Media Law Prof Blog

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Louisiana State Univ.

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Thursday, March 12, 2009

Trademarks as False Advertising

Shahar Dillbar, University of Alabama School of Law, has published "Trademarks as a Media for False Advertising," as University of Alabama Public Law Research Paper NO. 1351862. Here is the abstract.

This article explores an unnoticed aspect of trademark law which in some circumstances constitutes a license to cheat. Trademark law protects consumers against the seller who passes off his product as another's (inter-brand fraud). But it does not protect consumers from a seller that uses its own trademark to misrepresent its own product (intra-brand fraud). False advertising law protects consumers against intra-brand fraud, but only if the seller uses a descriptive term. This is the license to cheat: If a seller uses a non-descriptive mark to sell its product, no cause of action arises under the law of false advertising (because the mark is not descriptive) or trademark law (because there is no passing off). The article explores how an alternative conception of the economic function of trademarks can be used to understand the informational value of trademarks and their advertising function. After identifying circumstances appropriate for legal intervention the article concludes with a proposal for a new interpretation to the Trademark Act that addresses this troubling situation. law protects consumers against the seller who passes off his product as another's (inter-brand fraud). But it does not protect consumers from a seller that uses its own trademark to misrepresent its own product (intra-brand fraud). False advertising law protects consumers against intra-brand fraud, but only if the seller uses a descriptive term. This is the license to cheat: If a seller uses a non-descriptive mark to sell its product, no cause of action arises under the law of false advertising (because the mark is not descriptive) or trademark law (because there is no passing off). The article explores how an alternative conception of the economic function of trademarks can be used to understand the informational value of trademarks and their advertising function. After identifying circumstances appropriate for legal intervention the article concludes with a proposal for a new interpretation to the Trademark Act that addresses this troubling situation. Download the paper from SSRN here.

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