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Resolving Trademark Duality in the Twenty-First Century: Making Trademarks Internet Ready,

Authors:
  • University of Illinois at Chicago School of Law
Electronic copy available at: http://ssrn.com/abstract=2479920
RESOLVING TRADEMARK DUALITY IN THE TWENTY-FIRST
CENTURY: MAKING TRADEMARKS INTERNET-READY
1 ACTA MUP: Legal Protection of Intellectual Property 31(2013).
Doris Estelle Long
Quasi-market regulation tool, quasi-investment property; trademark's historical role as both
consumer-information signifier and producer-investment asset has led to increasingly confusing
treatment under US law. The potentially borderless markets of cyberspace, with their new
marketing techniques and new competitive spaces, have only heightened this confusion. Instead
of ignoring the dual nature of trademarks, it is time to acknowledge their evolved nature as both
traditional reputation-based source designators and non-traditional information assets, and revise
the law to reflect the different protection norms required for these two different types of “marks.”
In short, it is time to recognize that a new type of trademark has developed an asset-information
mark whose uses and rights are distinctly different from the source designator function trademark
law has traditionally protected.
I. Introduction
Trademarks
1
may arguably have a longer-lived existence than their other intellectual property
relations-patents and copyrights-since “source designators” have been found on pottery created
over 4000 years ago.
2
Such long existence, however, does not guarantee that the legal foundations
for the protection of trademarks is well theorized. To the contrary, at least in connection with the
development of Anglo-American legal traditions, trademarks have suffered from a confusingly
dual nature that has only become more pronounced as demands on a mark’s information-signifying
function has multiplied in the 21st Centurry. This duality developed as a result of the dual basis
on which trademarks were originally protected-as market regulators designed to protect against
consumer confusion and as property rights of their owners who invested time, money, and effort
in creating the informational, and sometimes emotional, meanings associated with such marks.
I contend that a new type of trademark has developed as a result of this historic duality -
one that exists beyond the source (origin) designating role of trademarks. This “information-asset
mark” has a normative function based on rights arising from an investment incentive similar to
Professor of Law, Chair of the Intellectual Property, Information Technology and Privacy Group, and Director,
Center for Intellectual Property Law at The John Marshall Law School, in Chicago, Illinois. This article is based on
an earlier article “Rebooting Trademarks for the 21st Century” which appeared in 49 University of Louisville Law
Review 517 (2011). Special thanks to Allison Schneider and Katie Pimentel for their able research assistance.
1
I am using the terms “trademarks” and “marks” interchangeably to include all categories of marks, including
service marks. See Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS), Art. 15 (defining
trademarks as “[a]ny sign, or any combination of signs, capable of distinguishing the goods or services of one
undertaking from those of other undertakings”).
2
See FRANK I. SCHECHTER, THE HISTORICAL FOUNDATIONS OF THE LAW RELATING TO TRADE-MARKS 20
(1925).
Electronic copy available at: http://ssrn.com/abstract=2479920
that used to prescribe the protection of copyrights and patents, and has proven an uncomfortable
fit within the consumer confusion focus of traditional trademark laws. To resolve these conflicts,
trademark law must be revised to incorporate new standards that not only reconcile trademark’s
dual nature, but also provide a rational basis for dealing with the new and diverse demands placed
on marks in the 21st Century. Revising trademark law to craft a new “information-asset” mark
should help end the problematic legal fictions that have grown up around the use of marks on the
internet and encourage the development of new paradigms for examining the role of trademarks
in the new digital marketplace of the 21st Century.
The Historical “Confusing Duality” of Trademarks
A. Normative Conflicts and the Digital Marketplace
Trademarks have long suffered from a historical conflict over the rationale for their protection.
Reduced to its most fundamental level, this conflict arises from a basic dispute over whose interests
should take precedence when the interests of consumers and trademark owners do not coincide.
This fundamental issue lies at the heart of most of the debates regarding trademark protection in
the competitive spaces of the Internet. The question of the type of right that lies at the center of
trademark protection-property right or market regulatory/unfair competition right - is a corollary
to the fundamental question of whose interests are paramount in a trademark dispute. If the goal is
to protect consumer reliance on the informational value of a mark in making critical market
choices, then one set of rights is needed to protect such informational value. By contrast, if the
goal is to protect the trademark owner's investment in its mark, then another set of rights is
implicated, one that focuses on the protection of the owner's investment in its mark.
The clearest example of these conflicting interests lies in the traditional problem of the ability
of a trademark owner to prohibit the unauthorized use of its mark on a noncompetitive good or
service. Assume that Long Motors decides to create and market a new sports car under the
trademark “Coca-Cola.” It does not obtain permission from the holders of the Coca-Cola mark for
beverages to use the mark in question. In the inevitable lawsuit, if the goal of protection is the
consumer and the informational value of trademarks for that consumer, the use of Coca-Cola as a
mark for cars might be allowed so long as the competitive nexus is not sufficient to cause
misinformation about the source or quality of the cars. The actual outcome of this dispute would
depend on a number of factors that might affect the source confusion arising from the use in
question, including associational confusion.
