Placebo Marks

Scholars often complain that sellers use trademarks to manipulate consumer perception. This manipulation ostensibly harms consumers by limiting their ability to make informed choices. For example, holding other things constant, consumers spend more money on goods with a high-performance reputation. Critics characterize that result as wasteful, if not anticompetitive. But recent marketing research shows that trademarks with a high-performance reputation may sometimes influence perception to the benefit of the consumer. A trademark with a high-performance reputation can deliver a performance-enhancing placebo effect. Research subjects perform better at physical and mental tasks when they prepare or play with a product bearing a high-performance mark. For example, subjects using a putter with a Nike label can sink a putt in 20% fewer strokes than subjects using the same putter with a different label. This performance-amplifying effect stems from shaping consumer perception, but the effect does not limit consumer autonomy. Indeed, the benefits of shaping consumer perception may outweigh the costs. Moreover, understanding this performance-enhancing placebo effect provides additional insights. The effect is price sensitive. Maximizing price competition in a market for branded goods may sometimes reduce positive spillovers that would otherwise flow to consumers who use products with high-performance marks. Additionally, high-prestige marks do not provide a performance-enhancing effect, suggesting that consumers perceive and use high-performance and high-prestige marks differently. The difference might blunt criticisms of trademark mechanisms that safeguard prestige value like post-sale confusion and protection against dilution, at least for that subset of high-prestige marks that are also high-performance marks. Moreover, reforming trademark law to prevent all manipulation of consumer perception, including the creation of a high-performance reputation may have the unintended consequence of unraveling benefits consumers receive from mechanisms like performance-enhancing placebo effects

Are Trademarks Ever Fanciful?

A fanciful trademark-a made-up word like Swiffer for mops or Xerox for photocopiers-is presumed to neither describe nor suggest any qualities of the product associated with the mark. This presumption is consistent with the theory of linguistic arbitrariness: there exists no connection between a given word (tree) and the thing signified by the word (a large woody plant). Because a fanciful mark is assumed to be an empty vessel, meaningless until used as a trademark, it qualifies for protection from first use and receives broader protection against infringement than other categories of trademarks. Research into sound symbolism challenges the theory of linguistic arbitrariness and thus the accepted gap between fanciful mark and mark-bearing product. Multiple studies demonstrate the existence of sound symbolism connections between the individual sounds that constitute a given word and the meanings that a reader or listener ascribes to that word. Consumers are more likely to favor a new trademark when trademark meaning links to product type, even if they are not conscious of the link. Marketers often consider sound symbolism when coining a fanciful mark to create such a link. Nevertheless, the law presumes linguistic arbitrariness when it comes to fanciful trademarks. Courts often assume that adopting a mark similar to a fanciful mark is evidence of bad faith, but a new entrant might reasonably desire to use sounds that convey product information. Overprotecting fanciful trademarks could thus impose unjustified costs on competitors, at least when sound symbolism connects the mark to the product offered for sale. Broad protection for fanciful marks that benefit from sound symbolism may therefore be misguided. Courts should instead engage in a more nuanced inquiry, accounting for sound symbolism when assessing the validity and scope of a fanciful mark

A Linguistic Justification for Protecting Generic Trademarks

A trademark is created when a new meaning is added to an existing word or when a new word is invented in order to identify the source of a product. This Article contends that trademark law fails in critical ways to reflect our knowledge of how words gain or lose meaning over time and how new meanings become part of the public lexicon, a phenomenon commonly referred to as semantic shift. Although trademark law traditionally turns on protecting consumers from confusing ambiguity, some of its doctrines ignore consumer perception in whole or in part. In particular, the doctrine of trademark incapacity — also known as the de facto secondary meaning doctrine — denies trademark protection to a term that was once a generic product designation, even if consumers now see the term primarily as a source-signifying trademark. Analyzing trademark acquisition through the lens of semantic shift sheds light on how the trademark incapacity doctrine misunderstands both the nature of language and the role of consumer perception in shaping trademark’s competition policy. Courts and scholars suggest that a generic term will rarely acquire source significance, and that even if it does, there are competitive, conceptual, and administrative grounds for denying trademark protection. The standard account i