Are We Running Out of Trademarks?

A February 2018 study published by Harvard Law Review titled Are We Running out of Trademarks? An Empirical Study of Trademark Depletion and Congestion concluded that  trademark “depletion and congestion are becoming increasingly serious problems for the trademark system.” In other words, we are running out of effective trademarks. Written by Barton Beebe and Jeanne C. Fromer, the article challenges long held presumptions about trademark law and makes a strong case for some reform at the United States Patent and Trademark Office (USPTO).

 

This attempted summary does not give this article the justice it deserves and everyone should give it a read. The authors meticulous analysis is appreciated.

 

It is presumed in trademark law that there is a near infinite number of trademarks a business can select because any word or combination of words in any language can be used and any company can coin their own word to use a trademark. Despite the conventional wisdom, the authors of the study state in their conclusion “Firms will likely always be able to find, as they do now, some minimally communicative sign by which to identify and distinguish their goods or services. But as depletion and congestion continue to intensify, firms will find such signs at greater cost and with less benefit.”

 

The authors accurately point out one problem, namely depletion of single word trademarks, especially in certain Nice classes. But they do not effectively argue that companies cannot coin terms or phrases as trademarks due to "trademark depletion and congestion."

 

81% of Common Words are Registered Trademarks

 

 

Table from the study showing how the most common words are already registered as single word marks.

 

The above table is from the results of the study that showed, of the 1,000 most common words, 813 are registered as single-word trademarks. This is problematic because anyone who wants to use that word, even as part of a longer phrase, in the same or a related industry will be prevented from doing so.

 

In addition, some Nice Classes are hit especially hard because of the amount of single word marks already registered. The hardest hit Classes are 9 (electronics), 25 (apparel and footwear), and 35 (retail and online store services).

 

In addition to not allowing registration or use for similar goods incorporating the single word registrations, many large corporations and brands use their single word marks in a manner that has come to be known as “trademark bullying.” For example, Vice Media, Inc. often goes after anyone who uses the word VICE as a trademark, including a band.

 

The authors make a strong case of why these single word registrations are problematic to new entries into marketplaces. It limits the known universe of words trademark owners can use and rights are often used to bully others from not adopting a mark that has any use of the word in it.

 

The authors also go into great depth about surnames. For example, they showed that of the 151,671 surnames listed in the census, 22,125 matched single word registrations. Furthermore, the  22,125 registered surnames cover the last names of 55.4% of the population.

 

The Finite Universe of “Good” Trademarks

 

The article states there is a finite universe of “good” trademarks and with the above data, their position is defensible, especially when it comes to popular English words. This is a new and unique position to take because, as the authors admit, trademark law has often considered there to be a near infinite universe of trademarks because any coined term can be a trademark. The authors rebut this argument by stating “[t]ypically no evidence or analysis is presented to support this claim.”

 

It is true, as the authors state, that trademarks consisting of two to three syllables and not too many letters perform better than longer trademarks. And they clearly demonstrate that the overwhelming majority of the most common words are registered as single words. So is there a problem that we are running out of short words to coin and use as trademarks? In other words, we are even running out of words not yet invented that would be “good” trademarks.

 

The authors never make a strong argument that there is a finite number of words not yet made up that would be “good” trademarks. The authors state that GOOGLE is a “classic example of such a unique mark,” i.e. a unique mark that is a “good” trademark. If the finite universe of trademarks is shrinking to problematic levels, it is a good thing GOOGLE stole up one of the last “good” trademarks.

 

The authors then strangely provide more evidence that new trademarks are being made up by combining multiple words into a new word as a trademark. The authors state, “[f]or example, VERIZON calls to mind ‘horizon,’ suggesting a forward-looking brand; INTEL suggests ‘intelligent;’ and VIAGRA calls to mind, all at once, ‘vigor,’ ‘vitality,’ ‘aggression,’ and ‘Niagara’ (suggesting both water and honeymoons).” These are, in the authors’ opinions, all strong marks.

 

While arguing there is a finite number of “good” trademarks that have yet to be coined, the authors come up with a lot of “good” trademarks that have not been around very long. A few more “good” trademarks that have been adopted in the past ten years include NETFLIX (combines “Internet” and “flicks” as in movies), HULU (chinese word for “gourd”), and ROKU (Japanese for “sixth” because it was the founders sixth company) (authors note: I came up with those three as I sit here deciding what to watch through NETFLIX or HULU streaming services on my ROKU device as I wait for my buddy to take an UBER car over to my apartment).

 

I do not think the authors made a persuasive case that companies cannot come up with viable coined terms to use as trademarks or to use obscure words or translations as effective trademarks. It takes creativity to come up with creative trademarks, something the authors do not address head on.

 

Less Trademark Availability Requires More Trademark Creativity

 

The authors suggest to help relieve the tension caused by trademark depletion, the USPTO should charge higher maintenance and renewal fees, and continue to randomly audit registered trademarks for use on all their goods and/or services. Some would argue raising renewal fees will hurt smaller companies the hardest because they do not have the same sort of trademark budget as larger companies. But then again, if they are renewing the trademark, they clearly see the value in it.

 

A better solution is for the creativity of trademark owners to come through. The authors are correct that the depletion of single word marks is making it more difficult for new brands to use the most common words as their trademark or part of their trademark. However, the authors fail to successfully argue, in this one writer’s opinion, that creative companies, marketers and individuals cannot come up with unique coined terms or phrases that are "good" trademarks. Who will become the next “classic example of such a unique mark” like Google? Maybe some teenager has already coined her unique trademark that will become the next household brand.

 

What do you think? Are we running out of trademarks? What should we do about all the trademark depletion and congestion for single word marks? Leave a comment below and join the conversation.

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