Academic journal article Management Dynamics

The Influence of Trademark Dilution on Brand Attitude: An Empirical Investigation

Academic journal article Management Dynamics

The Influence of Trademark Dilution on Brand Attitude: An Empirical Investigation

Article excerpt


Brands are valuable, albeit intangible, assets that drive business strategy and performance (Aaker, 2014) and then appreciate in value over time (Davis, 2002). A brand is a "name, term, design, symbol, or any other feature that identifies one seller's good or service as distinct from those of other sellers" (American Marketing Association, 2015). Brand equity is a construct used to interpret marketing strategies and assess brand value (Keller, 2002); and it exists when the "consumer has a high level of awareness and familiarity with the brand and holds some strong, favourable and unique brand associations in memory" (Keller, 2003: 67). The most researched and publicised conceptualisation of brand equity is based on principles of consumer psychology (Aaker, 1996, 1991; Keller, 1993).

For Aaker (1991) and Keller (1993), whose thinking forms the foundation of most contemporary brand research, consumers' behaviour and responses are the primary drivers of market performance, which in turn drives shareholder value. The Keller (2003, 2002) model, with a stronger focus on consumer behaviour perspectives, models brand equity as consisting of brand knowledge, brand attitude and brand loyalty.

The concept of 'trademark' is conceptually similar to the concept of 'brand', but 'trademark' is primarily used by the legal fraternity, while 'brand' is primarily used by the marketing fraternity. A universally-accepted definition of 'trademark' is "any word, name, symbol or device, or combination thereof, adopted and used by a manufacturer or merchant to identify his goods and distinguish them from those manufactured or sold by others" (15 U.S.C. 1127 [1982]). Trademarks and brands are two sides of the same coin. Peterson, Smith and Zerrillo (1999) believe that marketers are concerned with building, managing and measuring brand equity, while lawyers are concerned with obtaining and protecting trademarks.

Similar legislation across the globe protects trademarks/ brands against infringementi. Specific trademark legislation protecting famous (or well-known)ii trademarks/ brands against dilution has been highlighted in litigation over the past decade (the Laugh It Off case in South Africa, and the Moseley case in the United States) as well as an academic analysis (Sheff, 2011; Bradford, 2008; Diamond, 2007; Kelbrick, 2007, 2006; Tuchnet, 2007; Alberts, 2006; Magid, Cox and Cox, 2006; Rutherford, 2006). Both cases were decided in their respective countries' highest courts. In both, the owners of the well-known trademark/brand, referred to as the 'senior mark', alleged that another trademark/brand, referred to as the 'junior mark', either blurred or tarnished the senior mark. A senior mark is blurred if the unique character of the trademark/brand is made less distinct, and is tarnished if the reputation is made less positive or desirable (Peterson, Smith and Phillip, 1999; Webster, Page, Webster and Morley, 1997). Following the Moseley case, the Trade Mark Dilution Revision Act of 2006 (HR 683) requires that, if a trademark/brand is to be awarded with anti-dilution (blurring and/or tarnishing) protection in the United States, a likelihood of dilution must be demonstrated. In the South African Laugh It Off case, a probability of substantial economic harm or detriment is required. However, neither the American nor South African courts gave directions for defining the nature or measuring the impact and extent of trademark/brand blurring or tarnishment, or the appropriate empirical methodology to do so.

Anti-dilution protection: Goodwill

Schechter (1927) conceptualised trademark/brand dilution as an interference with the goodwill of a well-known trademark/brand. The senior mark's goodwill has been described as 'selling power' and 'commercial magnetism' (Schechter, 1927) and its value equated to the expenditure incurred in the research and development of patents (Magid et al., 2006). The effect of interference with the trademark's/brand's goodwill was formalised many years later by Anderson's (1983a, 1983b) cognitive model of associative network memory, which forms the basis of the psychology-based approach in the conceptualisation of brand equity. …

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