Trademark Dilution - Coursework Example

A sobering statistic in as far as avdvertising and dilution are concerned is that ‘according to one estimate around 60 percent of all advertisements are at least indirectly comparative in the sense that it relates to another firm’s product’. This is a baffling statistic. It is easy to resign and say that dilution seems like a necessary part of successful advertising. But several countries are trying to sift through this mess so as to re-define the meaning of dilution even in this challenging context. The E.U seems to have led the way with a demarcation of advertising into misleading advertisisng and comparative advertisisng (Hackner, J.

& Muren, A., 2004). There is the economic angle that is challenging to deal with. Without such laws, there will be rampant dilution which shall eventually in the companies that spend the most on product research stopping to do so but insead seeking to improve on their rivals products and therefore abandoning research altogether. One of the commonly agreed issues in this light is that dilution has little welfare goals in mind. Even more surprising however is that dilution offers little benefit to both the company using it and even the company on which it is targeted.

This is under Bertrand competition. It even states that the profits and prices for both firms decrease. This might be the case but it might be designed to tame runaway leaders. By bringing their prices lower to the prices of similar products across the board, those using dilution might therefore be seeking to ‘level the playing field’. There has also been a laser like focus on dilution especially the fact that it seeks to bring lower quality goods to the level of higher quality goods. It is worth noting that the converse is also true.

Dilution is also designed to lower the quality of the high quality goods. By close association with these ‘pretenders to the throne’, high quality goods can similarly be poorly