Is Trademark Dilution a Unicorn? An Experimental Investigation
47 Pages Posted: 29 Apr 2017 Last revised: 9 May 2017
Date Written: April 28, 2017
Significant resources are devoted to litigating a concept known as trademark dilution. Dilution involves situations where an entity other than a trademark’s original owner uses a brand name or logo in a way that weakens the strength and distinctiveness of the original mark, even when no confusion occurs. It is unclear, however, whether trademark dilution actually exists. The best evidence that it does comes from a set of studies showing that respondents are slower to match brands to their product categories and product attributes after being exposed to an advertisement for a different product using the same or a similar brand name. This article casts doubt on the construct validity of these reaction time studies. Through a series of new experiments, we argue that what prior reaction time studies reported as evidence of trademark dilution is actually the artifact of a flawed experimental design that fails to control for the effect of seeing a surprising advertisement. Our findings lead us to conclude that like the proverbial unicorn, dilution is theoretically plausible, but remains empirically unproven.
Keywords: trademark, dilution, experiment, law and economics, experimental economics, behavioral economics
Suggested Citation: Suggested Citation