Consumer Investment in Trademarks

BY Deborah R. Gerhardt

To protect the interests of trademark owners in many new contexts, trademark law has expanded and uprooted the doctrine from its policy of protecting consumers. To facilitate this expansion, consumer interests are often ignored or manipulated to conform to the interests of mark owners. This Article introduces consumer investment in trademarks as a model to bring public interests back into trademark doctrine. The model demonstrates that because consumers invest marks with meaning and value, they deserve a return. Drawing on literature from the social sciences, this Article illuminates the many ways in which consumers contribute to the success or failure of marks and actively use them to express themselves and find information. In view of this research, this Article advocates rejection of the doctrinal assumptions that trademark owners are solely responsible for trademark value and that consumers are mere passive recipients of information about marks. Instead, trademark law should acknowledge that consumers have also invested in marks, and it should therefore weigh the public interest in using marks as information tools when deciding trademark matters. By adopting the model’s broadened view of how consumers use brands and contribute to their meaning, trademark law can take into account actual consumer interests.

Next, the discussion turns to practical applications. Use of the consumer investment model would keep trademark doctrine on a principled path that preserves the public interest in using marks as information tools. The model offers a new way of examining difficult issues involving the unauthorized use of brands on the Internet. Specifically, in keyword advertising disputes, the model would prompt courts or Congress to weigh public informational interests when considering how much control mark owners should exert over their brands on the Internet. However, as technology advances and new uses for marks evolve, the model would not block trademark expansion. It simply would provide a constant reminder to consider public interests. For example, the model generally supports dilution protection for famous marks. However, this Article introduces “cultural dilution” as a type of lost distinctiveness that should be exempted from trademark protection. Cultural dilution occurs when consumers invest a famous mark with new meaning through viral means that brand owners cannot stop. Finally, this Article recommends creation of a safe harbor for reference materials to reflect actual consumer understandings of terms that also serve as brands. Application of the consumer investments model in these contexts and others would assure that actual consumer interests are weighed in trademark disputes that affect public access to information.

DOWNLOAD PDF | 88 N.C. L. Rev. 427 (2010)