March 24, 2004

It wasn't Lexus, it was Lexis!

Communications from several members of the now defunct company I talked about in this post have established that it was in error. Despite some conflicting reports, it now seems that it was not the Lexus division of the Toyota corporation that wrote a threatening letter to a company that wanted to call itself Lexeme. I'm lucky Lexus didn't send ugly guys round to break my legs. No, it was (at least, so I am now told) the Lexis-Nexis legal database corporation that sent that letter. (If anyone did; there are some who say that there never was any such letter, there was just an evil scheming boss who wanted to put his stamp on the company and give it a new name of his own devising.)

You might say it makes a bit more sense that a company in the info biz might be concerned at Lexeme's first syllable. But a lawyer friend of mine has told me a bit more about why even Lexus might have been concerned. Now, he does not want to be named or quoted, because lawyers have to be so careful not to get on the record with critical remarks about the law, in case something is worded incorrectly, or in case it touches upon some case where they have privileged information or a case still in progress. But my friend didn't forbid me to describe what he said. I will do that here; but keep in mind that from here on, for the next dozen paragraphs, I am not presenting ideas of my own. I am skating along the blurry line between paraphrase and plagiarism, relying on an unnamed legal source and reproducing a lot of it unchanged.

Trademark law used to be mainly about consumer protection. Trademarks served to identify the source of products and services so the consumer wouldn't be fooled into buying fakes. Protecting the "good name" of the seller or trademark owner was a secondary consideration, and largely a byproduct of the primary purpose of the laws. The "likelihood of confusion" in the mind of the relevant consumer was the cornerstone of trademark protection: a second-comer was prevented from using a particular mark only if it could be shown that consumers might be "confused" about the source or origin of the goods.

But what counts as likely to cause confusion? There are a bunch of factors, sometimes known (because of a case involved Kodak) as as `the Polaroid factors'):

  1. the strength or distinctiveness of the plaintiff's mark;
  2. the proximity (or similarity) of the goods or services (which may be evaluated in terms of the target audience to which products or services are marketed);
  3. the degree of similarity between competing marks or designations;
  4. evidence of actual confusion;
  5. the similarity in the marketing channels (or advertising media) used (or the manner in which competing products are marketed);
  6. the type of goods (including quality), classes of prospective purchasers and the degree of care likely to be exercised by the purchaser (alternatively characterized as the sophistication of the purchasers);
  7. the defendant's intent in selecting its own mark; and
  8. the likelihood of expansion of the parties respective product lines (alternatively phrased as the likelihood that the plaintiff will "bridge the gap" between its market or business and that of the defendant).

Many problems arise from this list, but one of the most problematic is factor 3, the degree of similarity between competing marks or designations. What it means is that if there are lots of somewhat similar marks out there, then the plaintiff has to make a stronger showing that this particular defendant is creating a likelihood of confusion. In other words, if Starbucks says that everyone associates the name "Starbucks" with coffee and pastries from a distinctive source, and their opponent, an upstart company called Starbacks, is able to point to a whole bunch of similarly named establishments from which coffee, pastries or similar goods can be obtained, then it becomes much harder for Starbucks to argue that their name is so distinctive that consumer confusion will result. That is, if there's already a Star Bach's Restaurant and a Sta-Brucks Coffeehouse and a Star Bucky's and a Starbukes Pastries'n'Beer out there, then factor (3) starts to weigh against Starbucks when they go after Starbacks -- because Starbucks is now what those in the trademark biz call a "crowded field".

In other words, you have an easier case against infringers if your name is unique in the field. McDonald's would have had a much harder time preventing people from using the name McDharma's for vegetarian Indian fast food (which actually happened here in Santa Cruz County) if there had already been a McDreamer's and a McGoogle's and a MacGonigle's serving burgers down the street.

The bottom line is that corporations and their lawyers are now forced to go after similarly-sounding-named businesses in related areas, even if the particular "infringement" is arguably not a problem. If anything a bit similar to your business name is is used by someone else, your corporation will have a much harder case to make against a clearer case of infringement down the line, because you have permitted erosion of the distinctiveness of your mark.

It means that Starbucks simply must move against Star Bock, right now, because if that amusing pun is permitted, behind it may come StarBlech's joke imitation vomit and StarBic ballpoint pens and StarBickie cookies... And eventually will come the Starbacks coffee house, a clear ripoff that really does threaten Starbucks' business, with lawyers ready to argue that the Starbucks mark is not protectable any more because it is no longer distinctive: it's located in a crowded part of the phonetosphere within which Starbucks has permitted numerous other companies to use similar names, some of them in the food service industry, and the public no longer associates that corporation with all foods and drinks that come from something with a name similar to "Starbuck".

But it now gets worse. There is a relatively new cause of action known as trademark dilution. It is based on the idea that if you have a really famous and distinctive mark, you can prevent people from using your mark, or similar marks, for anything at all. Kodak has a famous mark. "Victoria's Secret" was recently found to be a famous mark by the US Supreme Court. It is fairly clear that Starbucks has a famous mark, and Lexis-Nexis could probably make that case as well.

The principal philosophical difference between dilution and traditional trademark law is that the purpose of dilution law is not to protect the public from confusion. Dilution protects "famous" marks when there is no likelihood of confusion at all, merely because they are famous. In other words, its purpose is to protect trademark owners against offense caused by someone using "their" word in a way not approved by them. It functions to provide a new and broad right of protection to those who are already the most successful and rich, a species of protection that is not available to anyone else.

Dilution law has been used to squash parody. Those t-shirts and posters that said "Enjoy Cocaine", and had a logo remarkably similar to the Coca Cola logo, are no longer available -- that poster was judged to be capable of tarnishing the Coca Cola mark. Debbie Does Dallas (which featured an enthusiastic girl named Debbie wearing a Dallas Cowboys Cheerleaders outfit, apparently) is no longer distributed: although nobody could possibly think that the Dallas Cowboys had anything to do with this film, their trademarks were "tarnished" by it.

For linguists, a further scary thing is that there are in fact people who are prominent in the trademark community who believe that you ought to be able to bring a lawsuit against anyone who tarnishes their name. This would include dictionary publishers. For example, McDonalds recently made noises about a cause for action against Merriam-Webster, because their latest edition of Merriam-Webster's Collegiate Dictionary defines a "McJob" as "low paying and dead-end work" (there is a short MSNBC story about it here).

The lawyer friend from whose email I pillaged the above thinks that under dilution law as it presently exists, McDonald's could well win on such a claim. But as yet no dictionary maker has actually been hauled into court for listing words people use. It has not proved feasible to stop dictionaries listing the uses of the numerous trademarks have turned into lower-case nouns and verbs, clearly diluting them. British English speakers talk about hoovering the carpet with an Electrolux hoover, and Hoover gnashes its corporate teeth in frustration but doesn't win cases against dictionary compilers who record the facts. American speakers talk about xeroxing a document on their Canon copier, and the Xerox Corporation bristles at such incorrect talk about xerocopying, but they haven't yet tried to break a lexicographer's legs. Sorry! I said something beginning with lex...

Posted by Geoffrey K. Pullum at March 24, 2004 01:57 PM