43 Pages Posted: 6 Aug 2012 Last revised: 11 May 2013
Date Written: August 6, 2012
A number of scholars have recently critiqued the traditional search-costs model of trademark infringement doctrine and have proposed alternatives driven by consumer decision-making theories and contractarian understandings of trademarks. While I agree that the search-costs model is problematic in parts, some of the other suggested frameworks suffer from difficulties of their own. For one, these alternative approaches draw up a dichotomy between “pure” experiences of trademarked goods as opposed to “altered” experiences, with the latter representing the mindsets of consumers after trademark owners have influenced them via advertising and other devices in an effort to build up goodwill. This Article posits, however, that this binary setup most reminiscent of the decision between the red pill and the blue pill in the movie The Matrix — with one standing for the “truth” about trademarked products and the other a “fake reality” filled with manufactured perceptions about goods — is a false choice. Indeed, in today’s world, many goods and their brands have become inextricably tied with one another and consumers experience the two together. In that sense, it is not necessarily relevant whether consumers prefer Pepsi to Coke when no labels are attached because we may actually be interested in human experience and level of hedonic benefits as a whole, and labels do enter that holistic perception. Hedonic harms to consumers, should they be of sufficient magnitude, could prove significant for doctrines such as dilution and post-sale confusion because intellectual property may become rivalrous and consumers’ experience of the original goods has the potential to suffer even when search costs do not increase. In short, the model presented here tries to resolve the tension between the information transmission conception of trademarks, which seeks to protect consumers from deception, and the misappropriation theory, which focuses on producers’ investments in goodwill. This Article shows how a robust trademark system must account for the possibility that producers serve as providers of hedonic values to consumers. A trademark system that seeks to maximize global hedonic and economic utility would need to include First Amendment-based safe harbors such as criticism and parody. In this context, deeper empirical exploration of hedonic trade-offs is likely to become an important source of information in drawing the contours of trademark law.
Keywords: intellectual property, trademarks, infringement, dilution, search costs, hedonic psychology, well-being analysis, law and happiness
JEL Classification: O34, K30
Suggested Citation: Suggested Citation