Grounding Trademark Law Through Trademark Use

AuthorStacey L. Dogan/Mark A. Lemley
PositionProfessor of Law/William H. Neukom Professor of Law
Pages1670-1701

    Professor of Law, Northeastern University School of Law


    William H. Neukom Professor of Law, Stanford Law School; Of Counsel, Keker & Van Nest LLP.


Page 1670

The debate over "trademark use" has become a hot-button issue in intellectual property ("IP") law. In Confusion over Use: Contextualism in Trademark Law, Graeme Dinwoodie and Mark Janis characterize it as a dispute over whether to limit trademark-holder rights in a new and unanticipated way.1 Yet, there is another-and in our view more historically accurate-way to frame the trademark use debate: the question is whether courts should, absent specific statutory authorization, allow trademark holders to assert a new and unprecedented form of trademark infringement claim. The pop-up and keyword cases involve attempts to impose third-party liability under the guise of direct infringement suits.2 Dinwoodie and Janis's thorough account notwithstanding, it remains a fact that, before the recent spate of Internet-related cases, no court had ever recognized a trademark claim of the sort that trademark holders are now asserting. Trademark infringement suits have always involved allegations of infringement by parties who use marks in connection with the promotion of their own goods and services.3 The question raised by the trademark use cases, as we view it, is whether courts should countenance a radical departure from that traditional model without specific instruction from Congress. We think they should not.

I New Problems, New Solutions

Trademark law has come a long way. It surfaced, centuries ago, as a guardian of traders who used "marks," or symbols, to indicate the source of their wares and who wished to prevent competitors from using the same mark to deceive customers into buying the wrong product. Over time, trademark law grew to accommodate changes in the nature of commerce and the norms of marketing and advertising. The law now protects a broad array of devices-including shapes, colors, sounds, and smells-against use not only by competitors but also by sellers of even peripherally related products. And the doctrine of consumer confusion-which, as Professors Dinwoodie and Janis point out, has served as the "touchstone for trademark liability" in recent years4-has allowed the expansion of trademark-ownerPage 1671 rights as well, to the point where the law prevents not only passing off, but any use that might create an association between the trademark holder and the defendant's product or service.5

This steady expansion in the subject matter and scope of trademark law has not gone unnoticed, and legal scholars have long sounded warnings about the dangers of overly muscular trademark rights.6 But in the last several years, the nature of the debate has changed. The growth of the Internet has revolutionized the ways in which people obtain information about their world, including products and services sold under trademarks. Increasingly, consumers identify, research, and purchase goods exclusively online, often with the assistance of Internet intermediaries.7 These intermediaries use all of the linguistic and technological tools at their disposal to disseminate relevant information, including advertisements, to their clients. Sometimes they match advertisers with clients based on preferences revealed by the clients' use of a protected trademark.8 And increasingly, these intermediaries are facing trademark claims based on such "use" of protected marks.

It is no accident that the rise of these Internet-based trademark claims has occasioned a re-examination of the core principles of trademark law. As Dinwoodie and Janis point out, existing trademark doctrine fails to provide a clean answer to the question of whether one can face liability for "using" a trademark as an information-indexing tool. We differ, however, over thePage 1672 reason for that failure as well as the appropriate response. Dinwoodie and Janis contend that the trademark use doctrine did not emerge until recently because trademark law does not, and should not, include any limitation on the type of uses that can subject one to infringement liability.9 But there is another, and in our view more likely, explanation for the absence of an explicit trademark use requirement historically: the vast majority of cases in the pre-Internet era involved defendants that clearly had used the mark (or something like it) as a visible device in marketing their own products. Courts rarely addressed the limits of trademark use because they rarely faced claims against parties whose use of a trademark did not fit the traditional model. On the rare occasion that they did face such claims, courts (including the Supreme Court) relied on theories of secondary liability, which suggested that they presumed a limitation on the acts that could constitute direct infringement.10

Trademark law, then, is at something of a crossroads. Dinwoodie and Janis correctly argue that the choices that courts make at this crossroads will have a tremendous impact on both Internet-based commerce and on the overall evolution of trademark law. Like them, we fear what will happen if the courts get it wrong. But while they fear a world of informational overload and deception if trademark holders cannot control all uses of their marks, we fear the opposite: a world in which intermediaries, for fear of liability, fail to use consumer-generated trademark signals at all in designing their business models. In this world, Amazon.com would hesitate before recommending alternative, lower-cost electronics products to a consumer seeking an expensive brand. Disney could prevent local hotels from advertising cheaper rooms than can be found at the official Disney hotel to travelers using a search engine to plan their Disney World vacation. Grocery stores would risk liability for locating generic drugs or low-cost colas next to their brand-name counterparts. Critics would shy away from identifying a company using its mark. Writers of books, movies, and television shows would face potential liability for using titles or depicting products that evoke trademarks in the minds of consumers.11 And soccer fans would have to takePage 1673 off their pants.12 While big brands like Sony, Disney, and Coke might benefit, others would suffer: upstarts, low-cost competitors, sellers of complementary products, information intermediaries, and-most importantly for purposes of trademark law-consumers.

The costs of expanding the circle of trademark defendants are therefore quite substantial. The evolution of the trademark use doctrine reflects an attempt to ground trademark law in the kinds of claims it has traditionally countenanced, both by focusing its mission and by minimizing collateral damage from overly sweeping trademark claims. Despite what Dinwoodie and Janis claim, we do not view the trademark use doctrine as a panacea, a silver bullet, or a wonder theory. Indeed, as we explore in this Article, the trademark use doctrine has significant limitations that curtail its efficacy in marginal cases. Its real importance-and the place where the theory is gaining some traction-is in curtailing an utterly new form of trademark claim against parties that do not promote their own products or services under the protected mark. In this Article, we explore the theoretical and doctrinal foundations for the trademark use theory against the backdrop of the dominant economic model of trademark law.

The remainder of this Article will proceed in three parts. Part II situates the trademark use requirement within existing trademark doctrine. We contend that the trademark use requirement finds support in both statutory and case law. At the same time, Dinwoodie and Janis are correct to point out that neither judges nor scholars have yet articulated a satisfying definition ofPage 1674 trademark use.13 Instead of a separate element in a trademark holder's prima facie case, the doctrine has emerged as a series of defenses that protect certain types of non-trademark uses against claims by trademark holders. We propose a framework for understanding the trademark use doctrine. Because of definitional problems, we find it undesirable for the doctrine to play a role in all cases. Sometimes it is impossible to determine whether a defendant is using a mark to indicate its products' source or sponsorship without resorting to the type of consumer-perception analysis that sits at the core of the likelihood-of-confusion test.14 Its limited value in close cases, however, does not mean that the trademark use doctrine has no value in non-marginal ones. Rather than a "panacea for every ill afflicting trademark law,"15 the trademark use doctrine, properly applied, serves as a limited tool for identifying classes of behavior that cannot constitute infringement.

Part III addresses trademark use from a normative perspective. Without a trademark use requirement, we contend, trademark holders could severely limit a whole host of legitimate but unauthorized uses of their marks, particularly (but not exclusively) in the online context. The likelihood-of-confusion standard, moreover, has warts of its own that make sole reliance on it both problematic and costly. Part III concludes that a trademark use requirement is critical to maintaining the historical balance of trademark law, which aims to prevent specific instances of harmful confusion without casting the net so wide as to inhibit truthful, information-enhancing speech.

Finally, in Part IV, we address particular concerns that Dinwoodie, Janis, and others raise about the trademark use doctrine and its potential impact on both legal doctrine and the marketplace. Unlike them, we do not see...

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