3
But the normative focus would be on the role of the
trademark as a conveyor of information about the source of the car and its qualities or
characteristics. These qualities could include emotional messages about the lifestyle choices that
ownership of such a good represents.
4
3
Likely confusion prohibitions under US law is not limited to source or origin confusion but includes
associational confusion as well. See, e.g., 15 U.S.C. § 1125(a)(1)(A) (providing relief against the unauthorized use
of mark which is “likely to cause confusion . . . as to the affiliation, connection, or association of such person with
another person, or as to the origin, sponsorship, or approval of his or her goods or services . . . by another”).
4
See Doris Estelle Long, Is Fame All There Is? Beating Global Monopolists at Their Own Marketing Game, 40
Geo. Wash. Int'l L. Rev. 123 (2008) (describing the role of emotional advertising in the development of brand identities
and the potential irrational impact such emotional advertising may have on purchaser decision-making).
By contrast, if the goal of protection is the trademark owner's interests in protecting its
investment, then Coca-Cola cars may well be held to violate the beverage mark owner's rights,
even in the absence of any likely confusion. To the contrary, to the extent that the unauthorized
use of the Coca-Cola mark diminishes the investment value of the Coca-Cola mark to its prior
user, including harming its uniqueness in the marketplace, such use would be prohibited regardless
of whether or not consumer confusion arises. The normative focus is on the investment value of
the mark as a business asset. This basis for protection is most often discussed in the relatively
newer doctrines informing dilution and well-known mark protection.
5
As a practical matter, in any given case the normative basis for relief-consumer or investment
value protection-might not necessarily be outcome determinative. The strong reputation of the
Coca-Cola beverage mark might lead courts to find that consumers could be confused about the
association between the two marks despite the lack of a strong competitive nexus. Alternatively,
courts might find that the value of the mark was harmed by the car company's unauthorized free
riding on Coca-Cola's reputation for quality goods. In the hard-goods world, resolving the
normative basis for protection might not necessarily result in greater predictability. But when
conflicts between consumers and mark owners move into the digital realm, differing normative
bases result in markedly different outcomes. For example, if the car company had used the mark
Coca-Cola as a keyword to attract visitors to its web page about its new Coca-Cola marked cars,
the normative basis that focuses on consumer protection might have found no such confusion since
the keyword provided truthful information about the webpage to which the consumer was being
directed.
6
By contrast, if the protection of the mark owner's investment is paramount, then such
uses might be considered a commercial use that harms the value of this investment.
7
This simple dichotomy, however, is not reflective of the present state of trademark protection
on the Internet. To the contrary, in order to deal with the evolving nature of use of trademarks in
the competitive spaces of the Internet, courts have focused on an ever-changing battery of tests.
From early considerations of initial-interest confusion
8
and per se dilution,
9
to concerns over the
meaning of “use in commerce”
10
and the development of new doctrines of cybersquatting,
11
courts
continue to craft a staggering array of evolving theories of protection that has left commentators
and scholars breathless at the multiplicity of reasoning.
The extension of intellectual property rights to new media is often fraught with inconsistent
determinations, as courts struggle to apply laws created for one media to another. Such struggles
have often been amplified when new technologies are involved. Thus, both copyright and patent
5
See discussion below at Part II.C.
6
See, e.g., Bihari v. Gross, 119 F. Supp. 2d 309, 323 (S.D.N.Y. 2000) (finding use of a metatag that reproduced
plaintiff's mark was permissible because it merely served “as a cataloging system for a search engine” and described
the contents of the web page).
7
See, e.g., Promatek Indus., Ltd. v. Equitrac Corp., 300 F.3d 808 (7th Cir. 2002) (enjoining competitor's use of
trademark as a metatag).
8
See, e.g., Brookfield Commc'ns, Inc. v. W. Coast Entm't Corp., 174 F.3d 1036, 1063 (9th Cir. 1999).
9
See, e.g., Virtual Works, Inc. v. Network Solutions, Inc., 106 F. Supp. 2d 845, 847-48 (E.D. Va. 2000).
10
See, e.g., 1-800 Contacts, Inc. v. WhenU.com, Inc., 414 F.3d 400, 406-07 (2d Cir. 2005).
11
See, e.g., Sporty’s Farm LLC v. Sportman’s Market Inc., 202 F.3d 489 (2d Cir. 2000).
regimes were buffeted by the problem of the scope of protection to be granted software under their
respective regimes, an issue that remains problematic to this day. Yet the difficulties of crafting a
rational basis for the extension of trademark rights into such new competitive spaces of the
Internet-as domain names, URLs, and search-engine results-go beyond the struggle to adapt
intellectual property laws to new communication technologies. Such struggles manifest a deeper
problem for trademark regimes in the 21st Century. That deeper problem is the historical confusing
duality in the normative basis for trademark protection and the reluctance or inability of courts and
legislatures to deal with such duality in a rational manner.
