Dilution and Competition Norms: The Case of Federal Trademark Dilution Claims against Direct Competitors

Article excerpt

Abstract

The field of intellectual property can be understood as a system of regulation governing the competitive process. A study of recent trademark dilution cases suggests that competition norms inform the dilution analysis. Thus, this article uses the example of trademark dilution to demonstrate that intellectual property can truly be viewed as competition policy.

I. INTELLECTUAL PROPERTY AS COMPETITION POLICY

What is in a name? When it comes to legal categories, perhaps everything. In 1998, Foundation Press published the Fifth Edition of Professors Kitch and Perlman's casebook for a survey course on intellectual property entitled "Intellectual Property and Unfair Competition." (1) Notably, the title of the Fifth Edition had been changed from "Legal Regulation of the Competitive Process," (2) the name the book bore since the First Edition published in 1972. The structure of the book, however, remained the same. The content had been updated, but the new title marked a watershed in how the field of copyrights, patents, trademarks, and related doctrines would be labeled and packaged.

A large point of this article is that the title of the first four editions of Professor Kitch and Perlman's book was accurate. (3) The field we call intellectual property is more appropriately understood as a system of regulation governing the competitive process. The details of this article, part of a larger project on intellectual property as competition policy, demonstrate why that assertion is true and why it matters, with a focus on the doctrine of dilution. (4) The structure of my argument is as follows. Part II identifies four competition norms that inform the field of intellectual property. Part III applies these norms to trademark law with a specific focus on the dilution cause of action. Part IV, finally, applies the theory to the case law to show how thinking of trademark law in terms of the identified competition norms helps to assess trademark policy. Part V concludes with a summary of the major points of my article. My goal in this paper is not to change the name of the field, but to inform the label with a deeper understanding of what is at stake in the doctrinal and policy battles over copyright, patent, trademark, and the rest.

II. FOUR COMPETITION NORMS IN INTELLECTUAL PROPERTY

Intellectual property is often understood in opposition to antitrust and competition policy. (5) Trademarks, copyrights, and patents are sometimes described as monopolies, exceptions to the norm of competition and free trade. (6) Conceptually, antitrust and competition policies are viewed as fields outside of intellectual property, arising to limit the protections of intellectual property when they interfere inappropriately with free markets. (7) In Bonito Boats v. Thundercraft, (8) the United States Supreme Court addressed the preemptive effect of intellectual property on state statutes that prohibited certain molding processes for copying boat hulls. The Court, in ruling that such state statutes were preempted, repeatedly referred to intellectual property, specifically patents and copyrights, as Congressionally defined limitations to free trade and free competition in ideas. (9) The Court's language, read narrowly, reinforces the polarization of competition and intellectual property. (10)

But to view intellectual property as the opposite of competition is misleading. This view creates a binary opposition that confuses and ignores the realities of intellectual property law in action, and misleads the formulation of intellectual property and antitrust policy. Intellectual property is as much about competition as antitrust law. While antitrust law, for the most part, deals with traditional price competition, where firms fight over market share through offering customers the best collection of goods or services, quality, and price, intellectual property deals with different types of competition. …