Date22 June 2019
AuthorMcKenna, Mark P.
  1. Trademarks and Unfair Competition II. EVOLUTION OF TRADEMARK AND UNFAIR COMPETITION III. Consequences A. Claiming B. The Validity/Infringement Divide C. "Defenses" D. Remedies IV. WHAT TO DO? Let me begin by thanking Dean Kearney and Professors Boyden and Murray for inviting me to give this lecture. It is a wonderful privilege to give a lecture named after Judge Helen Nies, and I am particularly humbled to have been asked to join the group of really eminent scholars and practitioners who have given the Nies Lecture over the years.

    My talk today is going to focus on the relationship between trademark and unfair competition. As I was preparing the talk, I was delighted to learn about Judge Nies's career as a trademark practitioner. I had been quite familiar with Judge Nies and her contributions to patent law, and obviously, she sat on a court that also hears some significant trademark cases. But I learned from Graeme Dinwoodie's 2004 Nies lecture that for approximately twenty years prior to her judicial service, Helen Nies was a prominent practitioner of trademark law and even an Adviser to the Restatement (Third) of Unfair Competition, which was published in 1995, shortly before she passed away. (1) So I am happy that my topic today is a really appropriate fit with this lecture series.

    As I alluded to before, I am going to discuss the way trademark law has evolved over time with respect to property concepts. Let me try to give you a sense of what I mean by that.

    There has been a lot of discussion in the literature about the ways trademark law has come to treat trademarks as property. (2) Many scholars who have written about this "propertization" have described it as a shift from consumer to producer protection. (3) Once upon a time, the story goes, trademark law aimed to protect consumers against confusion. It gave producers a cause of action against others who used similar marks in ways that would confuse consumers--but it did so only because the producers happened to be well situated and highly motivated to vindicate consumer interests. (4) A number of modern doctrines (many of which allow claims based on much more attenuated forms of confusion or do not require evidence of confusion at all) reflect a problematic shift away from those consumer interests and toward protection of producer property interests. (5)

    I have written a lot about this narrative over the course of my career--I think it is overly simplistic, and in some ways, wrong. Trademark law has always protected marks as property and always significantly for the purpose of protecting producers. (6) What has changed is that modern law conceives of the property interests much more broadly than it once did. So the important shift in trademark law was not one from a system focused exclusively on consumer interests to one focused on producers, or from no-property to property--it was a shift in terms of the nature of the property interest protected. (7)

    But even that revised narrative misses some important things about trademark law's evolution because it is insufficiently attentive to significant changes in the doctrinal structure of trademark law over the course of the last century--specifically with respect to the relationship between trademark law and the broader law of unfair competition. Changes in that relationship, I will argue, did work a meaningful change in the "propertization" of trademark law. Relatedly, and necessarily, these same changes deemphasized legal rules that focused on the defendant's conduct (rather than the plaintiff's ownership interest).


    To understand the shift I am describing, we need to begin with a bit of history.

    The subject matter of trademark law was once defined in limited, ontological terms. (8) As the court explained in Davis v. Davis, "A trade-mark is some arbitrary or representative device attached to or sold with merchandise and serving to designate the origin or manufacture of that merchandise." (9)

    On that definition, a trademark was a certain sort of thing--a word or device (a logo or image) that unambiguously indicated the source of the goods with which it was used. It unambiguously indicated the source because it was a word (like EXXON) or a logo (like the Nike swoosh) that gave no information about the nature of the products with which it was used, so there was no way to understand it except as a source indicator. To take a modern example: it makes no sense to put the image of an apple on a computer--a computer is not made of apples, does not taste like apples, does not come from a place called Apple, etc. For that reason, the only sensible conclusion to draw about the image of the apple on a computer is that it must be a brand.

    In addition to being a certain sort of thing, a trademark also had to be used in a certain sort of way--separate from, (10) and affixed to, the goods whose origin the mark indicated. (11) Trademarks indicated the origin of goods; they were not themselves the goods.

    Only indicators that met those conditions were considered trademarks; only trademarks defined as such and used in interstate commerce were eligible for federal registration; (12) and only federally-registered marks could be enforced under federal statutory law. (13) Several types of indicators that modern law treats as trademarks under some circumstances (things like surnames, descriptive terms, geographic terms, and product packaging) were not considered trademarks under this more restrictive definition because the meaning of those things was facially ambiguous. (14) Those indicators could be used to indicate the source of goods, but they also could be used to communicate characteristics of the goods or other information about their origin. MILWAUKEE'S BEST, for example, might refer to a particular brand of beer, or it might just describe (in laudatory fashion) a company's beer as being the best in Milwaukee. (15) Because terms like these were facially ambiguous, they were not amenable to exclusive ownership and were therefore not considered trademarks.

    But the fact that trademark subject matter was narrowly defined did not mean that the law offered no protection against misuse of other sorts of indicators. Parties that did not own trademarks (or "technical trademarks" as they would come to be known) (16) could still bring common law unfair competition claims against those who, by means other than use of a trademark, attempted to pass off their goods as though they were the plaintiff's. (17)

    Because those unfair competition cases involved use of matter that had plausibly legitimate explanations, courts could not simply presume the defendant's conduct was illegitimate. As a result, courts typically required unfair competition claimants to prove that the defendant intended to pass off its goods as those of the plaintiff, or at least that passing off was the likely consequence of the defendant's conduct. (18) To make that showing, an unfair competition plaintiff necessarily had to prove that the defendant made some explicit misrepresentation or used some word or feature that consumers would associate with the plaintiff. Trademark claimants were not required to prove any of those things--source indication and intent to pass off were presumed. (19)

    Prevailing plaintiffs in unfair competition cases also got more limited remedies--remedies sufficient to prevent the passing off, but short of a prohibition on use of the term/feature. (20) As the court said in G. & C. Merriam Co. v. Saalfield, when an unfair competition plaintiff proves secondary meaning, there is a "conflict of right." (21)

    The alleged trespassing defendant has the right to use the word, because in its primary sense or original sense the word is descriptive; but, owing to the fact that the word has come to mean, to a part of the public, something else, it follows that when the defendant approaches that same part of the public with the bare word, and with nothing else, applied to his goods, he deceives that part of the public, and hence he is required to accompany his use of the bare word with sufficient distinguishing marks normally to prevent the otherwise normally resulting fraud. (22) Following this logic, courts would not have prevented other beer producers in Milwaukee from identifying their beer as being from Milwaukee or from claiming their beer was the "best." They would, however, have prevented those other producers from presenting that information in a way that suggested their beer was the same MILWAUKEE'S BEST that was sold by the company that had long been selling beer under the name MILWAUKEE'S BEST.

    To summarize: in this legal world that once existed, trademark and unfair competition were conceptually integrated but doctrinally distinct bodies of law. (23) They were conceptually integrated in that all of unfair competition law aimed to prevent passing off. (24) Imitation of another's trademark was just a special case of unfair competition because, as prominent nineteenth-century treatise writer James Love Hopkins said, use of another's mark "is the easiest method of stealing [someone's] trade, and most universal because of the general use of marks or brands upon personal property." (25) It was in this sense that trademark law has always been regarded as part of the "broader law of unfair competition." (26)

    Trademark and unfair competition were doctrinally distinct in that trademark law dealt with misuse of the subset of indicators that qualified as trademarks under the prevailing, limited definition, while unfair competition was a residual doctrine that dealt with attempts to pass off by other means. (27) These claims were meaningfully different in that unfair competition claimants faced more onerous proof requirements and their remedies were more limited.


    The legal structure I have just described largely held through the middle of the twentieth...

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