The Suppressed Misappropriation Origins of Trademark Antidilution Law: The Landgericht Elberfeld's Odol Opinion and Frank Schechter's The Rational Basis of Trademark Protection
Frank Schechter’s 1927 article "The Rational Basis of Trademark Protection", which remains the most cited law review article ever written on trademark law, is generally recognized as the origin of the concept of trademark dilution. Yet as is less well recognized, Schechter’s discussion of trademark dilution in "Rational Basis" relied heavily, though cagily, on the true origin of the concept: the 1924 Odol opinion of the German Landgericht Elberfeld. "Rational Basis" quotes extensively from the Odol opinion and borrows much of the opinion’s argument and terminology. Yet Schechter suppressed and apparently deliberately deleted from his quotation of the opinion its central holding, that "[i]t is opposed to good morals to appropriate thus the fruits of another’s labor in the consciousness that that other will or may thereby be damaged." This brief essay, a chapter in the forthcoming "Intellectual Property at the Edge: The Contested Contours of IP" (Rochelle Cooper Dreyfuss and Jane C. Ginsburg eds. 2013), argues that Schechter deliberately sought in Rational Basis to obscure the true nature of the Odol case and of antidilution protection, and that even a century later, his effort at obfuscation remains more or less a success, at least in the United States. What Schechter sought to obscure in "Rational Basis" is that the Odol case was not, strictly speaking, a trademark case. Rather, it was a misappropriation case that happened to involve a trademark. Schechter sought to suppress this basic truth — that the concept of trademark dilution is essentially a misappropriation concept — in order to sell his proposed doctrinal reforms to an American audience altogether suspicious of misappropriation doctrine and increasingly under the sway of American Legal Realism. To do so required a great deal of finesse, or to but it more bluntly, of dissembling, and "Rational Basis" is full of it. Due both to its frequent misdirection and ambiguity and to its emphatic suppression of any suggestion that trademark dilution is a form of misappropriation, "Rational Basis" has remained an altogether open text. Concepts like "blurring" and "tarnishment" have rushed in to fill the void left in the absence of misappropriation. Even now, in the face of ever more scholarly and judicial commentary recognizing that dilution is essentially a form of "free-riding," and likely one that typically inflicts no substantial harm on the misappropriated mark, the obfuscatory nature of Schechter’s text enables the concept of dilution to survive — and thrive — behind a fog of indeterminacy.
Debunking Dilution Doctrine: Toward a Coherent Theory of the Anti-Free-Rider Principle in American Trademark Law
This Article argues that American dilution law purports to be about preventing dilutive harm, but the real purpose is to stop free-riding on famous marks. On its face, dilution law remains a harm-based doctrine that focuses on whether the unauthorized use of a famous trademark causes the famous mark to lose its commercial appeal or selling power. However, the hidden interest behind dilution law is a desire to punish free-riding. For instance, plaintiffs frequently win on their dilution claims despite the fact that proof of dilutive harm is remote and tentative at best, but free-riding seems obvious. These claims may involve trademarks, domain names, the internet, and the right of property. Since the stated purpose of dilution and the hidden interest are mismatched American dilution law focuses too much on harm and not enough on the anti-free-riding impulse and its limits. Consequently, impairs judges from identifying the real competing interests at stake resulting in too little or too much protection to famous mark owners. It also does not allow judges to turn the anti-free-riding impulse into carefully circumscribed set of principles with identifiable limits and regulations. Therefore, this Article argues that it would be better to abandon dilution altogether and swap it with an independent cause of action that explicitly prevents free-riding in appropriate circumstances.
Exclusion and Exclusivity in Property Law
In this article, I propose a model for understanding the concept of ownership that I call the 'exclusivity model.' Like many of the contemporary critics of the 'bundle of rights' approach to ownership, I insist that ownership is a legal concept with a well-defined structure. I differ from most of them, however, in the model of ownership that I believe to be at work in property law. Most of these critics propose a model of ownership that emphasizes the owner's right to exclude non-owners from the owned thing as the central defining feature of ownership. I call this the 'boundary approach' to highlight its fixation on the owner's power to decide who may cross the boundaries of the owned thing. But this, I argue, makes it impossible for the boundary approach to explain adequately the many subsidiary rights in things that coexist with the rights of owners. Indeed, I argue that when we look more closely at the structure of ownership in property law, its central concern is not the exclusion of all non-owners from the owned thing but, rather, the preservation of the owner's position as the exclusive agenda setter for the owned thing. So long as others – whether they be holders of subsidiary property rights or strangers to the property – act in a way that is consistent with the owner's agenda, they pose no threat to the owner's exclusive position as agenda setter.