The Expansion of Trademark Property Rights

By: Athena Sharifkazemi (Researcher on Law and technology, University Of Roma Tre, ITALY)

I. Introduction: The Dialectic of Modern Trade Mark Jurisprudence

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The classical architecture of trademark law was built on a delicate socio-economic balance designed to benefit society as a whole. In traditional legal theory, protecting distinctive signs was never viewed as an absolute property right in gross. Instead, it functioned as a regulatory marketplace tool to enhance efficiency and protect consumers from deception. Under this model, trademarks served a dual purpose: they economically lower consumer search costs by providing a reliable indicator of source, as Landes and Posner note, while incentivizing producers to invest in quality.[1]This framework neatly aligned private interests with social needs, limiting legal protection to preventing consumer confusion.

​However, modern international trademark systems reveal a troubling shift. Today, trademarks are increasingly detached from their source-indicating roots, transformed instead into autonomous macroeconomic assets valued for their intrinsic brand equity. This aggressive propertization grants expansive protection regardless of market context or actual consumer confusion. This systemic bias heavily favours right holders at the expense of the public interest. Ultimately, this expansion threatens to encroach upon the public domain, stifle fair competition, restrict expressive liberties, and deplete the shared cultural and linguistic vocabulary essential for healthy public discourse.[2]

The judicial acceptance of this commercial reality and the related shift toward protecting the intangible, psychological aspects of branding is not just a modern development. In the landmark ruling Mishawaka Rubber & Woolen Mfg. Co. v. S.S. Kresge Co., the United States Supreme Court clearly recognized that a trademark is a powerful commercial tool that goes beyond its basic function as a source identifier. Writing for the Court, Justice Frankfurter notably observed:

​​”The protection of trade-marks is the law’s recognition of the psychological hold of a trade-mark on the public mind. A success has got to be establishment of a competitive trade-mark. If another poaches upon the commercial magnetism of a symbol he has created, the owner can obtain legal redress.”[3]

This early legal mention of “commercial magnetism” built the conceptual foundation for treating trademarks as property. By defining the legal wrong not just as misleading the buying public, but as the unauthorized “poaching” of a symbol’s psychological and emotional value, Mishawaka Rubber anticipated the current expansionist path of trademark law a direction that regularly values corporate goodwill over the public’s interest in a free, non-monopolized market.

II. The Theoretical Shift: From Consumer Protection to Pro-Owner Property Rights

​To grasp the current state of trademark overprotection, we need to follow the theoretical shift of the core legal reasoning from a tort-based unfair competition framework to an absolute property rights model. Historically, trademark law fell under the umbrella of unfair competition, mainly working through the common law tort of passing off or similar statutes meant to stop consumer deception. The focus of protection wasn’t the mark itself, but rather the consumer’s right to avoid confusion and the merchant’s right to protect their specific trade profits. As Mark Lemley sharply noted in The Modern Lanham Act and the Death of Common Sense, the fast growth of trademark scope during the late twentieth and early twenty first centuries has systematically broken down these traditional limits.[4] The modern legal system has turned its main goal from “protecting consumers from deception” to “protecting owners from misappropriation,” basically changing an anti-fraud tool into an expansive enclosure of language and commercial space.

This shift toward a pro-owner property model is basically driven by two connected legal trends: the massive expansion of what can be protected and the direct legal protection of a mark’s secondary “investment and advertising functions”. Under old statutory systems, registration was strictly limited to traditional, visually clear signs like words, logos, and specific graphic designs. Under the modern international framework, however, the idea of a protectable sign has become incredibly flexible. Article 16.1 of the TRIPS Agreement, read along with Article 15, sets up the basic exclusive right to stop unauthorized use that causes a likelihood of confusion, but leaves it open for national courts to register non-traditional marks. As a result, current legal systems now regularly grant exclusive property rights over sounds, sensory shapes, scents, and single, isolated colours. In my view, this growth naturally tilts the law in favour of wealthy corporate actors who have the financial power to aggressively claim and control these abstract aesthetic features, usually at the expense of public access and fair market competition.

