Trademarks – Copying and Imitation in the Marketplace

In our competitive free economy, copying and imitating business concepts and market trends in the public domain is the general rule, protected intellectual property (e.g., trademark, copyright, patent) is the exception.

Copying and Imitation as Fair Competition

“The Creative Commons proposed in 2010 the Public Domain Mark (PDM) as symbol to indicate that a work is free of known copyright restrictions and therefore in the public domain. The public domain mark is a combination of the copyright symbol, which acts as copyright notice, with the international no symbol. The Europeana databases use it, and for instance on the Wikimedia Commons in February 2016 2.9 million works (~10% of all works) are listed as PDM

Therefore it follows that imitating or copying a successful business concept or market trend (i.e., an invention, creative work, commercial symbol, or any other creation that is not protected by through a trademark, copyright, or patent registration) that is not protected by trademark, copyright or patent is the essence of free competition.

This statement may come across as surprising since the business marketplace generally places a negative connotation on copying and imitating.  However, if you look back over the last hundred years, many of the most successful innovators and business organizations were not always the first to enter the marketplace with a new product or service.  Rather,  the most successful “new” product or service is one which lawfully imitates and copies the innovator that actually invented the product or service.  In other words, being the first to invent a product or service does not necessarily create exclusive rights to the inventor in that product or service.  The idea of granting exclusive rights to an inventor of a product or service in all circumstances would effectively stifle innovation and competition. For example, Steve Jobs was the first to reach the market with the personal computer, but IBM found its success by following Apple’s lead and setting the industry standard for home and office desktop computers.  Henry Ford was not the first to invent the automobile.  Rather, Henry Ford became the first to figure out how to mass produce the automobile and sell it at an affordable price.

Thomas Jefferson equated free copying of ideas with the natural law: “That ideas should freely spread from on to another over the globe, for the moral and mutual instruction of man, and improvement of his condition, seems to have been peculiarly and benevolently designed by nature, when she made them, like fire, expansible over all space, without lessening their density at any point, and like the air which we breathe, move, and have our physical being, incapable of confinement or exclusive appropriation.

The Supreme Court stated: “In many instances there is no prohibition against copying goods and products.  In general, unless an intellectual property right such as a [trademark], patent, or copyright protects an item, it will be subject to copying…Copying is not always discouraged or disfavored by the laws which preserve our competitive economy…Allowing competitors to copy will have salutary effects in many instances. (See – TrafFix Devices, Inc. v. Marketing Displays, Inc.).

In Abercrombie & Fitch Stores, Inc. v. American Eagle Outfitters, Inc.,, the court stated that “In general, unless an intellectual property rights such as a patent [trademark] or copyright protects an item, it will be subject to copying.  After all, copying preserves competition, which keeps downward pressure on prices and encourages innovation.”

Trademarks, Patents, Copyrights – The Big Three of Intellectual Property

Legally protected zones of exclusivity for intellectual property rights are exceptions to the general principle of free copying and imitation.  The most prominent areas of exclusive rights of intellectual property are patents, trademarks and copyrights.  Trademarks, copyrights, and patents protect different types of intellectual property.  A trademark protects the rights of individuals or businesses which use distinctive names, designs, logos, slogans or other source identifiers to identify and distinguish their products and services.  Copyrights protect original creative expressions produced by authors, composers, artists, designers, programmers, and other creative individuals. There are three types of patents: utility, design, and plant.  Utility patents,  the most common type of patent, are granted to the inventor of a new, useful, non-obvious invention.

Two Primary Goals of Trademark Law

The two primary goals of trademark law are: 1) protecting property in the trademark; and 2) protecting consumers from confusion.  Trademark law serves to protect consumers from deception and confusion over trademarks as well as to protect the plaintiff’s infringed trademark as property. Both Congress and the Supreme Court in modern times have stressed that trademark has these two goals.  For example, in Inwood Laboratories, Inv v Ives Laboratories, Inc. the Supreme Court stated that trademark infringement “inhibits competition” and “subverts both goals of the Lanham Act” by depriving the trademark owner of good will and by depriving consumers of the ability to distinguish among goods of competing manufacturers. In the Supreme Court’s 1992 Taco Cabana decision, Justice Stevens, concurring, observed that in a Report accompanying the Lanham Act in 1946, the Senate said the Act had two goals:

The purpose underlying trademark law is twofold. One is to protect the consuming public so it may be confident that, in purchasing a product bearing a particular trademark which it favorably knows, it will get the product in which the consumer desires to purchase. Secondly, where the owner of a trademark has spent energy, time, and money in presenting to the public the product, he is protected in his investment from potential and actual misappropriation by pirates and cheats. This is the well-established rule of law protecting both the consuming public and the trademark owner.

Conclusion

As a general rule, imitating or copying a market concept or trend that is in the public domain is essential in a free market competitive economy.  Legally protected zones of exclusivity, such as trademarks, are the exceptions to the freedom to copy and imitate.  In the absence of a legally defined exclusive right and without unethical behavior or illegality present, such as bad faith, copying is permitted and encouraged, and will not be considered unfair competition.

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