A few months ago, my IP Issues entry demonstrated that the exclusive rights that trademark law provides are rooted in consumer welfare – in the need to ensure that consumers are able to distinguish one producer’s goods from those of its competitors. In this entry and the next, I will consider the implications of this point for modern trademark law.
If the consumer interest is really what trademark law is all about, then one conundrum that follows is that consumers do not have trademark rights. Producers do. A moment’s reflection explains why: When consumers are deceived by Producer X’s use of Producer Y’s mark, the injury to any one consumer is small – he or she buys the wrong product. But Producer Y’s injury is large, because it loses the sales of all those consumers in the aggregate. It therefore makes sense to give the producer the right to sue for trademark infringement even if the goal is to protect consumers from being fooled into mistaken purchases. [...]
James Gibson, Trademark Law As an Agency Problem - Part I, The Media Institute (May 06, 2015), available at https://www.mediainstitute.org/2015/05/06/trademark-law-as-an-agency-problem-part-i/.