The peak of this expansionist doctrinal shift is shown by the different comparative methods to registering single-colour marks. In the United States, the Supreme Court faced this conceptual boundary in Qualitex Co. v. Jacobson Products Co., Inc. The Court decided that a colour alone namely, a specific green-gold shade used on dry cleaning press-pads could satisfy the legal tests of a trademark under the Lanham Act, as long as it had gained “secondary meaning” (distinctiveness through market use) and wasn’t functional. Justice Breyer, writing for a unanimous Court, claimed that colour can serve as a symbol that points to a source, and that no clear legal ban stopped a single colour from being treated as property. While Qualitex used the functionality rule as a shield to avoid competitive harm, the decision deeply backed the pro-owner view: it allowed businesses to monopolize specific parts of the visual spectrum, if they could show enough market saturation.[5]

On the other hand, the Court of Justice of the European Union (CJEU) took a more careful, public-interest-focused path when dealing with the same problem in Libertel Groep BV v. Benelux-Merkenbureau. Faced with a request by a telecom company to register the colour orange per se, the CJEU clearly pointed out the danger of shrinking linguistic and cultural resources that comes with pro-owner expansion. The Court decided that though a single colour could theoretically have a distinctive character, the proper authorities must carry out a strict review that considers the public interest. The CJEU noted:

​”The public interest must not be unduly restricted by granting a monopoly on a single colour. Account must be taken of the fact that there is a limited number of colours available, and that a single enterprise should not be permitted to deplete the available spectrum to the detriment of its competitors or the public at large.”[6]

​The Qualitex and Libertel cases capture the core tension in modern trademark theory. Although both systems theoretically embrace a property-based model, Europe’s approach in Libertel acknowledges that granting exclusive private rights over basic visual elements imposes a structural cost on society. By shifting from the traditional consumer protection standards of Article 6septies of the Paris Convention and Article 16(1) of TRIPS toward protecting abstract signs as independent property, contemporary trademark law inherently favours rights holders. Consequently, the legal framework has evolved from facilitating market transparency to undermining open competition, enabling corporations to monopolize the cultural, sensory, and linguistic raw materials of the public domain.

III. Pro-Owner Expansionism: Dilution, Free-Riding, and the Protection of Brand Equity

The modern shift toward pro-owner expansionism within trademark law is best exemplified by the global adoption of anti-dilution doctrines and rules against “free riding”. Traditional infringement frameworks strictly require proof of consumer confusion to establish liability. In contrast, the contemporary anti-dilution model protects a trademark’s independent commercial value, irrespective of product similarity or actual consumer deception. This shift fundamentally transforms trademarks from mere regulatory tools designed to ensure market transparency into absolute property rights in gross. As Frank Schechter pointed out, the real economic harm to a famous brand is not that consumers mistake the source, but rather the gradual erosion and blurring of the mark’s distinct “commercial magnetism”. By codifying these protections, both international treaties and domestic laws have handed major corporate entities broad veto power over unauthorized third-party usage. Consequently, this legal framework shields established brand equity while simultaneously creating high barriers to entry for new competitors, ultimately stifling the dynamic process of competitive imitation.

Globally, this pro-owner shift is deeply integrated into the TRIPS Agreement. Articles 16.2 and 16.3 of TRIPS go beyond the basic requirement of source indication by expanding protection for well-known marks to unrelated goods or services. Specifically, Article 16.3 requires protection when unauthorized use suggests a connection between those goods or services and the registered trademark owner, provided the owner’s interests face potential damage. This international standard treats a famous brand’s reputation as an independent asset that deserves legal protection, a concept widely mirrored in comparative domestic jurisprudence.

​In the United States, legislative history highlights the strong lobbying and judicial debates over transforming trademarks into property. After the US Supreme Court demanded strict proof of actual economic harm in Moseley v. V Secret Catalogue, Inc., corporate owners successfully pushed for the Trademark Dilution Revision Act (TDRA) of 2006. The TDRA explicitly lowered this evidentiary standard to a mere “likelihood of dilution”. It formally codified statutory definitions for both “dilution by blurring” which weakens a mark’s distinctiveness and “dilution by tarnishment” which harms a mark’s reputation. This legislative evolution highlights an institutional preference for safeguarding corporate goodwill over the public’s right to use non-confusing, ordinary words in separate markets.[7]

