The Apparent Manufacturer Doctrine, Trademark Licensors and the Third Restatement of Torts
60 Pages Posted: 5 Mar 2008
In the past fifty years, there has been increased licensing activity and trademark licensing has become the favored method of producing and advertising goods both nationally and internationally. Numerous businesses use licensing arrangements to produce and sell a variety of consumer and industrial goods. For example, Coca-Cola licenses its mark not only to bottling companies, but also to clothing manufactures.
Despite this increase in licensing activity, courts have not developed coherent laws and regulations to address whether trademark licensors should be held vicariously liable for defective products that are produced by their licensees. In response, this Article explores whether a trademark licensor should be held liable for its licensees' products when the licensor, by placing its name or mark on a product, induces consumers to purchase the product in the belief that the licensor made the product or otherwise vouched for its safety.
Specifically, I argue that trademark licensors should be liable under the apparent manufacturer doctrine in two particular situations namely (1) when they induce consumers to believe that they manufactured the product or (2) dictated the standards for manufacturing of their licensees' goods. Second, I argue that the manufacturer doctrine should be limited to certain situations where the plaintiff has to prove that they reasonably relied on the trademark. Third, I also argue that licensors should be permitted to rebut this presumption and defeat liability by showing that the consumer did not rely. Fourth, the trademark licensor may also be absolved of liability by using appropriate product labeling to negate the impression that they manufactured the product or dictated the product specifications.
Keywords: apparent manufacturer doctrine, trademark, licensors, third restatement of torts, licensing, vicarious liability, defective products, safety
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