Tea and Donuts

By Derek E. Bambauer and Robert W. Woods. Full Text.

U.S. trademark law often permits simultaneous use of the same brand by multiple entities. Its approach to deciding when and how this concurrent use is permissible has become antiquated, rooted in outdated assumptions about trade and telecommunications. By using the physical location of mark-users as a proxy for consumer confusion, trademark law creates doctrinal inconsistencies, undercuts trademark law’s notice function, and can cause the confusion it seeks to prevent. In theory, someone who registers their mark with the U.S. Patent and Trademark Office obtains nationwide rights; in practice, those rights remain limited to the places where the registrant actually conducts business.

This Article argues for ending this place-based methodology for evaluating simultaneous use. It marshals empirical and theoretical evidence to demonstrate that problems with concurrent use are steadily worsening, driven by changes to the economy and information distribution that upend long-held assumptions about consumer confusion. The Article describes the tortuous evolution and current morass of case law interpreting how geography affects consumer confusion. It articulates a set of interventions to remedy these failings, ranging from the modest (altering the defenses available for infringing an incontestable mark) through the moderate (folding geography into the standard infringement analysis) to the controversial (abolishing unregistered marks and stripping federal courts of jurisdiction over state claims involving such marks). Finally, the Article advocates for adopting its more sweeping reforms based on doctrinal coherence, improved notice, and welfare gains for both consumers and producers.