This pro-owner trend is equally visible, and perhaps even stronger, in European case law through the judicial development of the “anti-free-riding” doctrine. Under Article 10(3) of the EU Trademark Regulation, a proprietor can prevent any use that, without a valid reason, takes unfair advantage of, or harms, the distinctive character or reputation of the trademark. A landmark application of this rule came in L’Oréal SA v. Bellure NV, a dispute involving the marketing of imitation perfumes designed to mimic the look and scent of original brands. The Court of Justice of the European Union (CJEU) clearly determined that a defendant takes unfair advantage of a famous mark if they attempt to ride on its coat-tails to capitalize on its power of attraction, reputation, and prestige. Significantly, the CJEU confirmed that liability applies even without any likelihood of consumer confusion, impairment to the mark’s distinctiveness, or direct loss of commercial sales.[8]

​This interpretation of “free riding” essentially treats brand reputation as an absolute right to block any secondary economic advantages. As critics argue, this broad property approach ignores the competitive benefits of look-alike or comparative alternatives, which typically lower consumer prices. By extending protection to the abstract advertising and investment functions of a brand, modern judiciaries have turned trademark law into a tool that punishes competitive imitation. Ultimately, this shifts the macroeconomic balance heavily toward corporate interests over public benefit.[9]

IV. Public Interest Safeguards: Counter-Balancing the Scale

​The rapid expansion of exclusive brand rights has faced notable resistance from legal scholars and authorities. To prevent trademark law from becoming a permanent tool for linguistic and market monopolization, international frameworks rely on statutory exceptions and defensive doctrines to protect the public interest. In my view, these safeguards serve as a critical check, ensuring that private commercial rights give way to the demands of market competition, consumer choice, and the preservation of a shared cultural vocabulary.

This defensive framework is internationally grounded in Article 17 of the TRIPS Agreement, which explicitly allows WTO members to offer limited exceptions to trademark rights, such as the fair use of descriptive terms. However, these exceptions must consider the legitimate interests of both the trademark owner and relevant third parties. Ultimately, Article 17 functions as a crucial safety valve, ensuring that granting exclusive rights does not accidentally allow a corporation to monopolize ordinary descriptive words or functional features that other businesses absolutely need to compete fairly in the market.

The strongest legal tool against the monopolization of essential competitive mechanisms is the functionality doctrine, combined with the concept of genericization (genericide). The legal system recognizes that if a company can monopolize a functional feature or an ordinary, generic name via trademark law, it could secure an indefinite monopoly, effectively bypassing the strict duration limits set by patent law. The foundational global precedent for this public interest limit is the US Supreme Court ruling in Kellogg Co. v. National Biscuit Co.[10] By denying trademark protection for the term “Shredded Wheat” and the pillow-like shape of the cereal, the Court established that the term was generic and the design was functional. Justice Brandeis highlighted that once the underlying patent expires, the right to manufacture the product in that exact shape passes into the public domain. This principle shows that society’s interest in open competition and public access to goods clearly outweighs the private investments or historical goodwill of any individual manufacturer.

Apart from excluding generic or functional items, public interest is actively protected through the descriptive fair use defence. Since trademark offices often allow the registration of descriptive terms that have gained a secondary meaning, the legal system must guarantee that competitors can still use those exact words in their original, literal sense to describe their own products. The distribution of the burden of proof in this area was importantly clarified by the US Supreme Court in KP Permanent Make-Up, Inc. v. Lasting Impression I, Inc.[11] The Court decided that a defendant using the statutory defence of descriptive fair use under the Lanham Act does not have to prove that their usage is entirely unlikely to cause consumer confusion. This ruling represents a major victory for public interest advocates. By placing the final burden of proving a likelihood of confusion entirely on the plaintiff, the Court stopped famous brand owners from using the threat of litigation to intimidate smaller competitors out of utilizing legitimate descriptive language.[12]

Ultimately, defensive tools like functionality, genericide, and descriptive fair use serve as vital protections. Without these boundaries, the ongoing growth of trademark rights would restrict the shared vocabulary available to the public. If corporations could indefinitely block competitors from using functional designs, generic terms, or common descriptive words, everyday market language would become monopolized. These restrictions clearly demonstrate that while trademark law has grown to favour brand owners, it must rely on competitive exceptions to stay fair and socially balanced.

