Abusive Trademark Litigation and the Incredible Shrinking Confusion Doctrine - Trademark Abuse in the Context of Entertainment Media and Cyberspace

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I.   THEORETICAL UNDERPINNINGS OF IP
     PROTECTION                                      615
  A. Underlying Theories of IP Protection            615
     1. Labor/Investment Rationales                  615
     2. Economic Incentive/Efficiency
        Rationales                                   616
     3. Misappropriation Rationales                  617
     4. Personality-Based Rationales                 618
  B. The Theoretical Basis of Trademark Law          619
     1. Confusion Doctrine/Likelihood of Confusion   620
     2. Unfair Competition/Section 43(a)             621
     3. Dilution Theory: Blurring and
        Tarnishment                                  622
     4. Cybersquatting                               624
II.  TRADEMARK OWNERS' RIGHTS AND THE
     PUBLIC INTEREST                                 625
III. TRADEMARK LAW IN THE CONTEXT OF
     ENTERTAINMENT MEDIA                             628
IV.  ABUSIVE TRADEMARK LITIGATION                    631
  A. Characteristics of Abusive Trademark
     Litigation                                      631
  B. Trademark Wars: Legitimate Claims and
     Abusive Claims                                  633
     1. Film Title Cases                             633
     2. Spa'am Case                                  635
     3. Internet Cases                               636
  C. Boomerang Effect of Abusive Trademark
     Litigation Strategies                           637
V.   SUGGESTED PROPOSALS                             638
  A. Coordinate a Sensible Policy on IP Lawsuits
     in Entertainment Industry                       638
  B. Clarify Acquiescence and Laches Standards       639
  C. Eliminate Injunctive Relief as the Primary
     Relief in Dilution Cases                        641
VI.  CONCLUSION                                      641

The recent legal challenge to the extension of the copyright term was grounded in the notion that Congress was giving away benefits to intellectual property ("IP") owners, typically large corporate entities, without any corresponding public benefit that underlies the constitutional authority for IP grants. (1) The giant conglomerates of the copyright industry--such as Time Warner, Disney, and Viacom-ultimately won that battle before the U.S. Supreme Court. (2) Yet, in another case, the Court limited the rights of big corporations with famous trademarks to attack smaller companies under the theory of trademark dilution by requiring a showing of actual economic harm rather than a mere likelihood of dilution. (3)

Courts have generally taken a more conservative view toward the expansion of IP rights and trademark rights in particular, (4) whereas Congress has recently enacted federal trademark dilution protection, (5) federalized the law of trade secrets, (6) outlawed cybersquatting, (7) increased damages for copyright infringement, (8) and extended the term of copyright protection. (9) Such expansion by Congress arguably reflects the political muscle of big businesses, including companies in the high-tech sector and the entertainment industry, and their ability to influence the legislative process. (10)

The expansion of trademark rights has been particularly dramatic, prompting one commentator to charge, with ample support, that Congress appears intent on "a course of annihilating the common law of trademarks.... [W]ith no real conceptual justification, American trademark law has quickly come to emulate trademark jurisprudence of [some civil law countries], where the trademark itself is considered subject to property ownership." (11) Trademark law blossomed in an environment of robber capitalism and was designed to prevent acts of fraud such as removing a competitor's cereal from its boxes, placing the cereal in boxes with one's own mark, and passing it off as one's own. (12) Today, the explosion of computer technology and the rise of the Interact have profoundly impacted every area of IP, including copyright, (13) trade secret, (14) the right of publicity, (15) and trademark law. …