B. Market Regulation and Consumer Confusion
Back in the “early days,” when trademarks were perceived as simple identifiers of the maker
or distributor of a particular good or service, trademark protection appeared to form part of a
growing legal regime designed to regulate the market. This regime was rooted in increasing efforts
to define and regulate competition in the marketplace by establishing the boundaries of fair
conduct. Scholars continue to debate whether it was the protection of the consumer or the mark
holder (producer) that lay behind the early development of trademark protection. There is no
question that courts frequently failed to indicate clearly the basis on which protection was granted.
For example, in Amoskeag Manufacturing Co. v. Spear, an early state trademark case in the United
States, the court described the following reasons for granting protection to plaintiff's trademark:
When we consider the nature of the wrong that is committed when the right of
property in a trade mark is invaded . . . . He who affixes to his own goods an imitation
of an original trade mark, by which those of another are distinguished and known,
seeks, by deceiving the public, to divert and appropriate to his own use, the profits to
which the superior skill and enterprise of the other had given him a prior and
exclusive title. He endeavors by a false representation, to effect a dishonest purpose;
he commits a fraud upon the public, and upon the true owner of the trade mark. The
purchaser has imposed upon him an article that he never meant to buy, and the owner
is robbed of the fruits of the reputation that he had successfully labored to earn.
12
While language regarding the dual goals of trademark protection continues to appear, the
general standards that evolved for protecting trademarks in its earliest days appears most firmly
rooted in evolving unfair competition and market regulation (trade protection) regimes.
13
This does
not mean that language regarding the property nature of the right to be protected under trademark
law was not also prevalent in early court decisions. To the contrary, as demonstrated by Amoskeag
Manufacturing Co., language regarding the property nature of the protected right appeared with
increasing frequency in early cases. But despite frequent reference to the property nature of
trademarks in these early cases, the method of relief that evolved for protecting trademarks gave
precedence to public (consumer) interests. As the Seventh Circuit Court of Appeals recognized in
Stahly, Inc. v. M.H. Jacobs Co.: “It must be remembered that the trade-mark laws and the law of
unfair competition are concerned not alone with the protection of a property right existing in an
12
Amoskeag Mfg. Co. v. Spear, 2 Sand. 599, 605-06 (N.Y. Sup. Ct. 1849)(emphasis added).
13
See, e.g., Frank I. Schechter, The Rational Basis of Trademark Protection, 40 Harv. L. Rev. 813, 830-31
(1927).
individual, but also with the protection of the public from fraud and deceit, and it is obvious that
the right of the public to be so protected is a right which transcends the rights of the individual
trade-mark owner …”
14
Under U.S. trademark law, the analytical framework for traditional trademark violations is
couched in terms of whether a likelihood of confusion exists among consumers regarding the two
marks at issue.
15
Thus, public-interest concerns in trademark cases have become the critical
analytical linchpin in the rights framework. The likely confusion test has become so well
entrenched in trademark rights analysis that it has become the international standard for
determining the scope of such rights. For example, Article 16 of the Agreement on Trade Related
Aspects of Intellectual Property Rights (TRIPS) unequivocally requires Member Countries to grant
trademark protection where the challenged unauthorized use would result in a likelihood of
confusion.”
16
Likely confusion is not the only basis on which relief must be granted under TRIPS.
To the contrary, and in accordance with the dual nature of trademarks as both unfair-competition
regulators and manifestations of exclusive property rights, Article 16 of TRIPS also requires the
protection of well-known marks in certain situations “provided that the interests of the owner of
the registered trademark are likely to be damaged by such use.”
17
But the test of likely confusion
is so firmly established in international regimes that TRIPS establishes a mandatory presumption
of relief in the event of the use of identical marks on identical goods.
18
This interposition of
consumer-protection concerns between the trademark owner's intellectual property and his ability
to prevent its unauthorized use is distinctly different from the rights framework for the protection
of patents and copyrights.
In both patent and copyright regimes, the violation of rights is determined simply by
examining whether the defendant's use violated the right in question. Public-interest concerns
may appear in individual copyright and patent cases in the form of fair use considerations, or in
determinations regarding the availability of injunctive relief, but, in direct contrast to
trademarks, such considerations do not form part of the initial analytical framework for
determining whether a violation has occurred. The specific interjection of the public interest
within the rights framework for patents and copyrights occurs either as a defense in the case of
fair use, or at the remedies stage.
The interposition of the public interest in the initial infringement analysis for trademarks
14
Stahly,183 F.2d 914, 917 (7th Cir. 1950)(citations omitted).
15
See generally 15 U.S.C. §§ 1114(1)(a)-(b), 1125(a)(1)(A) (prohibiting the use of marks “likely to cause
confusion” with registered and unregistered marks, respectively). The test for likelihood of confusion varies from
circuit to circuit regarding the precise factors to be considered (or more precisely, how such factors are delineated).
