2 Apr

Trademark fame: academics find objective measure that could transform IP practice

  • New study unveils method to objectively measure fame of a trademark
  • Research is first empirical measure of fame based in neuroscience
  • Academics tell WTR they can help companies introduce approach in court

A groundbreaking new study has created an empirical measure of trademark fame that academics claim could be rolled out in common IP practice. Talking to WTR, an academic behind the finding reveals that they believe a similar method could be used to objectively determine trademark dilution – and have plans to research whether that is so.

The study – Towards an Objective Measure of Trademark Fame – was released on 27 March and was published in the UC Davis Law Review. The primary aim of the research was to identify an objective measure of trademark fame and define it empirically as a function of how fast a consumer recognises a trademark’s association with its product. This method is already employed in marketing research, and the academics, Mike Schuster from the University of Georgia and Suneal Bedi from Indiana University, sought to import it into the legal realm.

Talking to WTR, Schuster said that the reason the pair decided to investigate this was because “the fame determination has always bothered us”, expanding: “The statutory considerations are imperfect proxies for fame that are applied according to the judge’s subjective feelings. For example, spending a huge amount of money on advertising supports a finding of fame, but if the company does a bad job at advertising, its mark is no more famous after the advertisement than before. Proxies by their nature are not directly measuring a construct. We therefore thought we could find a way to get at measuring fame itself in a consumer’s mind.”

The authors argued that the speed of recognition of a trademark being associated with a particular product (eg, Budweiser with beer, or Persil with detergent) is a better determinant of fame, and that it can be empirically measured using a technique called the “product/recall method”. Through three large-scale studies of that method, the authors sought to show how it is a “more predictable measure of fame that should be adopted in trademark litigation”. To double-down on that determination, they then highlighted previous court decisions that incorrectly analysed trademark fame using other less predictable methods (eg, when brand Private Selection was found not to be famous while V-Ray was found to be famous despite near-identical response rates).

Digging deeper, the method measures how quickly consumers can accurately correlate a brand and the products or services that brand produces. The stronger the association, the authors say, the more quickly individuals should be able to make the match. Therefore, they add, the more quickly consumers correctly

match the trademark to the product, the more famous (readily accessible) the trademark is in their minds. To do this, consumers are shown various pairs of brands and products, and are then asked whether each brand is associated in some way with the products next to it. The results are then aggregated, with the results showing the mean and median of each of the brand/products. “This final aggregation is a measure of fame, because it measures the speed of which consumers, writ large, can correctly match a brand (trademark) and its products,” the authors note.

Of course, looking at the speed of responses will require courts to “set a standard for what response rates count as fame and what do not”, the authors say, further recommending: “setting response rate benchmarks on clearly famous brands. For example, in our studies above we measured response rates for Budweiser. Under all accounts, Budweiser is a famous trademark, and not surprisingly it has one of the quickest response rates. Courts could compare response rates in order to determine whether their marks are famous.”

Why, then, is this method better? Bedi and Schuster say a key reason is because, at present, the courts attempt to use “various metrics to proxy for trademark fame” (eg, looking at marketing spend, advertising exposure and sales), which causes inconsistencies in fame designations. “Directly measuring fame, as understood and measured by psychologist and marketing experts, creates for more consistency, fairness, and predictability – all things that a good legal rule should facilitate,” the authors state. “Measuring the speed at which a consumer matches a product and a trademark is a direct measure of fame rather than an indirect one. Therefore, it is a better method than that which is currently used.”

Going forward

Of course, the real test will come when this measure is actually used in legal cases. Talking further with WTR, Schuster says it will take a two-step process for the approach to be accepted. The first, he notes, will be through brand owners using this method as part of their activities to benchmark their brands’ fame annually. “We hope to work with companies to integrate our fame analysis into their periodic IP analysis,” he explains. “As more companies begin to utilise this kind of measure, it will become more standard. Of course, courts could increase this process by either requiring the kind of approach we recommend or at least strongly encouraging it.”

Second, it will be the use of this measure in the courtroom. “After a dilution lawsuit has been filed, we can present to a court how our methodology implements the statutory fame requirements in an objective, understandable fame metric that is grounded in marketing and legal research,” Schuster says, noting that he and Bedi are “are happy to discuss how we can help law firms and companies implement this approach”.

Beyond this, the pair plan to better categorise the most famous trademarks to reflect how consumers interact differently with various sectors (eg, those interacted with daily [consumer packaged goods, restaurants] and rarely [mortgage lenders, hospitals]), which will affect the response times. Further, they plan to conduct another study – this time to see whether the method can be used to successfully quantify trademark dilution. “There is a disagreement between legal scholars and marketing researchers on whether the method we used can be appropriately applied to measure and quantify dilution – studies have been inconclusive on both sides. We hope that we can do more exhaustive studying on this.”

Time will tell whether this new measure will transform how brand fame is measured. For now, rights holders are advised to read the full study and determine if it could be a helpful metric to benchmark their IP portfolios.

Tim Lince

Author | Senior reporter

[email protected]

Tim Lince