Wednesday, June 23, 2010
Trademark owners regularly rely on claims that the defendant is “free riding” on their mark by making money using that mark, foreclosing an opportunity for the trademark owner to capture that revenue. We analyze those free riding claims and find them wanting. The empirical data shows that defendants in unrelated markets can benefit from using a well‐known mark, but that neither mark owners nor consumers suffer any injury from that use. A legal claim that a defendant is unjustly benefiting by using a plaintiff’s mark is hollow unless it is accompanied by a theory of why that benefit should rightly belong to the plaintiff. And unlike real property, or even other types of intellectual property, trademark law has no such theory. The result is that free riding claims fall back on empty circularity. Those free riding arguments are - explicitly or implicitly - behind the most problematic expansions of trademark law in recent years. We suggest that trademark law needs a theory of trademark injury that distinguishes harm to legitimate interests the law should protect from a mere desire to capture a benefit enjoyed by another.
Download the paper from SSRN at the link.