David Simon: Trademark Law and Consumer Safety

I was happy to read David Simon's new article, Trademark Law and Consumer Safety, forthcoming in the Florida Law Review. Simon argues trademark law should pay more attention to the physical harms that products pose for consumers, rather than just economic harms. The conventional view is that trademark law exists to prevent consumer confusion and lower consumers' search costs for finding the products they want. At the same time, trademark law protects sellers' investments in product quality and advertising.

Simon's article argues that trademark law does, or should do, a lot more than this: it should protect consumers from physical injury.

Simon begins with the following example. Imagine a consumer seeks a supplement to make her brain work better. By protecting the trademark BRAINSTRONG for a pill claiming to perform this function, trademark law helps consumers find the pill they want by preventing consumers from mistakenly buying a fake version sold by another infringing seller. The law also protects the investments of the real seller of BRAINSTRONG in making its pills work as claimed and in advertising the pills to consumers.

But Simon draws attention to the physical side of this story. He observes that some trademarks, like BRAINTSTRONG in this example, implicate health and safety. There are two avenues for this. First, what if the consumer buys a fake version of the pill by a trademark infringer, and the fake pill has devastating effects on her mind and body? Second, what if the consumer buys the real BRAINSTRONG, and it has devastating effects on her mind and body?

Simon focuses his article on the second avenue: where the seller of the real pill is overstating or simply lying about the effects of its product, in a way that potentially results in physical injury.  As I'll explain in a second, I think the first effect - trademark law's protection of consumers from fakes - is more significant. But let me first explain Simon's argument.

Simon argues that the Section 2 bars for misleading marks are not as effective as they could be at preventing sellers from making false or misleading claims about their products. Under 2(a), "deceptive" marks, that misdescribe a material attribute of a good or service in a way that the consumer is likely to believe, cannot be registered as trademarks. If the misdescription isn't "material", however, because it doesn't affect the consumer's purchasing decision, it can be registered, albeit only on a showing of secondary meaning.

So, in the BRAINSTRONG example, Simon sees a problem.  What if this BRAINSTRONG trademark, even if it's properly distinctive of a source, is making people think (wrongly) that the pills will help their brains, when the pills will not do so, and may even cause or exacerbate serious physical ailments. The "materiality" limitation I just mentioned is a problem because BRAINSTRONG, even if somewhat deceptive, could still be registered if the deception does not affect the consumer's decision to purchase the pill.  (25).  In other words, maybe the consumer buys BRAINSTRONG anyway, even if she knows there is a high chance it won't work or even a small chance it might hurt her.

My favorite example of the "materiality" limitation on the deceptiveness bar is the GLASS WAX trademark upheld in Gold Seal Co. v. Weeks. The court allowed GLASS WAX for a very popular window cleaner with no wax in it, because the court figured consumers would not care. There was nothing in the record, the court wrote,

"which would show that anyone would have felt actually deceived if informed that there was no wax in the product. … To the contrary, it appears that the product satisfies the needs of the customers; that the average or ordinary customer cares little about, and knows little about, the scientific composition of the product."

GLASS WAX shows a court being laissez faire when it comes to technically misdescriptive names. Consumers are supposed to get to make up their own minds about what 'satisfies their needs.' (The examples in the beauty industry abound.  Take the currently registered trademark HAIR NO MORE for a "hair growth inhibiting spray mist and gel." Clearly, it's not literal.  Or I hope not!)

Another part of Simon's argument relates to the Abercrombie spectrum's division between "suggestive" marks, which required consumers to use imagination to tell what's being sold and are thus treated as "inherently distinctive," and "descriptive" marks, which are pretty obviously descriptive of the product and can only be registered with a showing of "secondary meaning" (i.e. consumers have to see the primary significance of the mark as indicating a source).

