8/24/2005

Libertarians and trademarks

I've been giving some serious thought to the philosophies of libertarianism. I consider myself a libertarian in many ways, and am registered libertarian, though I have recently begun thinking more seriously about that stance. From a purely practical standpoint being registered libertarian excludes me from the primary process. I would prefer we had open primaries, but that is a different post for another day.

The problem I have is the application of absolute lbertarianism in the real world. If I'm lucky I'll be able to blog about this more in the coming months...

Anyway, my friend Robert and his wife Michelle are much more educated about the full scope than I and we have a good time chatting about these things. Recently I posed a challenge to Robert to talk about Patent law.

The Libertarian ideal is for the government to have no force over individuals in the course of their daily life. Fundamentally, all intellectual property laws are a form of force, exerted by the government against an individual in that you are disallowed from building and selling a "protected" property. This extends to all IP law including copyrights, patents and trademarks.

In this post I'd like to take this moment to take on the last of those three, trademark.

I'm not going to address the issue of abuse right now because any system has it's holes for abuse and I'm more interested in the fundamentals of the system, not the holes.

Trademark law allows me or my business to create a mark that is "mine". It does seem silly to need a body of law in order for the government to say "yes that is yours", but it also conversely says "this is not yours" by establishing clear legal ownership of the mark.

In the linked paper there is an example of competitors in a market where there is no trademark. I'll use this example to show how the use of "my" mark harms me.

Here's the story of Acme Burger, a chain of burger joints. Acme makes great burgers and does good business producing a high quality product. Bogus burger, on the other hand, makes crappy burgers.

If Bogus Burger INC starts opening franchises using Acme marks and Acme trade dress, the consumer will be mislead into buying a Bogus burger when they desire an Acme burger.

So far the only party harmed is the poor sap who bought the Bogus burger. Acme gets harmed when that consumer tells their friends "Acme burgers are just as bad as Bogus burgers". Acme has no recourse against Bogus in a world without trademark. Moreover, Acme now has an uphill battle to reclaim their reputation form consumers that have been duped. I suppose, Acme could begin a campaign to educate customers about where "genuine" Acme burgers are located, but Bogus only has to mimic that campaign to continue misleading consumers. Acme could also change their name, trade marks and trade dress to create the "New Acme" but this will only work for a limited period until Bogus gets updated. All the while, Bogus is forcing Acme to spend money in an effort to drive them out of business, and using the customer to do it.

Without government regulation, private regulatory bodies are supposed to come into existence and take an active role in informing the consumer. In our fictional world Burger Reports would take up the job of sorting the Acme from the Bogus. Sadly though, Burger Reports would only be useful for a very short period of time before it is completely irrelevant. Bogus Reports could easily put them out of business by using the Bogus Burger profits.

Acme cannot sue Bogus for anything because they have not committed any actionable offense. Any large body of money could eliminate any and all competition in any market very quickly where there is no trademark.

I struggle to find the way in which this is an ideal for which to strive.

Without the exertion of force by a completely disinterested third party, there can be no educated consumer. Any private means of regulation becomes meaningless when anybody can slap any symbol on a product because the symbol is not protected. Which leads us to the unfortunate conclusion that trademarks are an necessary evil.

Imagine if this mark was not protected:

That symbol means something. But if anyone can put it anywhere, it means exactly nothing.

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