See Doris Estelle Long, Unfair Competition and The Lanham Act §§ 2.4-2.5 (1993). Nevertheless, each circuit focuses
on the likely confusion of the ordinary consumer arising from the uses in question.
16
TRIPS, Art. 16(1) (emphasis added).
17
TRIPS, Art. 16(3); see also Council Directive 2008/95, art. 5(2), 2008 O.J. (L 299) 25, 29 (EC) (providing for
the protection of marks with “a reputation” where the unauthorized use of such mark “takes unfair advantage of, or is
detrimental to, the distinctive character or the repute of the trade mark”).
18
TRIPS, Art. 16(1) (“In case of the use of an identical sign for identical goods or services, a likelihood of
confusion shall be presumed.”).
underscores the close relationship between trademark rights and market regulation. Unlike patents
and copyrights, trademarks are protected in the interest of preventing competitive harm. This harm
in turn is measured by its impact on the consumer. This does not mean that competitor concerns
do not play a role in the determination of what symbols qualify for trademark protection. To the
contrary, considerations of genericness and functionality for trade dress
19
are premised in part on
a competitor's need for access to the terms and shapes in question. But while competitor needs
may shape some of the issues surrounding the existence of a viable trademark right, it is consumer
needs that determine the ultimate scope such rights will be granted.
C. The Evolving Nature of “Propertized” Trademarks
One of the clearest articulations under U.S. law of the property nature of trademarks was made
by the U.S. Supreme Court in 1879 in the Trade-Mark Cases where the court stated:
The right to adopt and use a symbol or a device to distinguish the goods or property
made or sold by the person whose mark it is, to the exclusion of use by all other
persons, has been long recognized by the common law and the chancery courts of
England and of this country, and by the statutes of some of the States. It is a property
right for the violation of which damages may be recovered in an action at law, and
the continued violation of it will be enjoined by a court of equity, with compensation
for past infringement.
20
The language regarding the nature of trademarks as a “property” based right has been a constant
in both national and international debates over the role of trademarks and shows no sign of
disappearing. The protection of property rights as a goal arguably places the interests of the
trademark holder in protecting his investment in creating a viable brand in the marketplace above
considerations of consumer protection. Under a true property rights framework, in the Coca-Cola
cars example, there is no question that the junior user will be obligated to cease use of the mark
even if no confusion arises or is even likely to arise from such use. In fact, the issue of whether
confusion would be likely to arise is irrelevant. Instead, the critical question becomes who has the
prior interest in the mark at issue.
Despite the recognition of the “property” value of trademarks, and the need to protect an
owner’s often substantial investment in its brand, present trademark law has failed to adopt an
appropriate standard to accomplish this goal. The creation of trademark doctrines, such as dilution,
under which trademark protection is supposed to attach even in the absence of likely consumer
confusion, arguably creates an expanded basis for relief beyond the “narrow” consumer protection
paradigm of likely confusion. In the United States, for example, the Federal Trademark Dilution
Act (FTDA), protects “famous” marks against the unauthorized use of a mark or trade name in
commerce “that is likely to cause dilution by blurring or dilution by tarnishment of the famous
mark, regardless of the presence or absence of actual or likely confusion, of competition, or of
19
Functionality concerns are raised under the Lanham Act in connection with the protection of “devices” as
trademarks, including product configurations, color, and container packaging. Similar to genericness concerns for
word and symbol marks, functionality is concerned with avoiding the grant of trademark rights to shapes, packaging
and other devices which competitors may need to use.
20
Trade-Mark Cases, 100 U.S. 82, 92 (1879) (emphasis added).
actual economic injury.
21
Yet in Starbucks Corp. v. Wolfe's Borough Coffee, Inc., despite
statutory language that pre-empts the need for likely confusion, the court, nevertheless, relied on
likelihood-of-confusion cases to determine if marks were sufficiently similar to qualify for dilution
protection under the FTDA.
22
Protection against harm to the investment (property) value of a mark is similarly
problematic European Union “reputational harm” doctrines. Article5(2) of the Trademark
Harmonization Directive permits member states to prohibit the unauthorized use of identical or
similar marks on goods and services dissimilar from those registered by the mark owner where
such mark “has a reputation in the Member State and where use of that sign without due cause
takes unfair advantage of, or is detrimental to, the distinctive character or the repute of the trade
mark.”
23
Yet despite the recognition of the need to protect the commercial value of a mark from
harm, even cases arising under domestic versions of Article 5(2) rely on likelihood of confusion
as a factor in determining whether the necessary associational link between the contested marks
exists to warrant relief.
24
It is unclear whether the express recognition by the European Court of
Justice of an investment function for marks in Interflora v. Marks & Spenser
25
will ultimately
alter the role of likely confusion in securing relief under Article 5(2), but, at present, seems
unlikely.