Simon argues trademark law's preference for "suggestive" marks creates additional incentives to choose marks that at the end of the day are a bit misleading. For example, he argues that if a company chooses a mark like BABY SAFE for pool fencing, instead of say FENCE-A-POOL, the company can more likely register the mark without proving secondary meaning, since it's not directly descriptive of what the product really does. (26-27).

I am not sure this is necessarily true. Those slightly misleading marks might still be classified under 2(e)(1) as " merely ... deceptively misdescriptive ..." This would showing require secondary meaning in the same way as a merely descriptive mark under 2(e)(1).

But his point is still well taken. The "materiality" limitation to the deceptiveness bar means, as a general matter, that marks can, at least with secondary meaning, be registered so long as consumers don't care all that much. There could well be built-in pressures to misdescribe a product so as to potentially achieve a suggestiveness classification on the Abercrombie spectrum. (Even if I think 2(e)(1) deceptively misdescriptive might kick in there).

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I think Simon is really on to something in focusing on trademark law's and the Lanham Act's role in regulating consumer safety.  I just don't think the "hot zone" for this regulation is the Section 2 bars for "deceptive" trademarks or the Act's preference for "suggestive" marks. There are several other places I would look for real regulation originating in the Lanham Act.

False Advertising Provision

First, the most obvious contender is Lanham Act 43(a)(1)(B)'s false advertising provision, which as Simon mentions, is the main way the Lanham Act polices false statements in commercial advertising or promotion. There is a "materiality" requirement in the false advertising context, since generally plaintiff has to prove the false statement was material to the decision to purchase the product. But there are plenty of ways to achieve a presumption of materiality. I think most of the examples Simon gives would expose the seller to a false advertising claim, and even lead to a presumption of materiality, for instance if the statement like BRAINSTRONG or BABY SAFE is deemed "literally false," or if it goes to the heart of the reason the consumer is buying the goods (e.g. brain performance, baby safety). See generally https://tushnet.blogspot.com/.

Certification Marks

Second, the other more direct place where the Lanham Act regulates consumer safety is through certification marks, which are obtained by third party entities on a standard, and which can be used by individual sellers to certify products as safe. I wrote about certification marks in a prior post, Jeanne Fromer: Should We Regulate Certification Marks?

I also enjoyed reading Margaret Chon's recent book chapter, Certification and Collective Marks in the United States. This contains a clear, insightful summary of definitional elements, key differences from regular trademarks, and recent case law on issues like types of confusion that count in certification mark infringement. Of particular relevance to Simon's topic, Chon observes, in this chapter and in other articles, that certification marks have the potential to increase social welfare by ensuring products sold under a certification comply with its standards respecting health and safety.

Regulation Through Source-Identification

Third, trademark law itself does do a lot of regulating through its source-identification function. I have always had more faith than many commentators in the work trademarks do in protecting buyers from physical harm. The issue is far broader than Simon suggests. The main purpose of trademark law (this consumer might argue) is to protect people from infringing goods that haven't been vetted by the buying decisions of consumers.

If I buy real BRAINTSTRONG pills that have been on the market for, say, over five years, I have no assurance from regulators that they are safe, since supplements aren't typically regulated by the FDA; but I do have assurance that other people have been buying these pills, coming back to the source, rather than choosing not to buy them. This is trademark's regulatory function.  If I come across a fake of BRAINTSTRONG pills, on the other hand, I do not have this assurance. I may be more likely to suffer serious physical harm as a result.

Obviously, this doesn't work as well for "credence" characteristics and harms people may never learn about. But I've always seen other Lanham Act provisions like the deceptiveness bar, false advertising, and certification marks, as filling in gaps where trademark law's source-identifier regulatory function fails.

That said, in her work Chon has consistently observed a tension between, on the one hand, the Lanham Act's "market-based approach to regulation," which relies heavily on marks to accurately convey product qualities to consumers, and on the other hand, true top-down regulation in the sense of protecting safety, health, and environment. This seems very much aligned with Simon's viewpoint and concerns.
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In sum, I really enjoyed this article and found it creative and extremely thought-provoking.