Trade Emblems

• Publication year: 2021

76 Nebraska L. Rev. 95. Trade Emblems

95

John T. Cross*

Language and the Law: The Special Role of Trademarks, Trade Names, and Other Trade Emblems

TABLE OF CONTENTS

I. Introduction 96

II. Trade Emblems as Language 99

A. How Trade Emblems Convey Information 99

B. The Various Messages that a Trade Emblem May Convey 102

1. Denominative Message 103

2. Associative Message 104

3. Descriptive Message 106

4. Allusive Message 107

C. Evaluating the Law of Trade Emblems in Light of
the Principles of Language 109

1. The Basic Paradigm: Exclusivity in Trade Emblems 110

2. Basic Rules 112

a. Emblems That Can Be the Subject of Exclusive Rights 112

b. Seniority and Ownership 115

c. Categories of Trade Emblems 116

d. Defining the Market Itself: Geographical Limitations 121

96

e. Infringement 123

III. Applying the Principles of Language: Problem
Areas in the Use of Trade Emblems 125

A. False Advertising in the Use of Trade Emblems 125

B. Trade Emblems as Warranties of Quality 131

1. What a Trade Emblem Says About Quality 131

2. Increasing Quality 133

C. Borrowing a Foreign Term as an Emblem 137

D. Dilution 141

E. Succeeding to Trade Emblem Rights 146

F. Reversing the Law's Priorities: The Problems of
Reverse Confusion and Reverse Passing Off 148

1. Reverse Confusion 149

2. Reverse Passing Off 150

IV. Conclusion 153

I. INTRODUCTION

In 1979, the United States Supreme Court decided Friedman v. Rogers, a case involving a First Amendment challenge to a Texas statute that prohibited optometrists from practicing under an assumed trade name.(fn1) Although an important case, Friedman certainly is not one of the major milestones of First Amendment jurisprudence. Prior Supreme Court decisions established that although commercial speech is protected by the First Amendment, government may regulate speech to prevent deception or confusion.(fn2)Because a majority in Friedman found a possibility of deception, the Court held that Texas could constitutionally prohibit the use of a trade name.

Friedman becomes much more interesting if one considers what the Court is saying about trade emblems.(fn3) The Court did not simply find that the particular trade name used by the optometrist was mis

97

leading.(fn4) Instead, it held that all trade names have an inherent capacity to deceive.(fn5) Texas could therefore enact a blanket ban on all trade names without having to demonstrate whether a particular name might be misleading.

The suggestion that all trade emblems are potentially deceptive clashes with a basic precept of intellectual property law: trade names and other trade emblems help to reduce confusion in the marketplace. Admittedly, trade emblems often are used as instruments of deception. Case reports are filled with situations in which one company uses a competitor's trademark or trade name to pass off its goods to unsuspecting buyers. The current legal rules, however, are designed to prevent, not foster, this sort of deception. A party with a protected trade name can utilize the courts to thwart any impostors. By denying optometrists their ability to use trade names, the Texas statute may have removed a very important control, thereby resulting in more, rather than less, deception.(fn6)

Deception is a failure of communication. And communication ordinarily is carried out by means of language. When buyers and sellers communicate in the market, they make extensive use of trade emblems as part of their language. A trade name is much more than a simple identification badge that allows people to distinguish sellers. It is instead an entire array of different messages, all condensed into a single word, a short phrase, or a symbol. Those myriad messages comprise the definition of the trade emblem. A potential for purchaser deception exists whenever any of these messages contain false information. What makes Friedman noteworthy is the majority's recognition that even when a trade emblem correctly names the source of goods or services, it can still contain false and deceptive information.(fn7)

Acknowledging that trade emblems serve as "words" in the lexicon of the market forces one to view the law governing trade emblems in an entirely new light. Most attorneys perceive of trade emblem law as

98

occupying a distinct niche in the realm of intellectual property law. Its closest jurisprudential cousins include copyright, patent, and misappropriation. Like these areas, the main concern in trade emblem law is how to allocate the intellectual property rights among various contenders.