Even if the hybrid property/consumer confusion standards represented by US dilution and
European Union “harm to reputation” laws provide expanded coverage beyond likely confusion
standards and, therefore, provide some protection to a mark owner’s investment interest, they do
not resolve the confusing dual nature of trademarks. They simply ignore that such duality exists.
II. The New Information/Property Asset
In attempting to eliminate the present confusing dichotomy regarding the goals and purposes
of trademark protection, the critical question becomes whether a trademark owner's investment
interests should be protected beyond that necessary to safeguard the traditional source-designating
21
15 U.S.C. § 1125(c)(1) (emphasis added).
22
Starbrucks Corp. 588 F.3d 97, 108 (2d Cir. 2009).
23
Council Directive 89/104, art. 5(2), 1989 O.J. (L 40) 1 (EC) (emphasis added). This Directive was replaced
by Council Directive 2008/95, art. 5(2), 2008 O.J. (L 299) 28 (EC), which did not alter the relevant language of Article
5. See also Council Regulation 207/2009, 2009 O.J. (L 78) 1, 5 (EC) (using language similar to Article 5(2) of the
Trademark Harmonization Directive).
24
See Intel Corp. v. CPM U.K. Ltd., , Case C-252/07, 2008 E.C.R. I-08823, ¶¶ 42, 58 (expressly including “the
existence of the likelihood of confusion on the part of the public” as a factor to be considered in establishing the
necessary linking while stressing that protection did not require such likely confusion); Adidas-Salomon AG v.
Fitnessworld Trading Ltd., Case C-408/01, 2003 E.C.R. I-12537, ¶¶ 29-30 (“The infringements referred to in Article
5(2) of the Directive [involving reputational harm], where they occur, are the consequence of a certain degree of
similarity between the mark and the sign, by virtue of which the relevant section of the public makes a connection
between the sign and the mark, that is to say, establishes a link between them even though it does not confuse them.
The existence of such a link must, just like a likelihood of confusion in the context of Article 5(l)(b) of the Directive,
be appreciated globally, taking into account all factors relevant to the circumstances of the case.” (citation omitted).
25
Interflora, Case C-323/09 (2011).
function of marks. One potential solution is to simply eliminate any trademark protection for uses
that do not result in a likelihood of consumer confusion. Reputation-based claims such as dilution
would be eliminated. Claims involving implied associations, such as the use of keyword buys,
would also largely be excluded. This solution has the beauty of apparent simplicity. It may also be
impractical in today's global environment given present international obligations to protect the
reputational value of marks beyond instances of consumer confusion.
26
Traditional trademarks undeniably convey information about the goods and services with
which they are associated. As the historical protection of the source-designating function of
trademarks demonstrates, their informational significance forms a critical element to their
protection. The consumer information that necessarily accompanies trademarks in their source-
designating role includes information about the source and quality of the product, as well as
lifestyle or emotional information about the brand, and the reputational value of the mark.
Beyond embedded information that assists in consumer purchasing decisions,
27
trademarks in
the digital era also possess “informational” values that are unrelated to consumer product
information but have value in the new competitive spaces of the Internet, such as search-engine
placement, website addresses (domain names), and advertisements, including pop-ups. This
informational value may develop from the same types of investments and uses that give rise to the
consumer information protected under traditional trademark-rights analysis. But the information
content that is valued is not directly related to individual purchaser decision making. To the
contrary, similar to copyrighted works, these information-asset marks have value due to their
expressive or emotive content.
28
“Brands,” the business term often used for this information asset,
are not merely purveyors of product information; they have a personality and culture, and often
become the public representation of a business's identity and reputation.
29
As Internet searches and advertising techniques become increasingly important in the digital
market of the 21st Century, the use of trademarks for their non-purchaser information value has
increased. One of the most hotly contested issues today is the legality of Google's unauthorized
use of third-party trademarks in its AdSense program.
30
Keywords are used by third parties to
obtain a higher ranking in Internet search results. This higher ranking is achieved by purchasing
rights to appear ranked first in a search whenever a keyword appears for which the party has paid
for such result. Often, keywords are third-party trademarks, including the marks of a competitor.
26
See TRIPS, Art. 16(3) (requiring protection of well-known marks against unauthorized uses on dissimilar
goods or services where the interests of the owner of the mark “are likely to be damaged by such uses”).
27
Some of this embedded information may well be appeals to emotions that do not necessarily lead to rational
consumer choices. Nevertheless, this “psychological function of symbols” would still be protectable under source-
designating principles because of its impact on consumer purchasing decisions.
28
Copyright protection under U.S. law is limited to the expressive elements of tangible works. See 17 U.S.C. §
102(a) (2006) (providing for copyright protection for “original works of authorship fixed in any tangible medium of
expression”). Ideas, processes, methods of operations, concepts, or other non-expressive elements are outside the
scope of protection. See 17 U.S.C.§ 102(b).
