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Against Monopoly

defending the right to innovate

Monopoly corrupts. Absolute monopoly corrupts absolutely.





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Trademark Ain't So Hot Either...

David--sure, it is understandable why you are "much more favorably inclined towards trademarks than other forms of intellectual property." As you say, "It seems to me a good thing that it is possible to tell who you are doing business with, and no downside monopoly". As I noted here, the primary justification for trademark rights is based on the notion of fraud--that the "infringer" is defrauding his customers by misrepresenting his identity and the source of the goods being sold (see pp. 43-44 of my Against Intellectual Property, pp. 59-63 of Reply to Van Dun: Non-Aggression and Title Transfer, p. 34 of A Theory of Contracts: Binding Promises, Title Transfer, and Inalienability).

But this analysis would give a cause of action to customers, however, not to the holder of the mark, who is not defrauded. Moreover, it would protect the customer only when there is fraud. For example, neither the customer (nor Rolex) should be able to sue Rolex knock-off companies, because people who buy fake Rolexes for $10 are not being defrauded. They know they are buying a cheap knock-off. But trademark law does give trademark holders--not customers--the right to sue infringers, regardless of whether there is really fraud to the consumer.

So while we can condemn fraudulent sales to customers, this is not what modern trademark law prevents. Modern state-run trademark law is almost as bad as cpoyright and patent, even if it has a less-objectionable core or origin. The fundamental problem with trademark law is that it is state law--it is created and administed by the state, which is a criminal organization. To expect justice from the state is like expecting a cat to bark.

Thus we have trademark rights granted to trademark holders, instead of to customers, the real victims of fraud. Thus we have a statutory scheme establishing an arbitrary, artificial legal system and an inept bureaucracy to construe and enforce it. Thus we have ridiculous extensions of trademark to cover "anti-dilution" rights, much as the term and scope of copyright and patent are gradually increased over time. And thus we have the government's courts used like trademark's more infamous cousins, copyright and patent, to stifle competition and squelch free speech. See, e.g., A Bully-Boy Beer Brewer, Straight Talk; 9th Circuit Appeals Court Says Its Ok To Criticize Trademarks After All; Trademarks and Free Speech; Beemer must be next... (BMW, Trademarks, and the letter "M"); Hypocritical Apple (Trademark); ECJ: "Parmesian" Infringes PDO for "Parmigiano Reggiano"; Engadget Mobile Threatened For Using T-Mobile‘s Trademarked Magenta.

Clearly, this is just another example highlighting why the state is worse than useless; it is a harmful criminal organization.

And in fact, US trademark law is unconstitutional. While the US Constitution, to the extent it is legitimate and not just the de facto result of a successful coup d'etat, unwisely authorizes Congress to enact copyright and patent law, no provision is made for trademark law. Instead, trademark law is based on an unconstitutionally expanded reading of the Interstate Commerce clause. As James J. Kilpatrick noted in The Sovereign States: Notes of a Citizen of Virginia, in describing the Supreme Court's illegitimate expansion of power under the guise of the Constitution's interstate commerce clause:

It was an insidious process, conducted with the care of the cat that stalks her prey - now creeping forward, now pausing to sniff the air; now advancing, now lying still as the bird takes alarm; then edging forward again, and so, step by inexorable step, moving to the ultimate seizure.

But it started at the very beginning of the United States. Tom Dilorenzo, in The Founding Father of Constitutional Subversion, explains:

"Hamilton was also likely to be the first to twist the meaning of the Commerce Clause of the Constitution, which gave the central government the ability to regulate interstate commerce, supposedly to promote free trade between the states. Hamilton argued that the Clause was really a license for the government to regulate all commerce, intrastate as well as interstate. For "What regulation of [interstate] commerce does not extend to the internal commerce of every State?" he asked. His political compatriots were all too happy to carry this argument forward in order to give themselves the ability to regulate all commerce in America."
So don't stop with copyright and patent: abolish the unconstitutional Lanham Act, and its unjustifiable grant of trademark rights to trademark holders instead of defrauded customers, and maintain the link to fraud (knockoffs are fine; no anti-dilution law).

Comments

But trademark law does give trademark holders--not customers--the right to sue infringers, regardless of whether there is really fraud to the consumer.

Despite my dislike for the way trademarks are currently being used, there is some argument to be made against allowing certain cheap knock-offs to use the markings of a well-known brand. The one I have in mind is cheapness. If a fake Rolex breaks at a dinner party, perhaps the wearer will be outed, but if not, it is possible for others observing the breakdown to reduce their opinion of the Rolex brand. "Rolex isn't what it used to be," they might say.

I would agree that, in the case of a perfect replica, there is no argument to be made for trademark dilution because there is no damage. There is also no misrepresentation if each seller properly identifies it as a fake (or a circumstance in which a buyer would easily infer), and it would be even better for the device to have some discrete but visible marking to that effect.

Trademark holders also have a claim against those who defraud customers. The trademark holder's reputation can suffer harm by the actions of the perpetrator. The previous commetor makes much the same point.
Mark:

"Despite my dislike for the way trademarks are currently being used, there is some argument to be made against allowing certain cheap knock-offs to use the markings of a well-known brand. The one I have in mind is cheapness. If a fake Rolex breaks at a dinner party, perhaps the wearer will be outed, but if not, it is possible for others observing the breakdown to reduce their opinion of the Rolex brand. "Rolex isn't what it used to be," they might say."

So what? Don't people have a right to form whatever opinion they want of Rolex, based on however shoddy evidence?

Anon: "Trademark holders also have a claim against those who defraud customers. The trademark holder's reputation can suffer harm by the actions of the perpetrator. The previous commetor makes much the same point."

This all ties in together. Sure, if there are reputation rights, you can justify parts of trademark law; but reputation rights are just as illegitimate as copyright, patent, and modern statutory trademark law. See on this Rothbard, Ethics of Liberty, chapter 16, "Knowledge, True and False", pp. 126-128.

Reputation rights are needed for as long as people are easily swayed by simply repeating a falsehood enough times AND people have unequal access to the ability to market (and defend) themselves through hiring their own PR agency or similarly.

Otherwise, the poor are disadvantaged and can easily be destroyed by any enemies that decide to gang up and publicly vilify them, as they'll be unable to reply with anything like the reach and volume of their attackers. Basically, they are at a disadvantage in any shouting match, and sooner or later there will be one.


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