Research On The Trademark Property Theory

Trademark Right is traditionally classified as a private right and belongs tointellectual property right. However, trademark right is different from copyright andpatent. Scholars and judges are puzzled as to the essence of the trademark right andthe foundation for providing trademark remedy is not clear-to protect the propertyinterest of businessman or protect consumers not to mislead or confusion? The authorproposes the trademark property theory. Pursuant to this theory, the property interestis the reason to initiate trademark remedy and trademark law is a law of authorizingtrademark right. This paper is divided into five chapters. The first chapter is from thesystematic point to demonstrate trademark property theory. The second chapter isfrom the historical view. The third chapter discusses the thesis from the application ofrules. The author tries to come up with a new explanation of trademark propertytheory in the fourth chapter. The last chapter talks about the implication of trademarkproperty theory.The first chapter contains two parts. Part I studies the connections betweentrademark law and law of unfair competition. Historically, the action of passing off isthe origin of trademark law and unfair competition law. Besides, passing off andtrademark infringement constitute the protection system of trade symbols. They shareseveral factors in common regarding the construction. Finally, the same remedies canbe resorted in trademark law and unfair competition law. These remedies areinjunction, compensation and removal (publish the judgment). The differences between trademark law and unfair competition law, which aremore important than the links between each other in analyzing the essence oftrademark right, enhance the thesis stated above. Goodwill is the object of thetrademark right and the focus of the trademark infringement is to prevent the harmcaused by the diverted trade. Therefore, the aim of trademark law is to protect theproperty right of traders. The likelihood of confusion which is used for determiningwhether trade has been diverted, only acts as a tool and is not independent. Trademarklaw does not protect consumers directly and thus the consumer association or otherpublic institution is not entitled to sue in accordance with trademark law. Theconstruction of competitive relationship and competitive conduct are different fromthose in unfair competition law. The types of trademark infringement are strictlystipulated under trademark law, while the unfair competitive conducts are open forjudges to decide.The author discusses the thesis from the historical view and also contains twoparts in the second chapter. From the point of early history of trademark law,trademark right is a property. Due to the propertilization of trademark right caused bymany factors including the need of protection of business interests, the philosophy ofnatural law, the development of judicial idea, the initial of law enactment, the view oftrademark right as a property is widely recognized in the second half of nineteenthcentury, by the introduction of registration system.The development course of modern trademark law reflects the expansion historyof trademark right which can also demonstrate the thesis of the paper. The qualityassurance function, advertisement function and investment function are the directapplication of trademark property theory. The development course of the sourceidentification function, when combined with the status of likelihood of confusion canalso reflect the expansion of trademark right as a property right and thus shall beobserved under the system of trademark property theory.The purpose of the third chapter is to distinguish the trademark property theoryand the trademark function theory from the perspective of rule application. Under thetrademark function theory, trademark law is a part of law of unfair competition and a trademark is a tool for passing off. The standard of trademark infringement is whethertrademark function is affected. In contrast, pursuant to the trademark property theory,the dominative power is the reason for trademark remedy and the standard oftrademark infringement is whether trademark right itself is affected.As a start, this chapter studies whether legal philosophy has provided foundationfor these different theories. Natural law philosophy has made much contribution to theearly development of trademark law, while utilitarian philosophy which reflectstrademark function theory is more attractive to explain and construct trademark rules.From the protection object, trademark right is a right in trademark law, but also can beseen as a property interest under the law of unfair competition. In essence, trademarkright is a property right and trademark law regulates the dominative relation thatbusinessman exerted on goodwill. From the perspective of construction, territorialright exists in the unregistered trademark system. However, regarding the protectionof registered trademark, if a person use the same sign on the same commodity,trademark infringement is constituted, not to regard the likelihood of confusion.The author reconstructs trademark property theory to compromise trademarkproperty theory and trademark function theory in the fourth chapter. The first sectionfollows the research methods of traditional civil law and tries to construct thedominative relationship in trademark law. Trademark right is a type of dominanceright (or right to control) and its object is goodwill. Trademark owner may directlycontrol the goodwill of his/her trademark, which means that the content or power oftrademark right can be fulfilled without any help from any other person. The power ofpossession, use, profit and dispose are the powers of trademark right. The traditionalprinciple of "separation of power of ownership" can be applied in trademark law.Trademark right is a complete property right like ownership and the owner can createa limited real property right. For example, the right of the exclusive licensee is thelimited property right.While lacking of applicable rules, traditional property rules may be applied inprinciple. For example, traditional property rules can be applied in dealing withtrademark joint possession issue. Any co-owner is entitled to sue for trademark infringement, but is not entitled to transfer the trademark without obtaining theconsent from other co-owners. However, the bona fide acquisition system shall not beapplied in trademark law, because the trademark registration is not able to set up acredible system.In the second section of the fourth chapter, the author tries to explain the statusof competitive factors in trademark property theory. Factors like "average consumer","likelihood of confusion","the same or similar commodity or service","the fame ofcommodity or service", are not directly linked to traditional property law. Thosefactors are relevant with competitive market and trademark right is thus ofcompetition function. The competition function, which reflects the effect fromcompetition law, directly influences the construction and explanation of trademarkright. From the point of the competition function, trademark law is not only aright-authorizing law, but also a resource-utilization law. Trademark rules can’t befully explained under the traditional property law.The third section comes up with the "revised" trademark property theory whichis a limited theory in its meaning. There are three points implicated. First, trademarkright is restricted by trademark use. Second, trademark right is restricted bycompetitive relationship-the same or similar commodity or service. Third, trademarkright is restricted by competition order, which means that the boundary of trademarkright is defined by trademark function. Trademark function is the reflection ofcompetition order.The fifth chapter discusses the application of trademark property theory andcontains two parts. The research of "trademark property theory" is of theoretical andpractical implication. The theory is coherently with trademark principles and can beused to explain trademark rules perfectly, as well as to construct trademark rules as aguide.The explanation and construction of trademark rules shall observe the doctrine of"trademark owner orientation". The main objection of trademark law is to protectbusinessman’s interest or benefit, while the likelihood of confusion is used as theevidence of proving that the trade have been diverted."likelihood of confusion" does not set up the doctrine of "consumer orientation" which is the opposite of "trademarkowner orientation" and is not a independent standard.Regarding the position of trademark right, entitlement of trademark right is basedon authorization of trademark law and trademark right is of dominance attribute. Thepositive power and the negative power of trademark right originate from thedominative power, rather than the unfairness of conducts. Obeying the logic ofproperty law and the logic of competition law, would lead to different results in manycases and the logic of property law shall prevail. Regarding the attribute of trademarkright, the dominative attribute is more fundamental. Regarding the goal of trademarklaw, the author holds that protection of property interests of the businessman is thegoal of trademark protection, while the interest of not confusing and misleading is thereflection interest that trademark law indirectly protects. The goals of moderntrademark law are diversification, but is not independent from the essence oftrademark right. Whether or not initiates trademark remedy, analysis of elements oftrademark infringement is necessary.According to this theory, The protection area of trademark right can be dividedinto exclusive area and extension area. Both areas are covered by the property right.Any conduct fallen into the exclusive area constitutes trademark infringement, nomatter if the trademark has been used or whether likelihood of confusion exists.Trademark use, likelihood of confusion or dilution shall be judged to determinewhether the conduct has been fallen into the extension area. Likelihood of confusionor dilution is the indication that the trademark right will be infringed. When thedominative interest has been shared by other person, the trademark right is infringedand accordingly should adopt the distinctiveness orientation. Trademark infringementcan be divided into direct infringement and secondary infringement by adhering to thestandard of trademark use.