The Virtues and Vices of Clarity in Trademark Law

by David S. Welkowitz

Trademark law is unclear. This is not because the major statutes or even the common law principles are overly detailed or complex (although copyright is not immune to that problem), nor is it because the principles of trademark law are inherently difficult to understand. Trademark law is unclear because the governing principles are so broad and so full of multiple-factor balancing tests that giving clear advice about the likely outcome of a proposed use of something that may conjure a trademark, whether accidentally or purposefully, is very difficult. This is not startling news to anyone who has followed trademark law and trademark commentary recently. Trademarks are normally identifiers of the source of goods or services, yet they are much more than that. They are communicative devices. In the hands of their owners, they communicate an “identity,” a “brand,” or a set of feelings about the product or products associated with the trademark. In the hands of others, they are symbols to be commented on, parodied, or used as points of comparison or cultural concepts. In some cases, trademarks are independent products. However, not surprisingly, trademark owners would prefer to control the universe of communication emanating from the mark and the market over which the mark has influence. For a variety of reasons, vesting such total control in trademark owners would be socially undesirable. But the very lack of clarity in the law gives trademark owners the ability to claim, at least colorably, the right to enormous control over uses of their marks. There is no expedient, inexpensive way for others to test those claims; if a trademark owner threatens litigation, an early outcome is relatively unlikely, and even cases decided before trial may prove expensive.

If this lack of clarity is so problematic, why don’t we change trademark law and make it clearer? It turns out that clarifying trademark law is a difficult task. Moreover, clarity is not an unfettered good thing: even the clearest of laws can lead to bad results. The questions are how much clarity we need and how to best achieve it. There have been several attempts to add clarity to trademark law over the last quarter century; this article will examine some of those efforts, as a way of seeking a path out of the present clarity conundrum.

As has been well-chronicled, classical trademark law focuses on the likelihood of confusion. Were the issue of confusion confined to the point-of-sale¾whether the owner of trademark A was the source of goods B–then the lack of a precise method to determine the existence of confusion might not be a serious problem. Ordinary source confusion does not give trademark owners control over a wide spectrum of potential uses. However, trademark law has come to recognize many different kinds of confusion: confusion of sponsorship (even if A did not make goods B, A licensed or otherwise authorized the use); post-sale confusion (even if there was not buyer confusion at the point-of-sale, others, seeing the item, think A made or sponsored it); initial interest confusion (buyer at first thinks goods B are connected with A, but realizes the error before the sale and decides to buy goods B anyway). All of these are actionable as forms of confusion. The concept of a trademark has expanded to include the packaging and even the design of the product itself; the latter issue creates serious anti-competitive problems if we recognize a trademark monopoly in the product itself. And the issue of confusion is subject to what I will call the “circularity” problem. That is, actionable confusion occurs when a “significant” number of consumers (and this number can vary widely, adding an additional layer of opacity to the analysis) are confused. Although the law traditionally recognized that certain activities were not likely to lead to confusion, if a manufacturer can convince consumers that the law is other than it actually is¾say, that all uses of a trademark must be licensed–the law of confusion usually gives credence even to confusion born of a mistaken understanding of the law. Thus, trademark law is expanded and each expansion starts a new cycle of expanded trademark protection.

To make matters more complicated, courts have devised indirect tests to determine likelihood of confusion that balance six to ten factors, each of which is, in its own right, somewhat vague in content: the “strength” of the mark, the proximity of the products, the degree of similarity of the two uses, and so on.

Finally, more recently the law has recognized a greater form of protection called “trademark dilution” that is normally granted to owners of marks deemed “famous.” Unlike ordinary infringement, dilution dispenses with the need to show likelihood of confusion. However, dilution is itself a vague concept; it is not always clear what it is or what causes it. Furthermore, dilution is the subject of its own multifactor balancing tests.

This expansion of trademark law has led to a number of problems, three of which are of primary importance. First, because trademarks are communicative devices and cultural symbols, many unauthorized uses of trademarks raise serious free speech issues. For example, requiring a competitor to compare its goods to those of another without using the other’s trademark would be very troubling. Second, although there are recognized defenses to trademark claims, the existence of significant confusion tends to water them down. That is, even if the use is one that we value highly enough to exempt it from liability, courts will be hesitant to allow the application of the defense if the use also leads to a significant level of confusion. Because the level and even the existence of confusion is difficult to predict in advance, partly due to the uncertainties built into trademark law’s test for confusion, those who would engage in valued activity must do so at significant risk. Finally, it is very difficult to resolve trademark issues early in the proceedings, even if a well-recognized defense is available. Courts often state that trademark claims are particularly unsuited to summary judgment motions (to say nothing of motions to dismiss). Thus, anyone defending a trademark claim must be prepared for a long and expensive litigation. This gives trademark owners additional leverage to force settlements and licenses, even when the right to such licenses is highly questionable.

The question is whether–and if so, how–imposing greater clarity into trademark law can rectify these problems. The first step in answering these questions is considering the distinction between rules and standards, as well as the possible limits on clarity of language. This article examines the issue through the lens of existing attempts to make trademark law clearer. To begin, a discussion of some statutory attempts at clarity further indicates the difficulty of making trademark law clear and predictable. Starting with the Trademark Law Reform Act of 1988, continuing with the Anti-Cybersquatting Consumer Protection Act of 1999, and on into the Trademark Dilution Revision Act of 2006, Congress has (at the urging of interested outside groups) passed laws that amended trademark law, while also attempting to replace broadly written, common law-based principles with more specifically drafted statutory language. To some degree, these attempts at clarity have succeeded, but in many ways they have failed. Examining these attempts at clarity sheds some light on the magnitude and complexity of the problem. Because these attempts at clarifying the law have had very mixed results, this article examines an alternative to statutory precision: the use of presumptions in trademark law as a means of simplifying trademark litigation and making it more predictable. Several presumptions already exist in trademark law and will be discussed below. As will be seen, although presumptions offer some basis for clarifying trademark law, experience with existing presumptions suggests that they are far from a solution to the problem of clarity and predictability in trademark law.

 

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