​V. Conclusion: Re-calibrating the Trademark Balance

​ In conclusion, trademark law has clearly shifted toward treating commercial signs as absolute property rights. By moving away from the traditional anti-fraud model focused strictly on consumer confusion, modern courts and treaties have heavily tipped the scale in favour of brand owners. Whether it is the inclusion of non-traditional marks like colours and shapes, the codification of dilution under the TDRA, or Europe’s strict anti-free-riding rules, a brand’s psychological appeal is now protected as an independent asset. Ultimately, this current framework prioritizes corporate investment at the expense of free competition and open public communication.

​However, trademark law is not entirely controlled by corporate monopolies. As shown by the European Court’s careful approach in Libertel and the limits set by Article 17 of the TRIPS Agreement, public interest protections still play an essential part in the system. Doctrines like functionality, genericide, and descriptive fair use act as necessary checks. They prevent large companies from locked-up everyday words or functional product shapes, making sure that these basic linguistic and visual tools remain available to everyone.

​ Ultimately, while current trademark law favours right holders, it does not completely ignore the public interest; rather, the entire system operates under a constant tension between private control and public access. In my view, to prevent corporations from enclosing language and common market features, courts must strictly enforce public exceptions. Trademark protection should remain a limited privilege dependent on market fairness, rather than an absolute property right operating to the detriment of society.

​Footnotes

1. ​William M. Landes and Richard A. Posner, The Economic Structure of Intellectual Property Law (Harvard University Press 2003) 166.
2. ​Frank I. Schechter, ‘The Rational Basis of Trademark Protection’ (1927) 40 Harvard Law Review 813, 825.
3. ​Mishawaka Rubber & Woolen Mfg. Co. v. S.S. Kresge Co., 316 U.S. 203 (1942).
4. ​Mark A. Lemley, ‘The Modern Lanham Act and the Death of Common Sense’ (1999) 108 Yale Law Journal 1687, 1715.
5. ​Qualitex Co. v. Jacobson Products Co., Inc., 514 U.S. 159 (1995).
6. ​Libertel Groep BV v. Benelux-Merkenbureau, Case C-104/01, [2003] ECR I-03793.
7. ​Moseley v. V Secret Catalogue, Inc., 537 U.S. 418 (2003).
8. ​Trademark Dilution Revision Act of 2006 (TDRA), 15 U.S.C. § 1125(c).
9. ​L’Oréal SA v. Bellure NV, Case C-487/07, [2009] ECR I-05185.
10. ​Annette Kur and Martin Senftleben, European Trade Mark Law: A Commentary (Oxford University Press 2014) 278-281.
11. ​Kellogg Co. v. National Biscuit Co., 305 U.S. 111 (1938).
12. ​KP Permanent Make-Up, Inc. v. Lasting Impression I, Inc., 543 U.S. 111 (2004).
13. ​J. Thomas McCarthy, McCarthy on Trademarks and Unfair Competition (5th edn, Thomson Reuters 2024) § 23:11.

Bibliography

​Primary Sources

​International Treaties

• ​Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement) 1994.
• ​Paris Convention for the Protection of Industrial Property 1883.

Case Law (United States)

• ​Kellogg Co. v. National Biscuit Co., 305 U.S. 111 (1938).
• ​KP Permanent Make-Up, Inc. v. Lasting Impression I, Inc., 543 U.S. 111 (2004).
• ​Mishawaka Rubber & Woolen Mfg. Co. v. S.S. Kresge Co., 316 U.S. 203 (1942).
• ​Moseley v. V Secret Catalogue, Inc., 537 U.S. 418 (2003).
• ​Qualitex Co. v. Jacobson Products Co., Inc., 514 U.S. 159 (1995).

​Case Law (European Union)

• ​L’Oréal SA v. Bellure NV, Case C-487/07, [2009] ECR I-05185.
• ​Libertel Groep BV v. Benelux-Merkenbureau, Case C-104/01, [2003] ECR I-03793.

​Secondary Sources

​Books

• ​Kur A and Senftleben M, European Trade Mark Law: A Commentary (Oxford University Press 2014).
• ​Landes WM and Posner RA, The Economic Structure of Intellectual Property Law (Harvard University Press 2003).
• ​McCarthy JT, McCarthy on Trademarks and Unfair Competition (5th edn, Thomson Reuters 2024).

​Journal Articles

• ​Lemley MA, ‘The Modern Lanham Act and the Death of Common Sense’ (1999) 108 Yale Law Journal 1687.
• ​Schechter FI, ‘The Rational Basis of Trademark Protection’ (1927) 40 Harvard Law Review 813.

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