[wg-c] Yesterday's S.C. Decision

[Harold Feld <hfeld@mediaaccess.org>]

While not overstating the importance of yesterday's Supreme Court decision to our
discussions here (that case dealt with trade dress, not domain names or even word or symbol
marks), it does contain language pertinent to our discussions here.  Notably, that there inheres
in trademark law (for all its pro-consumer functions and purposes) an anti-competitive danger.

For those who haven't seen it, yesterday's decision in Walm-Mart Stores
v. Samara can be found at
http://supct.law.cornell.edu/supct/html/99-150.ZO.html.

"   The fact that product design almost invariably serves purposes other
than source identification not only renders inherent distinctiveness
problematic; it also renders application of an inherent-distinctiveness
principle more harmful to other consumer interests. Consumers should not
be deprived of the benefits of competition with regard to the
utilitarian and esthetic purposes that product design ordinarily serves
by a rule of law that facilitates plausible threats of suit against new
entrants based upon alleged inherent distinctiveness. How easy it is to
mount a plausible suit depends, of course, upon the clarity of the test
for inherent distinctiveness, and where product design is concerned we
have little confidence that a reasonably clear test can be devised. ...

   It is true, of course, that the person seeking to exclude new
entrants would have to establish the nonfunctionality of the design
feature, see §43(a)(3), 15 U.S.C. A. §1125(a)(3) (Oct. 1999 Supp.)–a
showing that may involve consideration of its esthetic appeal, see
Qualitex, 514 U.S., at 170. Competition is deterred, however, not merely
by successful suit but by the plausible threat of successful suit, and
given the unlikelihood of inherently source-identifying design, the game
of allowing suit based upon alleged inherent distinctiveness seems to us
not worth the candle."

A similar problem confronts us in domain names.  Domain names have a functional
component, but also a component as a source identifier. We should recall that
consumers (although this term is difficult on the Internet where the line between
consumer and producer blurs) should not be denied the functional benefits of TLDs
because some names also serve as protectable source identifiers; nor should we be blind
to the anti-competitive effect that results from elevating the source identifier function
at the expense of the functional benefit and utility.

Harold