It is, in fact, possible that consumers benefit from genericized terms enriching the lexicon more than they suffer from the confusion it causes.

References[edit]

  1. 1.0 1.1 1.2 Stephan Kinsella. Against Intellectual Property, page 12-14, 58-59. Referenced 2011-09-08.

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