Unbranding, Confusion & Deception
46 Pages Posted: 23 Jul 2010 Last revised: 27 Mar 2011
Date Written: July 22, 2010
This Article addresses the phenomenon of unbranding. Unbranding occurs when a firm chooses to discontinue its use of a brand that has developed negative associations among consumers in favor of a new brand, often in hopes of escaping the consequences of inferior products or illegal activity. Companies like AIG, Blackwater, Philip Morris, and WorldComm have all employed this strategy in recent years.
Unbranding represents a striking departure from branding orthodoxy, which stresses the maintenance of brand equity through the gradual evolution of a brand. After examining the factors that prompt firms to take the radical step of eliminating an established brand, this Article considers two legal regimes for restraining unbranding in the name of consumer protection.
The first is trademark law. Despite the fit between the potential harms of unbranding, namely consumer confusion and increased search costs, and the established rationales for trademark protection, this Article concludes that trademark doctrine is structurally incapable of fully addressing the threat of unbranding because of its focus on inter-brand confusion. The second and more promising approach relies on the rubrics of false and deceptive advertising. Both section 43(a) of the Lanham Act and section 5 of the Federal Trade Commission Act provide a legal basis for targeting unbranding. Ultimately, this Article concludes that because consumers lack standing and competitors often lack sufficient incentives to sue under the Lanham Act, the FTC is best positioned to protect against the harms of unbranding.
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