29
See Doris Estelle Long, Is Fame All There Is? Beating Global Monopolists at Their Own Marketing Game,
40 Geo. Wash. Int'l L. Rev. 123, 131 - 35 (2008).
30
See generally Google AdSense, Google.com, http:// www.google.com/adsense.
Thus, for example, a distributor of Coca-Cola products could purchase rights to the keyword
“Coke” so that whenever someone uses that term in an Internet search his website will appear first.
He could also purchase rights under the keyword “Pepsi” to achieve the same result. Such use does
not involve the source-designating function of a mark. But it clearly invokes its informational
value. Moreover, such information clearly has commercial value. Google has earned
approximately 30% of its total revenues in the first quarter of 2010 on its keyword program alone.
31
Because keywords do not use marks to represent the source of goods or provide information
about them, their use does not fall cleanly within traditional trademark analysis. The ongoing
failure of U.S. trademark law to treat effectively the right of a mark owner's ability to control the
use of its mark apart from its traditional source-designating function could be resolved by
acknowledging the existence of the information-asset mark and creating an appropriate legal
regime to protect this mark. Unlike currently recognized marks under the Lanham Act, protection
for this information-asset mark would be provided without regard to consumer confusion. Such
confusion would be irrelevant to any determination of rights because the information-asset mark
is not concerned with traditional trademark uses. It does not carry the consumer purchasing
information that traditional trademark rights regulate because it is not a mark in the traditional
sense. It is not used in connection with goods or services. Or, more specifically, such uses do not
fall within the purview of the rights that are protected for an information-asset mark. To the
contrary, the protection of the information-asset mark is based solely on protecting the trademark
owner's investment interest in his mark. This investment interest is represented by the
informational value of the mark, separate from its source-designating function.
III. Crafting a Legal Framework for the Information-Asset Mark
Since the protection of information-asset marks does not fall within the parameters of
traditional consumer-protection doctrines, the scope of their protection would not be delimited by
the historical norms of likely confusion, “trademark use in commerce,” and associated doctrines.
To the contrary, like copyrights, third-party uses of information-asset marks would be encouraged-
particularly where such uses assist in creating new competitive spaces in the digital market. To
achieve these dual goals of protection and access, however, several difficult questions remain to
be answered.
A. Setting the Parameters of the Information Asset
The US Lanham (Federal Trademark) Act has established a fairly low threshold for symbols
to qualify for trademark protection.
32
The current test of distinctiveness may be sufficient to
determine whether commercial symbols have the legal potential to become recognizable source
designators for the relevant purchasing public. But such a test for the potentially expanded rights
that trademark owners would be granted in an information-asset mark would pose a serious threat
31
See Google Announces First Quarter 2010 Financial Results, Google.com (Apr. 15, 2010),
http://investor.google.com/earnings/2010/Q1_google_ earnings.html (stating that Google reported revenues of $2.04
billion during the first quarter from its Ad Sense program, which represented 30% of total revenues for that period).
32
To qualify for protection a mark must be “distinctive” and must be “used in Interstate commerce.” 15 U.S.C.
§ 1052.
of monopolization. It would grant to the first adopter a virtual monopoly over their selected mark
on any good or service no matter how competitively disconnected they may be. To avoid such
monopolistic tendencies, some standard higher than legal distinctiveness must be required,
particularly since the ameliorating effect of consumer confusion or some other competitive nexus
on such monopolistic tendencies forms no part of the information-asset rights paradigm.
At a minimum, an information-asset mark must achieve some level of renown to justify the
expanded protection of the informational value of the mark beyond the limits of competition and
consumer confusion. The strength of the mark should be a critical, if not determinative, factor in
establishing whether a mark has sufficient informational value beyond its source-designating
significance to warrant protection. The scope of protection afforded an asset-information mark
should follow the controlled-uses model of copyright and patent law.
33
The revised statute should
specify the types of uses that the trademark owner has the power to do or authorize in connection
with the information-asset mark. This specification should follow the positive-rights model of
copyright law.
34
B. Resisting the Impulse Toward Monopolization
Protecting information-asset marks as a property investment, however, should not give owners
absolute rights over every use of the mark. Since even asset-information marks gain their value
from commercial activities, non-commercial uses of such marks, such as in truthful comparative
advertising, should be excluded from the scope of rights granted a mark holder. Similarly because
the new information-asset mark is being protected for its informational or speech values, additional
limitations should be crafted to assure adequate access by third parties to the purely informational
aspects of these marks. Such limitations should be modeled on the fair use limitations of copyright,
and subject to the same considerations of market efficiency
35
and social benefit.
36
By crafting a new rights regime for information-asset marks, new potential revenue streams
for the holders of such marks may well develop. Just as copyright law has adapted to the benefits
and challenges of the digital marketplace, trademarks need to make similar accommodations. Such
accommodations should include the development of new digital licensing models similar to those
established for performing rights under copyright, such as the Sound Exchange and Creative
Commons licensing schemes.
