Transcript Sakulin - Trademark Law Institute (TLI)

Rationales for the Protection of
Trademarks with a Reputation
TRADEMARK LAW INSTITUTE
‘The Protection of Trademarks with a Reputation’
15 October 2010
W. Sakulin
Institute for Information Law (IViR)
Universiteit van Amsterdam
Need for and (minimum) requirements of a rationale
2
 The need for a rationale



Trademark rights exclude third parties from
certain uses of trademarks
Interdependency in communication
Distributive justice – equal opportunities
 The (minimum) requirements of a rationale


A convincing reason for protection
Ability to determine the appropriate scope and
limitations of the rights
The Functional Approach
3
Source identification and product distinction
founction
2. Quality and guarantee function
3. Advertising function
1.
ECJ:



The essential function (1 and 2)
The other functions: communication, advertsing, investment
(3)
The Essential Function
4

ECJ 12 November 2002 Arsenal Football Club,
para 48:
“to guarantee the identity of origin of the marked
goods or services to the consumer or end user by
enabling him, without any possibility of confusion, to
distinguish the goods or services from others which
have another origin. For the trade mark to be able to
fulfil its essential role in the system of undistorted
competition which the Treaty seeks to establish and
maintain, it must offer a guarantee that all the goods
or services bearing it have been manufactured or
supplied under the control of a single undertaking
which is responsible for their quality.“
Economic Rationales
5
TM right to achieve an economic optimum


Existence & scope of TM rights only as far as benefits
outweigh costs
Remedying a market failure

1.
1.
High search costs
-> search cost rationale
Insufficient revenues to TM right holder
-> dynamic efficiency rationale
Economic Rationales
6
Source identification &
product distinction function
Quality and guarantee
function
SC rationale
Dynamic efficiency
rationale
Consumers / Society
Advertising function
?
Right holders
Economic Rationales – The advertising function
7
 Search cost rationale
 Blurring


Tarnishment


Depends on the definition of distinctive character and harm
Truthful information should be permitted
Free-riding

Not about search cost reduction – ECJ L’Oréal v. Bellure
 Dynamic efficiency rationale
 Does TM law have the aim to stimulate the ‘production’ of
trademarks with a reputation?
 “No economic harm in pure free-riding” Landes and Posner
Negative effects of protecting the advertising
function
8
 Negative economic consequences



Adverse selection by consumers – (tab water)
Inertia of consumers
Monopoly power & barriers to market entry (antitrust)
 The ‘freedom’ argument


“Consumers are free to chose the products they like – advertising
does not force products or services on them.”
-> Consumers need adequate knowledge of alternatives
 Possible negative social consequences



Directed against advertising
Promotion of consumerism
Promotion of stereotypes
Ethical Rationales
9

TM right as moral entitlement or reward

BUT always grounded in a framework of justice or
fairness
This implies mutual duties and rights of all people vis-à-vis
each other
Unjust enrichment
2. Lockeian Labour Theory
1.
Unjust Enrichment
10
 Basic principle of civil law
 Action of last resort
 Impoverishment
 Enrichment
 Causal link
 Unjust
 No other means of recuperation
 Does not fulfill the (minimum) requirements of a rationale
 What is ‘unjust’? Misappropriation/own efforts?


Not possible to deduce an indication for defining the scope of trademark
rights
If ‘unjust’ is defined in the negative i.e. “free competition must
remain possible”, then the application of economic theories seems
more appropriate.
Lockeian Labour Theory
11
 Based on a mutual “no-harm principle”
 A labourer owns his body and his labour
 He mixes his labour with objects from the commons
 The objects embody the labour
 Taking of the objects by others harms the labourer
 -> others have a duty to refrain from causing harm
Lockeian Labour Theory
12
 Application to trademark rights?
 physical labour / investment
 the commons / signs
 state of nature / monetary economy
 corn, apples / repute, distinctive character (in the mind of
consumers)
 Need to modify the original theory
 Investments
 Signs
Lockeain Labour Theory
13
 The object of protection must be the result of the
labour or investment


Trademarks with a ‘reputation’
Exclusion of alternative causes of reputation – Schechter(!)

What about reputation (ECJ Chevy), repute & distinctive character
(ECJ l’Óreal and Intel)?
 ‘Enough and as good’ must be left to third parties
 Results from the no-harm principle
Labour & ‘Enough and as good’
14
 No appropriation of descriptive or cultural
connotations,

e.g. Lief! (Sweet!) – Goldhase – Raffael’s Putti (A. Ohly)
 Room for descriptive, generic and referential uses
 3rd party uses need to remain ‘as good’(!) – ECJ Gilette
 Generic uses –use as product standard should be possible
 L’Oréal v. Bellure – enough and as good?
 Freedom of Expression
 Parody, criticism, artistic uses, educational use…
 Other social values
15
Thank You!
W. Sakulin
Institute for Information Law (IViR)
Universiteit van Amsterdam
[email protected]