The Economics and Management of Non-Traditional Trademarks

Economists have largely neglected the phenomenon of NTTMs and its consequences for society so far, partly because of their limited interest in the social returns of trademarks in general. After reviewing the handful of economic studies on this matter, I present a first systematic empirical analysis of the extent of NTTM filings, with a focus on the number of filings, their nature, and the actors behind those filings. Using data from the USPTO, I find that NTTMs are steadily increasing, they are filed by very different types of firms, but they remain a relative small phenomenon, as compared to all trademark filings. I conclude by discussing avenues for further research.

What Should Constitute Infringement of a Non-Traditional Mark?

Various “defensive doctrines” might be employed to create space for third parties wishing to make legitimate use of features of registered non-traditional marks. This chapter explores one such doctrine: a requirement that infringing use be “use as a trademark.” This doctrine, as it has been developed in countries such as Australia and New Zealand in cases involving non-traditional marks, is more complex than is often appreciated. At times it has been stretched to accommodate worthy policy considerations, which has caused tensions with other aspects of the registration system. At other times it has been applied too restrictively, unduly limiting the scope of permissible third party use of product features. The chapter offers suggestions as to how “trademark use” might be recalibrated to manage the full range of concerns raised by non-traditional marks, in a manner that affords owners adequate protection while leaving sufficient breathing room for third party users.

Protecting Non-Traditional Trademarks in China

Drawing on a series of cases that Hermès has litigated in China, the chapter discusses how transnational companies should tap into the potential of non-traditional trademarks to promote their businesses in China. Section I of the chapter provides an overview of the most important requirements for registering such trademarks in China. It considers why the Chinese courts rejected Hermès’ bid to register the shape of its Kelly bag as a three-dimensional trademark in China. Through the lens of several trademark cases that the French high-fashion luxury brand litigated in China, Sections II and III offer nuanced analysis of how companies can protect their trademarks in the Chinese first-to-file registration system and how to determine the well-known-trademark status in the country. Sections IV and V further examine the lessons that can be learnt from the Hermès cases about securing anti-confusion and anti-dilution protection of non-traditional trademarks in China.

Introduction

During the past decades, the domain of trademark law and the scope of trademark protection have been expanded significantly. The flexible application of prerequisites for registration has paved the way for the recognition of a wide variety of signs as subject matter eligible for trademark protection. This includes single colors, shapes, sounds, smells, video clips, holograms, and even gestures. However, this expansion of the scope of trademark protection has been accompanied only by a partial expansion of the grounds for refusal relating to these registrations and the creation of defenses that permit unauthorized use in the interest of freedom of competition and freedom of expression. Hence, the expansion of trademark protection to non-traditional marks can have serious effects on market competition as these signs often protect products, or parts of products, per se. Likewise, the protection of these signs can prevent other socially valuable uses in related or unrelated non-commercial contexts. In this Introduction, the editors of this Book explain the risks posed by the protection of non-traditional trademarks, the causes for these risks, and the development of this type of protection, and lay groundwork for the more detailed discussion of the topic in the contributions to the Book.

Paying the Price for Admission

This chapter makes the case for joined-up thinking when approaching non-traditional signs in trade mark law. Trade mark registration has moved from up-front exclusions for certain categories of signs (no shapes, no colours) toward incremental acceptance. However the policy concerns generated by the grant of legal monopolies in such signs remain equally relevant today. The grant of an abstract color mark to one trader closes off a part of the color spectrum to others. Can we therefore allow such signs in to the system while successfully managing the tensions this generates? The approach advocated here is that we should correlate the mark as characterized at the time of registration—agreeably modest in its scope and ambitions—with the mark as deployed in an enforcement context, where it otherwise tends to be read more generously. The doctrine of prosecution history estoppel in patent law may have valuable lessons for trademark law.

The Protection of (Three-Dimensional) Shape Trademarks and Its Implications for the Protection of Competition

The exclusive protection of shapes (three-dimensional in particular) as trademarks of products, raises serious concerns about its possible negative impact on competition. The analysis of the European legal framework focuses on the risk of systemic impasse and over-protectionist consequences resulting from the coexistence of trademark and registered design protection. An interpretative solution capable of overcoming such impasse in a pro-competitive perspective is presented. Such solution is then confronted with the alleged “investment function” of trademarks as asserted by the CJEU—an assertion criticized as both systemically improper and deeply anti-competitive. The solution is finally reconciled with the need to avoid weakening the distinctive character of the overall appearance (“trade dress”) of industrial products.

Non-Traditional Trademarks and Inherently Valuable Expression

Trademark laws currently allow companies to obtain trademark rights in product configurations, colors, scents, sounds, flavors, textures, and other “non-traditional” marks that identify and distinguish the source of goods or services. This chapter argues that non-traditional trademarks convey expression protected by the right to freedom of expression in constitutions, human rights treaties, and statutes. Not only do distinctive non-traditional marks communicate source-identifying information, but these product attributes may also intrinsically convey information, ideas, or other messages unrelated to the trademark owner. Therefore trademark laws regulating this expression must have a sufficient justification, and governments should repeal or revise laws protecting non-traditional marks when they do not directly further trademark law’s goals and harm free expression. Nations should refuse to register non-traditional marks that expressed inherently valuable messages unrelated to source-identification before they were adopted or used as marks, or only grant such marks narrow protection.

Yellow Dictionaries, Red Banking Services, Some Candies, and a Sitting Bunny

Colors and product designs face increasingly high hurdles against registration in the EU. However, such marks exist and continue to be registered, not least on the national level. Measuring the scope of protection of such signs therefore remains a key issue in EU trademark law. The appraisal is informed by a number of legal principles and guidelines which are neither completely clear nor uniform in their application by the national courts and authorities. The recent EU trademark law reform has added complexity to the picture by introducing a new limitation permitting to (fairly) use a non-distinctive sign. The meaning and effect of this novel clause still have to be tested in practice.

Making a Large Universe Visually Perceptible

As it is the case for most intellectual property rights, trademarks have been experiencing an extension of their scope of protection in new domains and today more and more IP offices are registering non-traditional trademarks (NTTMs). However, because of the lack of internationally accepted definition of NTTMs, the absence of international instrument harmonizing their registration and protection at the multilateral level—which leads to a diversity of national legal regimes and practices—their trademark owners often experience uncertainty in their protection. Although WIPO treaties have not specifically regulated NTTMs, their development has been extensively discussed at WIPO meetings and diplomatic conferences. This chapter details the discussions and documents produced by the WIPO at the request of the Standing Committee of Trademarks (SCT) which provide a thorough analysis of the challenges, practices, methods of representation, and description of NTTMs, as well as possible areas of convergence which have been agreed upon by WIPO Member States.

Non-Traditional Trademarks

This chapter provides a twenty-year retrospective on non-traditional trademarks, using the European Union, the United Kingdom, Singapore, Japan, and Australia as case studies. It presents findings from an empirical study on the application and registration of non-traditional marks in these jurisdictions from 1996 to present day. It assesses whether the appetite for non-traditional marks differs across jurisdictions and what impact, if any, differing regulatory regimes have on filing and registration activity. The study also canvasses the micro-trends emerging from these data in order to test prevailing assumptions about non-traditional marks. The policy implications of these findings will also be touched upon and contextualized against growing concerns about trademark depletion, which have to date focused on the diminishing number of available words and colors as trademarks, but may well extend to non-traditional marks more generally.