37
Critically, however, these new licensing mechanisms should
33
See 17 U.S.C. § 106 (listing the acts that copyright owners are authorized to do and permit others to do with
their copyrighted works); 35 U.S.C. § 271 (listing the acts that patent owners may prohibit in connection with their
patented inventions).
34
By contrast, patent rights grant negative rights of prohibition. See 35 U.S.C § 271(a).
35
See, e.g., Am. Geophysical Union v. Texaco Inc., 60 F.3d 913 (2d Cir. 1994) (examining the impact of market
availability on fair-use defenses).
36
See, e.g., Sony Corp. of Am. v. Universal City Studios, Inc., 464 U.S. 417, 454 (1984) (analyzing the societal
benefits time shifting provides to determine whether it qualifies as a fair use).
37
Sound Exchange is a performing rights organization that collects and distributes digital performance rights
royalties in the United States. See generally Get Paid When You Get Played, Sound Exchange, http://
soundexchange.com/performer-owner/performer-srco-home. Creative Commons is a nonprofit organization that
offers several types of model licenses to permit the uncompensated licensing of copyrighted materials. See generally
About the Licenses, Creative Commons, http:// creativecommons.org/licenses/ (last visited Feb. 24, 2011).
include limited compulsory licenses for information-asset marks. While such licenses at first blush
appear to burden the flow of information in the digital market, they actually return a balance to
that marketplace by treating information-asset marks like other forms of intellectual property,
where social uses are balanced against traditional compensation rights through carefully structured
compulsory licenses.
One of the difficulties in establishing compulsory licenses, or even expanded fair-use rights,
for information-asset marks is the historical prohibition against such licenses. Because of the
source-designating function of trademarks, under U.S. law, if a mark is licensed to be used by a
third party, the trademark owner must maintain the right to control the quality of the goods or
services offered under the mark.
38
Failure to exercise adequate control qualifies as abandonment
because the mark loses its source-designating function.
39
Given the critical relationship of quality
control to the value of a mark as an information signifier, compulsory licensing of trademarks has
long been prohibited. This prohibition is so strong that it is a standard principle of international
trademark law. Article 21 of TRIPS, for example, expressly prohibits the compulsory licensing of
trademarks.
40
Such prohibitions make sense in the case of source-designating trademarks. Yet,
just as the doctrine of likelihood of confusion should play no role in the determination of rights in
an information-asset mark, similarly, compulsory-licensing prohibitions should be equally
inapplicable. Use of information-asset marks does not implicate the critical consumer-information
role of trademarks. Consequently, so long as compulsory uses are restricted to those uses that do
not adversely impact the investment value of the information-asset mark, they should not be
prohibited. Thus, because the use of trademarks for keyword buys arguably reduces consumer
search costs and provides critical informational support for the digital market, such use could be
required under a compulsory license. The use of an information-asset mark in this fashion would
cause no harm to the trademark owner's investment interest because it does not implicate the
protection of the goodwill that lies at the heart of trademark protection for source-designating
marks.
“Goodwill” remains an evanescent concept under trademark law. While most concede that
goodwill includes the concept of reputation, the precise effect of assigning a trademark without its
goodwill is unclear under US law. Some courts maintain that an assignment in gross (without
goodwill) results in the abandonment of the mark.
41
Others treat such an assignment as a
contractual failure of the assignment of a priority right that does not prevent the assignee from
using the mark.
42
Even more problematic, while the present obligation of goodwill transfer does
38
See Dawn Donut Co. v. Hart's Food Stores, Inc., 267 F.2d 358, 366 (2d Cir. 1959).
39
See, e.g., Barcamerica Int'l USA Trust v. Tyfield Importers, Inc., 289 F.3d 589, 598 (9th Cir. 2002) (“[N]aked
licensing, without any control over the quality of goods produced by the licensee . . . is inherently deceptive and
constitutes abandonment of any rights to the trademark by the licensor.” (quoting First Interstate Bancorp v. Stenquist,
16 U.S.P.Q.2d (BNA) 1704, 1706 (N.D. Cal. 1990))).
40
TRIPS, Art. 21 (“Members may determine conditions on the licensing and assignment of trademarks, it being
understood that the compulsory licensing of trademarks shall not be permitted and that the owner of a registered
trademark shall have the right to assign the trademark with or without the transfer of the business to which the
trademark belongs.”).
41
See Johanna Farms, Inc. v. Citrus Bowl, Inc., 468 F. Supp. 866, 879 (E.D.N.Y. 1978) (stating that assignment
of mark without goodwill results in abandonment).
42
See, e.g., Clark & Freeman Corp. v. Heartland Co., 811 F. Supp. 137 (S.D.N.Y. 1993).
not include the transfer of physical business assets, the failure to use an assigned mark on the same
quality goods may result in an abandonment of the mark. Thus, for example, an alteration in the
formula for baking powder by substituting phosphate for alum was sufficient to result in trademark
forfeiture.
