April 14, 2008
"Trademark Use in Commerce" Revisited
By Eric Goldman
You may recall my repeated discussion about the trademark use in commerce doctrine. A quick recap: the federal trademark infringement statute references the requirement that the defendant make a "use in commerce" of the plaintiff's trademark. This language has triggered a lot of confusion. Some believe that the statutory language is simply a jurisdictional requirement (i.e., Congress can only regulate "interstate commerce"), while others believe that the language requires plaintiffs to show much more--such as the Rescuecom case, where the court kicked out the trademark infringement lawsuit against Google for selling keyword advertising because Google didn't make the requisite use in commerce.
I've previously blogged on some of the academic literature about the "trademark use in commerce" requirement, including articles by Dinwoodie/Janis and Lemley/Dogan, McKenna, Barrett and Widmaier. I've also written on the topic myself--see, e.g., here and here. Collectively, some academics (e.g., Lemley, Dogan, Barrett and I) are fans of the trademark use doctrine as a gatekeeping/boundary-setting doctrine and other academics (e.g., Dinwoodie, Janis, McKenna) are skeptical that it can/should play this role.
With the burgeoning literature, we really needed to gather as a community to discuss the issue in real time. We're very lucky that Mark Janis and Graeme Dinwoodie graciously convened a meeting of 16 trademark professors this weekend in Iowa City, Iowa. Iowa City isn't the easiest place to get to (especially when the FAA is grounding MD-80s and tornadoes are ripping through the Midwest), but the conversation and camaraderie made it worth the travel hassles.
I walked away from the event more convinced than ever that we have no chance of reaching consensus about the validity and meaning of the "trademark use in commerce" doctrine. We spent the weekend talking about statutory interpretations, the benefits of rules v. standards, whether trademark law preempts or codifies common law, how to reduce enforcement costs and errors, how to reduce consumer search costs, the many problems of understanding and measuring consumer perceptions and the "balloon-squeezing" problem of fixing one doctrinal problem only to put pressure on some other doctrine. These discussions pointed in lots of different directions, and there were no magic solutions.
At the end of the discussion, I had the opportunity to make some summary remarks. I made 3 points:
1) I think trademark law needs better boundary-setting and channeling doctrines, especially as we get away from the paradigmatic counterfeiting cases. Without such channeling doctrines, whenever a defendant is sued for some expressive activity that somehow references or invokes a third party trademark, trademark law lacks a limiting principle to kick out the case at the outset. Instead, the defendant must fit within various defenses. Some of the channeling defenses, such as functionality and genericism, work pretty well at redirecting cases out of trademark law and into other doctrines, but others don't, such as descriptive fair use and nominative use--both are limited doctrines, poorly understood and put the persuasive burden on the defendant.
The trademark use in commerce doctrine can serve the requisite channeling function, but it doesn't do it very well. But whether it's the trademark use in commerce doctrine or something else, we need some gatekeeping doctrine to trademark law!
2) As we get further away from counterfeiting, other doctrines--contracts, fraud, the FTC Act (and state law equivalents), various other consumer protection and false advertising doctrines--may do a better job of protecting consumers than trademark law.
For example, we need to retire the example of a consumer ordering Coke and the retailer silently delivering Pepsi instead from trademark law. This example is so distracting because we already know that the retailer can't do this--at minimum, such a delivery is a breach of warranty and perhaps even a fraud. Trademark law does provide producers with a remedy (more on this in a moment), but from a consumer protection standpoint, what does trademark liability add to the analysis? Personally, I don't think it adds much.
[UPDATE: James Grimmelmann offers a spirited defense of the "beverage substitution" example. FWIW, the other conference attendees jumped all over me as well by saying that this passing-off example was hard to distinguish from counterfeiting.]
3) In terms of providing producers with a policing doctrine, they typically have numerous doctrines beyond trademark law. However, I'm still stuck on the doctrinal inconsistency here. As I discuss in my forthcoming Brand Spillovers paper (my most recent slides), there is no concerted effort to impose trademark liability on retailers for auctioning third party trademarks or otherwise profiting from third party trademarks through practices such as couponing, shelf space adjacencies, loss leaders, upsells/cross-sells and geographic proximity to branded stores. But why haven't we had any conferences on the boundaries of retailer liability for these trademark practices? Why aren't retailers sued more under trademark law?
One answer (not the complete explanation, but nevertheless relevant) is that numerous doctrines control retailer behavior, including antitrust law, price controls, consumer protection doctrines and numerous retailer-specific rules. Accordingly, we don't need trademark law to police retailer behavior.
4) Conclusion: re-reading the Dinwoodie/Janis paper, I was struck by the pervasive feeling that we're asking trademark law to do too much when thinking that trademark law should regulate search engine ordering or curb information overload. But we're never going to reach consensus on trademark use in commerce as a gatekeeping doctrine given the statute's poor drafting. As a result, I think it's time for us to seriously consider a major redraft of the Lanham Act. After all, the statute has been on the books for over 60 years, and I don't think the law has aged well. Therefore, I propose that we commence working on the Goldman Act of 2025 (I'm just being realistic about the timing, and I'm happy to yield on branding if that will speed up a redraft) to update it for the modern era.
UPDATE: Mark McKenna has posted his own recap.
Posted by Eric at April 14, 2008 10:35 PM | Trademark
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