History and Current State of Trademark Dilution - Essay Example

Trademarks are the identifying feature of any company. The trademarks help us identify companies and the products that they deal in so that they can be able to curve a niche for themselves in the market. Their protection had therefore over time been very paramount. This aggressive protection has especially become even more important lately. It’s not uncommon nowadays to hear of Apple Corporation complaining for instance about ‘copying’ of its products and survives. This has led several companies to secure patents to every product that they manufacture. As a result brand identity is an important part of the company. There comes a time however, when newer companies secure trademarks that are almost identical to those that are already more established. Think of a scenario for instance where two or more schools share the same uniform. This interference with trademarks can be called by different names but the most relevant to the topic we are about to discuss is dilution. Dilution was the subject if great controversy at the time of its founding. The idea is that there are large companies that wish to protect their already established trademarks. Therefore the best thing for them is to support the passing of dilution clauses into law to deny newer entrants the opportunity to try and make money from establishing their trademarks along the standards already set by the established brands. The flipside of this argument is that the large brands are themselves trying to dim the extent to which trademark law should run so as to benefit from the very practices they are restraining their rivals from. This paper shall seek to study the history and current state of trademark dilution. There shall be case studies that are analyzed so as to show how trademark dilution has evolved through rulings and also legislation. Another important aspect of trademark dilution is whether or not in reality, trademar4ks prevent such uncouth behavior as the industry is trying to prevent. Of course it is one thing to cry foul about trademarks and quite another to establish their effectiveness. The reason why this is the case is primarily because creative departments in companies develop novel means to reciprocate the efforts and products of other companies. Trademark dilution is the United States for instance is a fairly recent phenomenon bearing in mind that the necessary legislation was passed in 1995. That was the year that the Federal Trademark Dilution act was passed. It sought to protect large companies against the ‘gradual whittling away’ of renowned brands by new entrants. On one hand this might have been seen as an effort to protect big business at the expense of upcoming businesses. It is also a huge coincidence that the first corporation that sought the favor of this new law was Victoria’s Secret. This, as the more fashion conscious will note, is a famous fashion brand. One of the few that had spread its wings abroad at this time. The aggressors were a couple, the Moseley’s who had committed the unforgivable act of opening a clothing store in Kentucky called ‘Victor’s Secret’. The more renowned company warned them off such a store name but only succeeded in making them change it to ‘Victor’s Little Secret’. This still fell short of the demands of the renowned retailer who thought a complete change of name was the only way out. As happens in all cases of this kind, the matter ended up in court. In the Sixth Circuit it was agreed that there was possible dilution in this case. There were the usual exchanges associated with lawyers in such cases where the law is not very clear, with each side giving its own interpretation that was friendly to its client. However, the most important point to note was in the argument put forward by Moseley’s lawyer. The lawyer insisted that the fashion giant must table actual ‘economic harm’. Therefore, the whole business of trademarks is the prevention of any likely economic harm. It must be said that this is a difficult case for the fashion giant to argue out because they are competing with a very small store whose influence on the market might be very limited. At this point it is very important for me to mention that there are several functions that trademarks perform. One of them is the economic function mentioned above. As far as money is concerned. Trademarks seek to limit the sort of confusion that could lead to one company losing money to another. If I may cite another case involving a giant company and a smaller company, Adidas and a Chinese company called ‘Adibas’. It is clearly very easy to confuse the former for the latter. SAs a result a customer will end up buying from the Chinese firm at the expense of the German firm. Other functions of trademarks shall be mentioned as they arise. Another function of trademarks is the identification function. Strasser actually decides to split this function into two parts. On one part there is the product-identifying function while on the other there is the source-identifying function. This distinction is one of the most important things discussed in this paper so I shall seek to illustrate. Using the Victoria’s Secret case, the product identifying function is of more benefit to the customer. For instance someone wishes to buy a special present for a loved one. They have in mind that specific product too and it’s available in Victoria Secret stores. They however happen to pass through one of the local stores and come across the ‘same’ product. Unbeknownst to them they end up buying an item from ‘Victor’s Secret’. In this way they do not the value that they anticipated. The main reason is that they could not identify the product properly. If certain products were available in certain stores, this confusion would not have arisen. In this case it’s the customer who loses. In a similar instance, someone wishes to buy a clothing item for a loved one. They pass around town and come across a shop labeled ‘Victor’s Secret’. They are very attracted by the prospect of finding a nice item because in their mind they are confusing it for ‘Victoria’s Secret’. A purchase is made and the realization that they might have shopped in an unintended store either dawns on them later or doesn’t at all. This is where the source-identifying function of trademarks sets in. They seek to protect sellers from such ‘mis-identification’ that might over time impact on the company’s bottom line. Strasser also identifies the communication function. A keen reader will notice the close linkage between the identification function and the communication function that is to be discussed here. The similarity here is that poor communication, or should I say deliberately poor communication, occasion’s poor identification. As a result therefore of one brand making itself very similar to another, a buyer might end up buying the wrong product. Strasser suggests that the more the information that is available to the customer, the less the likelihood of trademark dilution and therefore identifying the wrong product. There are two distinguishing features that can separate two products in the absence of clear cut trademarks. These two have to do with pricing and quality. The former can be manipulated in a case where products with closely resembling trademarks also cost the same. The latter is more reliable; however, the fact is that one can single out the quality of a product only after they have used it. This might make first time buyers susceptible. Lastly, Strasser discusses the intrinsic or advertising function that trademarks carry. On the intrinsic function Strasser states the ‘trademarks are capable of emancipating themselves from the products in connection with which they are used’. In this case, the advertising promises much more than is available in the product. This is not to suggest that somehow there is an element of ‘overpromising and under-delivering’. It’s more like the other way round. A trademark can therefore be removed from the product in the case that when it is mentioned other things come to mind for instance quality or durability. This is perhaps one way that the trademark ‘energizer’ was co-opted when describing a tireless person as an ‘energizer bunny’. This discussion of trademarks cannot end without assessing their effectiveness. Trademarks indeed are very useful in many ways. They might however not be as effective as we would think of them. Think of the two Smartphone makers, Samsung and apple. Recently they have been involved in the most vicious battles involving trademarks and intellectual property. Apple was the first of the two to make forays into this market. The company distinguished itself for its products with large screens and several applications. Samsung matched this by producing their own products with the same descriptions. In this case, a trademark cannot cover an entire field. There are still many opportunities for rivals to attack its bottom line. Trademarks also harbor the ability to limit competition. If we look at it dispassionately, trademarks should cover as limited an area as possible so as not to curtail the efforts of those who would certain designs or ideas to produce even better products. Clearly, this is not the case now. Therefore it’s very clear that the value of trademarks must not be diluted. Companies are very keen on protecting their trademarks for various reasons. Those reasons are mostly economic. However, as we have realized trademarks also have a communication function, an identification function and they also reflect upon the reputation of the company. Worth noting however, is that trademark dilution affects us too as consumer. In the case of severe dilution, we can end up reading all the wrong messages and therefore end up purchasing an un-intended product. That way we can end up losing money. Therefore we have an economic state as far as trademarks are concerned. Read More