Trademark as a Property Right

Abstract

Although trademark is a property right, the conventional wisdom among modern commentators and prominent judges is that it is only a regulatory entitlement that promotes consumer welfare. This essay fills a lacuna in modern trademark theory by identifying why nineteenth-century courts first defined trademark as a property right, and how this explains the structure of trademark doctrines today. The key insight is that a trademark is a use-right that is derived from and logically appurtenant to a separate and broader property right owned by a commercial enterprise — goodwill. Trademark thus shares many conceptual and doctrinal similarities to other use-right-based property rights that are appurtenant to larger estates, such as easements and riparian interests. This thesis is important, because it explains the nature and limits of this property right, such as, among other doctrines, why trademarks must be used in the marketplace, why trademarks cannot be separated from a commercial enterprise’s goodwill, and, perhaps most importantly, why trademarks are not full, independent property rights like a fee simple in land or title in a patent. The usufructuary nature of the property interest in a trademark thus clarifies what many scholars and judges view as its alleged doctrinal peculiarities. It is only because they have unmoored trademark rights from their original definition and justification as use-right property interests that they are themselves confused about trademark rights and the nature of the doctrines that define and limit its use in the marketplace.

Keywords: Law and Economics, Search Costs, Competition, Jurisprudence, John Locke, Joseph Story, Oliver Wendell Holmes, Richard Posner