FAMOUS TRADEMARK OWNERSHIP: The Benefits and the Burdens

If commercial entities were asked to vote whether they wished to own trademarks that were either famous or those that were not famous, it is certain that those polled would vote in favor of famous trademark ownership. Among the many benefits such trademarks possess, famous trademarks are immediately recognized by potential consumers and hopefully the products bearing these trademarks are preferred by such consumers. A very relevant description of the value of trademarks was provided by United States Supreme Court Justice, Felix Frankfurter, in 1942. He stated:

" The protection of trademarks is the laws recognition of the psychological  function of symbols. If it is true that we live by symbols, it is no less true that we purchase goods by them. A trademark is a merchandising short cut which induces a purchaser to select what he wants, or what he has been led to believe he wants. The owner of a trademark uses this human propensity by making every effort to impregnate the atmosphere of the market with the drawing power of a congenial symbol. ….  The aim is to convey through the mark, in the minds of potential consumers, the desirability of the commodity upon which it appears. Once this is attained, the trademark owner has something of value. If another poaches upon the commercial magnetism of the symbol … the owner can obtain legal redress ".

Interesting and, I think, very accurate terminology: trademarks as "merchandising short-cuts" that possess "commercial magnetism". I think it can be said that famous trademarks do represent significant merchandising short cuts to consumer consciousness and that the commercial magnetism of famous trademarks is tremendous. I only need to display a can of COCA-COLA for most of the audience to immediately recognize it. This is an example of the type of merchandising short cut I mentioned. You see the well-known COCA-COLA trademark, the familiar lettering and package design and you know right away what it is. This is commercial magnetism. We at the Coca-Cola Company, are of course, not alone. There are many famous trademarks and they all possess such commercial magnetism. As soon as you see them your thoughts focus on one and only one product, service or producer of same. This commercial magnetism is the signal or invitation which leads the consumer to immediately know the product or service of a particular merchant.

Indeed, as noted by other speakers at this conference the laws in many countries of the world pay special heed and give enhanced protection to commercial symbols designated as "famous" or "well-known". Some countries create special registries for these famous trademarks while others grant such enhanced protection only upon the production of evidence in court that marks have achieved fame and notoriety. This enhanced scope of protection typically allows the owners of famous trademarks to stop the use of their trademarks, or ones similar to their trademarks, even in the absence of confusion. An example of this is the ability of owners of famous trademarks to stop the use of their trademarks on goods very different from those the public typically associates them with. It is thought that such use of famous trademarks by third parties, even on dissimilar goods, is inherently unfair and whittles away the fame and distinctiveness of such famous marks.  Conversely, owners of marks that are not designated famous can generally not stop uses of identical or similar marks unless consumer confusion, or its likelihood, exists.

The work leading up to the grant of such famous or well-known trademark protection is somewhat obvious, a company needs to adopt a trademark or trademarks that are likely to be accepted by the public and then spend a lot of time, money and creativity popularizing such trademarks.  Not all companies can achieve this fame, but these steps will be required for those lucky enough to succeed. What is probably not as obvious is all the work required after a trademark has become famous to keep it that way and why that work is necessary.

I have heard many descriptions of what it is that makes a trademark famous and the one description I find the most helpful is "singularity". A trademark can only be famous if it is singular, that is, when you see it, you think of only one product or service. If you associated that trademark with many products from many different producers that trademark would not possess singularity. A famous trademark needs to stand alone in your mind as associated with a single product, or the different products emanating from one producer. If the trademark does not do that it will not be famous. Thus, maintaining this fame requires a trademark owner to take whatever steps are necessary to keep others from using its trademarks, or encroaching upon its goodwill. Similarly, if another producer were to use your trademark without permission you could not insure that the product met with your standards. That producer's failure to produce a high quality product would ruin the good reputation you had worked for so long to create. Thus, a significant burden is placed on a trademark owner to make sure it is the only one using its trademark. The burden is one of both time and money. Indeed, The Coca-Cola Company expends a lot of resources to protect the notoriety and fame of its trademarks.

If the COCA-COLA trademark or imitations of the product packaging , for instance, were to be used  by other parties, the trademark and packaging would lose their specialness, or singularity, and would no longer  possess the commercial magnetism they do now. This would result in a tremendous loss in the equity that has been built up in these trademarks over the course of many years and significant commercial harm to The Coca-Cola Company.

As a result we devote significant effort to challenging unauthorized uses of our trademarks. The following are examples of some of the unauthorized uses we have taken action against:  [Various slides of infringing products].

Again, our failure to vigorously protect our trademarks from encroachment would result in a loss of the singularity we have worked so hard to achieve. The loss of this singularity and distinctiveness is not merely academic; it would have very severe economic consequences. If such singularity were lost, when I held up this can of COCA-COLA you would not think only of our product and company, you might think of any number of companies who have imitated us. Or perhaps you would think poorly of us because you just had a beverage made by an imitator that tasted very bad and you would now be less inclined to drink a beverage that looked like this. Sales would suffer and our commercial enterprise would be devastated. That would be a tragic and unfair loss of the goodwill and marketing advantage we have worked for over 100 years to create.

 Let me try and put the potential harm into perspective: It has been said that the COCA-COLA trademark is so valuable, that if all the physical assets of The Coca-Cola Company and its affiliates were somehow destroyed all at once, based solely on the value of the trademark, any bank would to lend us enough money to build it all anew.  This is an excellent illustration of how the consumer associations and singularity of our trademark have combined to create something of tremendous value. Value that has taken us many years and much effort to create.  However, this thing of tremendous value is not a machine or something you can touch, it is the collective good feeling and positive associations people have when they come into contact with our trademarks. If it were a machine we could keep it well-oiled, we would polish it and we would keep it running smoothly. The way we do that with a trademark is to make sure when people come into contact with it they associate it only with us and that they associate it positively. This means we must stop infringers and expend significant resources doing so.

So when you look upon the efforts undertaken by The Coca-Cola Company and others to protect valuable trademarks, please understand we are only making sure these hard-earned marketing machines are well taken care of, we are keeping the surfaces of these machines polished and well-groomed, we are making sure these intangible marketing machines will continue to run smoothly for many years to come. Thank you. 

Bruce Procto