Trademark scholars love to hate the merchandising right (i.e., the use of trademark law to give trademark owners control over product markets in which the trademark is the good—e.g., a BOSTON RED SOX baseball cap). We think that trademark law should protect consumer interests. If no one thinks that sports teams manufacture their own merchandise, then there’s no possibility of source confusion. Rather than benefitting consumers, the merchandising right artificially increases consumer costs by giving trademark holders an unwarranted monopoly over the use of their marks as products.
Nobody cares. Whatever law professors may think, people—and importantly, judges—generally believe that trademark holders should control merchandising markets. Hard-wired moral intuitions suggest that the resulting profits are a fair reward for creating popular brands and that others should not “free ride” off of these efforts. These intuitions are resistant to argument. We are therefore likely stuck with the merchandising right.
Nonetheless, the merchandising right is inconsistent with fundamental trademark doctrine. Accommodating it creates difficulties that ripple throughout trademark law and reach cases that have nothing to do with merchandising logos. The problem is especially acute in those cases in which it is the trademark owner who is trying to capture an unearned benefit. These cases turn the intuitions behind the merchandising right on their head, but courts do not have a vocabulary for distinguishing them from “traditional” merchandising disputes. The result is a muddle that affects trademark law as a whole.
We might ameliorate the problem by taking anti-free riding moral intuitions seriously. If they are to be part of trademark law, then they may be used to limit the merchandising right and reconcile it to trademark law. To be sure, living with the merchandising right is hardly an optimal result, but if the right is here to stay, we may as well contain its scope and craft a trademark doctrine that comports with the moral intuitions of the judges who implement it.
