July 01, 2014

Advance Sheet: Trademarks: Whose Harm Is It Anyway?

A company may own a trademark, but to win in court, it must argue that a rival's infringement harms consumers.

Robert E. Shapiro

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If you are an unsuspecting litigator wandering into trademark law for the first time, you may be in for a rude awakening. Trademark law seems so simple and straightforward, but exactly the reverse is true. Here’s the ordinary situation: Your client owns a trademark—a name, perhaps, like Louis Vuitton or Crest or Cheerios. Or it has a distinctive pattern or mark it uses to sell its goods. Think Burberry or Starbucks. It has poured enormous resources into promoting its trademark in the marketplace, and that mark now has enormous value to it. Everyone thinks of your client when the trademark appears, just as everyone thinks of an oil company when a certain yellow shell pops up or hamburgers when there are golden arches. The company has much of its goodwill tied up in its trademark and guards it preciously as the valuable intangible asset it surely is.

Then, suddenly, along comes another company with designs on that goodwill. It launches its competing products with a name or a pattern or a mark substantially similar to your client’s own. You are called upon to protect your client’s investment in its asset, and you can see a clear case of infringement, which seems to amount to a kind of theft. So you sit down to write your complaint about your client’s rights. You intone seriously at the outset: “The trademark laws exist to protect the trademark holder’s rights in its valuable mark.”

Stop! You are making a mistake. What you said would seem to make perfect sense. After all, why else would there be a law against copying a trademark, if not to protect the company or person who developed it, used it, sank oodles of hard-earned cash into promoting it, and has the best reason to protect it? But the trademark laws are peculiar. However counterintuitive it may seem, it is a settled principle of trademark law that trademarks do not, for the most part, exist to protect the trademark holder at all. No, trademarks are valuable identifiers of source, and the laws bar infringement to protect the consumer.

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