Reverse Confusion and the Justification of Trademark Protection

Abstract

Theories of private law are dominated by welfarist normative frameworks, and trademark law is no exception. One such framework — the “search costs” theory associated with the Chicago School of law and economics — has long been the primary accepted justification for trademark rights. However, this theory fails to account for numerous features of actual trademark doctrine, as earlier scholarship has shown. This Article demonstrates how one underexamined area of trademark law — reverse confusion liability — is a similarly poor fit with the predictions and prescriptions of conventional economic theory. Plausible economic theories of trademark rights would either refuse to impose liability in reverse confusion cases or would limit a plaintiff’s recovery to damages. But in the actual cases, reverse confusion plaintiffs win broad injunctive relief, provided they can make particular showings regarding their defendants’ knowledge, intent, and relative economic power. These features of the doctrine are better explained by my own developing theory of trademark as promise, grounded in contractualist ethics. Before now, I have primarily used the theory of trademark as promise to model rights and obligations between producers on the one hand and consumers on the other; this Article uses reverse confusion doctrine as a lens through which to systematically extend its application to rights and obligations among competing producers for the first time. The result is a non-welfarist, contractualist account of trademark doctrine comprehensive enough to encompass the relationship between trademarks and unfair competition: a theory that is both descriptively more successful than extant theories and normatively at least as attractive. Altogether, the success of trademark as promise in a field enthralled with economic theory ought to convince us that greater normative-theoretical diversity in the analysis of private law and market institutions is warranted.