Lumping trade emblem law with the other areas of intellectual property law is nearsighted, however. The law of trade emblems actually forms part of the much broader and more difficult question of how the law should interact with language. Although the law usually does not purposefully interfere with language, exceptions exist. The most common exception allows the law to interfere when speech is used to deceive. The law of trade emblems is therefore merely one of several means by which the law regulates the truth of language in the marketplace.

Of course legislatures and courts frequently recite the mantra that one of the main purposes of trade emblem law is to prevent consumer deception. Governing statutes do contain certain rules that directly serve this end.(fn8) In practice, however, this ideal tends to be overlooked. Most of the judicial and legislative debate focuses on defining the rights of the sellers, not on the effect that various contending rules will have on the efficiency and accuracy of communication in the market.(fn9)

The rules of trade emblem law need to be reevaluated to determine whether they are effective rules of language. A language approach suggests that the primary focus of the law should be the overall process of communication, not merely one of the communicating parties.

99

The law should abandon its traditional "intellectual property" paradigm, which concentrates on allocating rights in creations, and should substitute a paradigm with a core principle of preventing deception. This new paradigm may, in turn, result in some changes in the governing law.

Part I of this Article addresses whether the basic principles of trade emblem law make sense as rules of language. Although the new perspective certainly requires a rethinking of the existing rules, Part I demonstrates that most of the basic principles are valid as rules of language. The linchpin of the entire system-the grant of exclusive rights to one seller-will generally encourage efficient communication and limit deception. Similarly, the rules of priority, registration, and infringement serve these same ends.

Part II explores some of the more difficult questions of trade emblem law, such as dilution, reverse palming-off, and succession to rights. It is here that a language-based analysis has the most to offer. Much of the current confusion is created by legislatures and courts that have not fully recognized that trade emblems convey several distinct messages. Recognizing the multiple messages in a trade emblem makes it possible to take a reasoned approach to these difficult issues. This reasoned approach, in turn, reveals significant flaws in the current rules.

Much of the discussion in this Article emphasizes United States trademark law. The analysis is not limited to trademarks, however. The principles of a language analysis fully apply to service, collective, and certification marks, and in large part, to trade names. Further, a language analysis is confined neither to the United States legal system nor the English language. It extends to all legal systems that follow the basic model of providing exclusivity in trade emblems.(fn10)

II. TRADE EMBLEMS AS LANGUAGE

A. How Trade Emblems Convey Information

A market can function effectively only if purchasers can make informed choices. Most purchasers are not armed a priori with perfect knowledge about the goods and services that they are considering. Purchasers must instead obtain that information by inspecting the commodity and communicating with the potential seller or with third parties.(fn11) In most cases, it is quite costly for the purchaser either to

100

undertake a comprehensive inspection or to engage in an in-depth conversation with the seller.(fn12) The market can function more efficiently if sellers have a shorthand way of communicating the standard information that purchasers need to make an informed choice. Trade emblems constitute one of these shorthand methods.(fn13)

Trade emblems often are defined as words or symbols that identify a particular seller.(fn14) Identifying the seller is an important consideration and has been recognized by societies throughout history.(fn15) Yet identifying the seller is by no means the sole function of a trade emblem.(fn16) Most shoppers in today's vast national economy do not know personally the source of the myriad goods and services they purchase. Therefore, most purchasers are not motivated by any sense of per

101

sonal friendship with the companies that provide products.(fn17) Instead, the main motivations usually include the impersonal factors of price and quality.

This does not mean that purchasers have no interest in knowing the source of what they are buying. Their interest is more than mere curiosity. Identifying the source of a product provides purchasers with a great deal of other relevant information.(fn18) First, such information reveals available recourse options should the product fail to perform as expected. Second, and more importantly, distinguishing various sources helps shoppers choose among competing products. A shopper may have had an experience, either good or bad, with...