The Economic Effects Of Blurring On Well-Known Trademarks
Hello, this is Jenny Wung from TEIL Firms. In this independent podcast episode, I am going to share with you a part of my personal research on trademark blurring (for well-known trademarks). I was particularly intrigued by the effects trademark blurring brings regarding the distinctiveness of well-known trademarks. I believe that there is something related to consumer cognition of brands. I will discuss two empirical studies on brand and trademark dilution (namely, blurring, in this case).
Trademark Dilution consists of two principal harms: blurring and tarnishment. In this article, I will focus on the blurring of well-known trademarks and explore the economic effects of blurring on well-known trademarks.
"Blurring" is defined in US law as a single trademark being recognized by consumers as originating from two different sources. Typical trademark infringement usually involves consumers mistaking two similar trademarks for the same or related origin. In cases where trademark blurring may occur, the trademarks in dispute must have a certain degree of similarity, so that consumers think that the two trademarks are essentially the same trademark. Under EU law, the purpose of “blurring protection” is to prevent the dispersal of the identity of well-known trademarks that may result from their use in connection with irrelevant goods or services. The legal term used in the EU trademark regulations and directives is "detrimental to the distinctive character of the mark."
Scholar Sungho Cho proposed a study to examine whether the “dilute use” of the junior (less famous) trademark has a detrimental effect on the net brand value of the well-known trademark in terms of its brand image.
62 subjects (participants) were recruited from the classes of two sports management courses. Before the experiment, the participants had to complete an electronic questionnaire containing ten selected trademarks, which could measure the participants’ current personalities, attitudes, and interests toward brands. The participants had one week, under the condition of unlimited attempts to complete the questionnaire. They were then asked to comment on a “hypothetical scenario” of trademark dilution in an online discussion session. In this hypothetical scenario, ten sports-related well-known trademarks were being used by some “non-competitive” junior marks for unrelated goods and services. For each trademark that was possibly being diluted, the participants had to answer three open-ended questions. The questions for all ten trademarks must be completed within one week. A week after the questions for the ten trademarks had been completed, the participants were required to complete a post-experiment questionnaire. This experiment concluded the net brand value of most trademarks in the participants’ minds had significantly changed after the experiment. Interestingly, most of the trademarks scored higher after the experiment. Nevertheless, the "Marlboro" trademark scored lower post-experiment (but this difference is not statistically significant). Scholar Cho concluded from this experiment that the brand image of the well-known senior trademark may even be strengthened rather than weakened after the dilution incident. It can be inferred that the existence of trademark dilution may not cause substantial harm to well-known trademarks. To put it in other words, the nature of the hazard is not serious enough for judicial intervention.
Scholars Heald & Brauneis went to the yellow pages and newspaper advertisements and looked for the unconsented “trademark use” of well-known trademarks, attempting to find the answer to this question:
If a well-known trademark is shared and used without the trademark owner's consent, will it damage the economic interests of the trademark owner?
The two cited several long-standing prestigious trademarks as examples: Campbell for soup, Lipton for black tea, Ivory for soap, McDonald's for restaurant service, Quaker for oats, Planters for peanuts, and Tiffany for jewelry. Each of the aforesaid trademarks (names) is used in the Yellow Pages of California and New York by hundreds of companies; that is, the well-known trademarks were used by other businesses without the consent of the well-known trademark owners! The information obtained from the Hoovers Database also shows the same result, among which the Tiffany trademark is used by more than a thousand counts by an unauthorized user. Despite the unauthorized use by third parties, these well-known trademarks are still well-known (they are still famous or are still an indicator of superior goods or services in a market). Heald & Brauneis suggests that because consumers are capable of sorting information in their minds when exposed to trademark dilution; for example, “Buick” on aspirin will not lead to a reduction in the ability of the Buick trademark to identify a car with a certain quality. Thus, the market can afford a high level of brand sharing.
In conclusion, the more famous and familiar a trademark is with the consumers, the less it is susceptible to blurring. The value and quality the brand intends to convey have already been widely dispensed through broadcasting and promotion of the media and social media. Through experiencing or consumption of goods or services, brand awareness and brand image may already be deeply rooted in the minds of consumers. In addition, when consumers have the opportunity to repeatedly come across famous trademarks, continuous contact may result in the strengthening of impressions in the consumers’ minds of what kinds of goods/services these famous trademarks should be used on. When they see these trademarks again in the future, they can easily retrieve the information from the brain. Therefore, the more well-known a trademark is, particularly the one that is internationally well-known, the less vulnerable a trademark is to the unauthorized use of the trademark on completely unrelated goods/services. Therefore, the blurring of well-known trademarks (without consent) does not necessarily cause substantial economic harm to the owner of the well-known trademarks.