The Extended Protection of "Strong" Trademarks

By Bottero, Nicola; Mangani, Andrea et al. | Marquette Intellectual Property Law Review, Summer 2007 | Go to article overview

The Extended Protection of "Strong" Trademarks


Bottero, Nicola, Mangani, Andrea, Ricolfi, Marco, Marquette Intellectual Property Law Review


INTRODUCTION

I.   THE FUNCTION OF TRADEMARKS: A TRADITIONAL LAW
     AND ECONOMICS APPROACH

II.  THE LEGAL EVOLUTION AND THE NEW PROTECTED
     FUNCTION OF TRADEMARKS

III. TRADEMARK PROTECTION AND PRODUCT QUALITY

IV.  TRADEMARK PROTECTION, PRODUCT QUALITY, AND
     ADVERTISING

V.   BRAND EXTENSIONS AND PRODUCT QUALITY

VI.  FREE RIDING AND TRADEMARK DILUTION

CONCLUSION

APPENDIX

INTRODUCTION

Legal evolution evidences that trademarks are currently protected not only to avoid consumer confusion, but also to provide firms with an adequate return on investments made to create and maintain strong brands. However, the rational basis of this development is subject to question and review. While free riding on a famous brand may, indeed, generate negative spillover effects, such as trademark dilution, and this may, in turn, reduce the incentive to invest in trademarks, this Article seeks to illustrate that such investment cannot be seen as indicative of product quality. Indeed, this Article suggests that the existence of trademark protection does not, per se, create an incentive for continuous improvement in product quality. Not even the signalling argument--specifically, in relation to advertising and brand extensions--can, by itself, justify the extended protection of strong trademarks. In fact, the signalling argument may be invoked only when negative spillover effects are proven and are shown to adversely affect both the senior user of the trademark and the profitability of the trademark in all markets, thereby leading to a reduction of "welfare."

Part I of this Article begins by outlining the function of trademarks from a traditional law and economics perspective. The current evolution of trademark protection and the "new" lawyers' interpretation of trademark functions is addressed in Part II, including a discussion of the apparent conflict between this approach and the traditional view of economists. Part III summarizes the standard economic doctrine regarding trademark protection and argues that this doctrine does not completely address new questions raised, for example, by the existence of "strong" brands and their extensions. Accordingly, Parts IV and V briefly review the economic literature regarding advertising, brand extensions, and product quality. Ultimately, as outlined in Part VI, an extended protection of strong trademarks cannot be clearly explained by the desire to protect high product quality. However, assuming the possibility of trademark dilution caused by free riding on strong trademarks, it is evident that an extended protection can prevent welfare losses when product variety is considered as an important argument of the consumers' utility function. The Appendix at the conclusion of this Article includes additional analysis to illustrate that when free riding leads to an increase in the product classes covered by a famous trademark, then the senior user has an incentive to free ride on his or her trademark.

I. THE FUNCTION OF TRADEMARKS: A TRADITIONAL LAW AND ECONOMICS APPROACH

In the standard literature of law and economics, trademark law is presented as an incentive for business enterprises to invest in the quality of the goods and services with which marks are used and as a remedy to specific market failures. (1) Thus, it is argued that if it were impossible for consumers and for the public-at-large to identify the source of goods, then every business would have an incentive to supply goods at a quality lower than the average prevailing in the industry because the profits generated by the individual transaction would, in fact, be garnered by the individual business entering into it, while the reputational costs derived from the public's disappointment with the quality of goods would be externalized to the entire industry. (2) Accordingly, the adoption of a sign or symbol that consistently links the goods to a source over time is seen as a device to overcome this difficulty. …

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

The Extended Protection of "Strong" Trademarks
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.