43
Despite the relationship between reputation and trademarks that goodwill broadly represents,
this relationship does not implicate the informational values that attach to the information-asset
mark. As the court in Sugar Busters LLC v. Brennan recognized under US law: “The purpose of
the rule prohibiting the sale or assignment of a trademark in gross is to prevent a consumer from
being misled or confused as to the source and nature of the goods or services that he or she
acquires.”
44
This source-confusion role fits within the normative framework of the source-
designating mark. It does not fit so readily within the non-consumer purchasing information
protected by the information-asset mark. Consequently, traditional prohibitions against
compulsory licenses and assignments in gross should be inapplicable to these marks. Furthermore,
in light of the need to prevent potential monopolization of commercial speech that the adoption of
an information asset may create, such licenses may need to be liberally applied.
V. Conclusion
Altering the Lanham Act to include recognition of a new information-asset mark will not suit
everyone. Trademark owners will gain the recognized right to control certain uses of their
trademarks divorced from the limitations of consumer confusion that have proven so challenging
in the digital marketplace. At the same time, mark owners will also lose a certain amount of control
over the informational aspects of their marks as they are subjected to the necessary limitations of
expanded fair use and compulsory licensing. Treating information assets like other forms of
intellectual property-where socially beneficial uses are balanced against traditional compensation
rights through carefully structured fair use and compulsory-licensing rights-could be the first step
toward creating new norms that support the flourishing of new uses of trademarks in the evolving
competitive spaces of the digital marketplace. But such new uses can only occur if we end the
confusing duality of the present trademark regime and allow trademarks to become full members
of the intellectual property “club.”
43
See Indep. Baking Powder Co., 175 F. at 455.
44
Sugar Busters, 177 F.3d 258, 265 (5th Cir. 1999).
... The hallmark of this test is the ephemeral and eternally discussed concept of distinctiveness. Boldly, a distinctive sign should work for the owner (being his protected property) and for consumers (being a reference and source of information for them) [8]. The 20th century was dominated by the law and economic stream recognizing only signs which are nowadays called conventional trademarks. ...
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The keystone of European consumer protection, the Unfair Commercial Practices Directive (UCPD), was enacted to contribute to the proper functioning of the internal market and to achieve a high level of consumer protection by approximating the laws of EU member states. The EU, via the UCPD, explicitly banishes unfair commercial practices which could potentially harm consumers and implicitly protects certain types of consumer behaviour. Evidence from over 10 years of the application of this harmonised regime allows one to holistically explore the targeted actions and omissions and the impact of the UCPD on commercial practices and consumer behaviour in the EU. The purpose of this study is to explore the UCPD legislative and judiciary perspectives vis-à-vis consumer behaviour and protection. It is founded upon the comparative mapping of (1) the UCPD and (2) case law generated by its ultimate judiciary authority, the Court of Justice of the EU (CJ EU). The information yielded is assessed by focusing on whether the UCPD regime (3) effectively and (4) efficiently protects consumer behaviour. This generates a message about consumer behaviour genuinely or allegedly boosted by the (semi-)harmonised legislation and case law, and indicates both positive and negative viewpoints. The study culminates in conclusions and proposed improvements.
) (enjoining competitor's use of trademark as a metatag) 8 See, e.g., Brookfield Commc'ns
  • E G See
  • Promatek Indus
See, e.g., Promatek Indus., Ltd. v. Equitrac Corp., 300 F.3d 808 (7th Cir. 2002) (enjoining competitor's use of trademark as a metatag). 8 See, e.g., Brookfield Commc'ns, Inc. v. W. Coast Entm't Corp., 174 F.3d 1036, 1063 (9th Cir. 1999).
Network Solutions, Inc., 106 F. Supp 10 See, e.g., 1-800 Contacts, Inc. v. WhenU.com, Inc., 414 F 11 See, e.g., Sporty's Farm LLC v
  • E See
  • D Ge
  • Va
See, e.g., Virtual Works, Inc. v. Network Solutions, Inc., 106 F. Supp. 2d 845, 847-48 (E.D. Va. 2000). 10 See, e.g., 1-800 Contacts, Inc. v. WhenU.com, Inc., 414 F.3d 400, 406-07 (2d Cir. 2005). 11 See, e.g., Sporty's Farm LLC v. Sportman's Market Inc., 202 F.3d 489 (2d Cir. 2000).
Citrus Bowl, Inc., 468 F. Supp 1978) (stating that assignment of mark without goodwill results in abandonment) 42 See, e.g
  • See Johanna Farms
  • Inc
  • D N Ve
See Johanna Farms, Inc. v. Citrus Bowl, Inc., 468 F. Supp. 866, 879 (E.D.N.Y. 1978) (stating that assignment of mark without goodwill results in abandonment). 42 See, e.g., Clark & Freeman Corp. v. Heartland Co., 811 F. Supp. 137 (S.D.N.Y. 1993).