Merchandising Rights: The Possibility of Full Integration into the Trademark System

Abstract

Trademark merchandising offers not only an effective marketing tool and a profitable commercial practice but also a huge legal uncertainty for involved parties. To deal with that uncertainty, Calboli has already proposed a solution that includes affording trademark protection to marks used on merchandise and shaping that protection (merchandising rights) by existing norms of trademark law (‘The Case for a Limited Protection of Trademark Merchandising’ (2011) 865 U of Illinois L Rev 865, 906). That proposal, if workable, may limit the application of the US state laws or EU Member States’ unharmonized laws, which significantly vary today, to merchandising disputes, and avoid the necessity to introduce sui generis rights for merchandising.

The aim of this thesis is to test how that proposal will work in reality, specifically whether, and to what extent, merchandising rights can be integrated into US federal trademark law and EU harmonized trademark law. To that end, first, I analyze the proportionality of merchandising rights in achieving the goals frequently mentioned by the advocates, and the philosophical compatibility between merchandising rights and traditional trademark law. Second, I examine how the existing theories in US and EU trademark law interact with merchandising use. I find that what pose the most significant obstacles to the proposed integration are the aesthetic functionality theory and, exclusively in the US, the trademark use requirement, both of which remain ambiguous and inconsistently applied. There are material risks that they will rescue unauthorized merchandising use from the trademark law domain altogether if the distinctive characteristics of merchandising fit their criteria regardless of facts. Finally, I suggest some measures courts and legislators in both jurisdictions may take to facilitate the integration of merchandising rights into trademark law. It should be reserved that this thesis does not aim to bring justice to merchandising disputes or to solve every problem that may arise when applying trademark law’s existing theories to merchandising disputes.

Keywords: Trademark, Merchandising, Trademark Use Requirement, Aesthetical Functionality, Fair Use, Freedom of Expression, Actionable Use, Actionable Confusion, Substantial Value, Misappropriation, Dilution, Quality Control, Function Theory