Trademarks as a Media for False Advertising

Abstract

This Article explores an unnoticed aspect of trademark law which in some instances may constitute a license to cheat. It shows that under certain circumstances a seller can use its own trademark to mislead its customers, free from legal sanction, in contexts where the same behavior would be sanctioned if the seller used other advertising media. The Article then explores how an alternate conception of the economic function of trademarks can be used to understand the informational value of trademarks and their advertising function. After identifying circumstances appropriate for legal intervention, the Article concludes with a proposal for a new interpretation of the false advertising provision in the Lanham Act to eliminate this disparity.

Keywords: Fraud, False Advertising, Trademark Fraud, Fanciful Marks, Error Costs, Regulation of Information, Economic Analysis, Brands