Trademark owners want to win from Congress a new kind of superprotection for supermarks. And they just may bring it off.
The basic federal trademark law has been in place for 40 years, and almost everyone involved in the business agrees that, with some imaginative interpretation from the courts, it is has worked pretty well. When the United States Trademark Association, an alliance of some 1,800 businesses that own trademarks, recently took a formal look at the state of trademark law, they came up with a long list of suggested amendments, but they add up to fine tuning, not to any radical rewriting.
The report was released last week. There was some internal dissent among the members of the USTA commission, which included representatives of such companies as General Mills, General Foods, Dow, Xerox, Walt Disney and AT&T. But if the coalition stays united behind the recommendations, chances are good that the House and Senate subcommittees that deal with trademark law will be receptive.
Trademark law seems to swing between two quite different rationales. One approaches the subject as a kind of consumer protection: a trademark tells shoppers who made -- or stands behind -- a product, and misuse of the mark is wrong because it misleads buyers. The other line of reasoning looks at a trademark as property, and at trademark law as a kind of antitrespass statute.
Not surprisingly, the trademark owners at USTA emphasize the property approach. They want, for instance, to add to the part of the trademark law covering unfair trade practices a new provision that would ban "disparagement and tarnishment."
Essentially, a federal trademark registration gives the owner the right to use the mark in a particular line of business. Nabisco owns the name Butterfinger for candy, and could probably keep a company from using it on some closely related product such as ice cream. It would have a hard time, however, stopping a furniture maker from using the brand.
Under the amendment USTA wants, if the unrelated use was something that might cloud the reputation of the candy bar -- say a line of leather bondage apparatus -- Nabisco could win an injunction against the marketer.
The association wants to go even further, however, for "a limited category of trademarks, those which are truly famous." In those cases, the proposed amendments would say that the owner of the trademark has virtually exclusive use of the name, even when there is no way that a buyer would be confused about who was making a product and no injury to the reputation of the trademark owner through association with questionable merchandise.
In the examples the commission gives, a company could be stopped from turning out pianos called Kodak or aspirin called Buick. This extra protection would be given the most famous marks -- those that "can fasten a lasting psychological grip on the public consciousness, generating consumer loyalty and good will" -- precisely because, the report notes, they are "most likely to be harmed by reduced distinctiveness."
In fact, such protection already exists in a spotty way. Some companies have been able to stop the use of their marks in unrelated fields, but only with some convoluted legal reasoning. "The cases are all over the map," says USTA Executive Director Robin A. Rolfe.
Moreover, 23 states have adopted a version of the National Association of Secretaries of State's Model State Trademark Bill that contains "antidilution" provisions.
But there's no national pattern. New York, Pennsylvania and Delaware have the legislation, but New Jersey, Maryland and Virginia do not. In the national version that USTA is backing, there would be a sliding scale of fame. Owners of famous trademarks for consumer goods would probably get exclusive rights to use them on any consumer goods.
"Thus, dilution could occur if the same mark was used on running shoes and chewing gum," the commission report says. But fame might be limited to a single market; the commission's example: a famous maker of microbiological chemicals might be able to stop anyone else selling to research labs from using the trademark, but could not enjoin a maker of fish oil sold only in the food processing business.
Even the owner of a mark earning this new protection would, under the proposed legisation, not be able to take it away from a company that had been using the same name in another line long before the famouse trademark became famous. But it would be fairly easy to win a case when the owner could show that a rival claimant had selected its trademark knowing the fame of the original brand.
A June 25 ruling by the Supreme Court may have upped the odds of getting such a measure through Congress. The case pitted the San Francisco sponsors of the Gay Olympic Games against the United States Olympic Committee, which stopped the gay group from using the word "olympic" in the title of its competition.
In ruling for the USOC, Justice Lewis F. Powell Jr. said there's nothing wrong in Congress granting a particular organization the exclusive use of a particular name. That sounds as though the justices would see no bar to a trademark law giving some companies the sole right to use a trademark which their own promotional efforts have made famous.Moskowitz covers legal affairs for McGraw-Hill World News.