merican trademark law has long operated on the assumption that there exists an inexhaustible supply of unclaimed trademarks that are at least as competitively effective as those already claimed. With respect to word marks in particular, the conventional wisdom holds that we will always enjoy a surplus of preexisting words, and in any case trademark adopters can simply coin new words, the supply of which is thought to be effectively “infinite.”1×1. Stephen L. Carter, Comment, The Trouble with Trademark, 99 Yale L.J. 759, 769 (1990) (discussing the widespread assumption that “the set of marks appropriate to a given product category is practically infinite”); see also, e.g., William M. Landes & Richard A. Posner, Trademark Law: An Economic Perspective, 30 J.L. & Econ. 265, 274 (1987) (“[T]he distinctive yet pronounceable combinations of letters to form words that will serve as a suitable trademark are as a practical matter infinite, implying a high degree of substitutability and hence a slight value in exchange.”); Frank I. Schechter, The Rational Basis of Trademark Protection, 40 Harv. L. Rev. 813, 833 (1927) (“All the rest of infinity is open to defendant.” (quoting Coca-Cola Co. v. Old Dominion Beverage Corp., 271 F. 600, 604 (4th Cir. 1921))). For further examples of the conventional wisdom, see infra notes 80–84 and accompanying text. This empirical assumption — that the supply of good, competitively effective trademarks is inexhaustible — has long formed the foundation of important theoretical conjectures at the core of trademark law and policy. The most significant of these is that when we grant exclusive rights in a trademark, the cost to competitors, consumers, and more generally to the public domain is inconsequential.
Contrary to the conventional wisdom in trademark law, however, popular media has lately begun to make the opposite empirical claim: that the supply of good trademarks is, in fact, exhaustible and that we have very nearly exhausted it. For example, the New York Times recently asserted that “[a]lmost every naturally occurring word has been claimed, which is why namers so often arrive at portmanteaus (Accenture derives from ‘accent’ and ‘future’) or drop vowels (Flickr and Tumblr) or change letters (Lyft).”2×2. Neal Gabler, The Weird Science of Naming New Products, N.Y. Times (Jan. 15, 2015), https://nyti.ms/2jD7Hh7 [https://perma.cc/459B-L4RQ]. For an overview of portmanteaux — words that blend the sounds and combine the meanings of two words — see Dick Thurner, Portmanteau Dictionary: Blend Words in the English Language, Including Trademarks and Brand Names (1993). For its part, Bloomberg View recently featured the headline “We’re Going to Run Out of Company Names.”3×3. Justin Fox, We’re Going to Run Out of Company Names, Bloomberg View (Jan. 13, 2017, 1:00 PM), https://www.bloomberg.com/view/articles/2017-01-13/we-re-going-to-run-out-of-company-names [https://perma.cc/32P7-NTWJ]. The article recalled an entrepreneur’s description of his efforts to find a name for his new company: “Every name we liked, either somebody already had it or it wasn’t trademarkable or it meant something pornographic in another language.”4×4. Id. (quoting Justin Fox, Who the Hell Is Henry Silverman?, Fortune (Oct. 27, 1997), http://archive.fortune.com/magazines/fortune/fortune_archive/1997/10/27/233303/index.htm [https://perma.cc/CAB6-A7FJ]). For the Chicago Tribune, the focus was craft beer and the headline was “Craft Beer Makers Running Out of Names. How About Flip Donkey Doodleplunk?”5×5. Rex W. Huppke, Craft Beer Makers Running Out of Names. How About Flip Donkey Doodleplunk?, Chi. Trib. (Jan. 7, 2015, 7:30 PM), http://www.chicagotribune.com/news/opinion/huppke/ct-craft-beer-names-huppke-talk-0107-20150107-story.html [https://perma.cc/H72Q-2MFN] (reporting that “craft beer brewers are struggling to find beer names that haven’t already been used, occasionally even getting in legal fights over trademarked titles”). NPR has further reported that “[v]irtually every large city, notable landscape feature, creature and weather pattern of North America — as well as myriad other words, concepts and images — has been snapped up and trademarked as the name of either a brewery or a beer.”6×6. Alastair Bland, Craft Brewers Are Running Out of Names, and Into Legal Spats, NPR (Jan. 5, 2015, 9:08 AM), http://www.npr.org/sections/thesalt/2015/01/05/369445171/craft-brewers-are-running-out-of-names-and-into-legal-spats [https://perma.cc/X8FZ-AJRV]. Bland reports that nearly every beer pun, like “Hopscotch” or “Bitter End,” has also already been claimed. Id. In response to the depletion of beer brand names, one scientist developed a software program using artificial intelligence to come up with new names for beers, such as “Yamquak,” “Dang River,” “Toe Deal,” and “Oarahe Momnilla Day Revenge Bass Cornationn Yerve of Aterid Ale.” Ryan F. Mandelbaum, We’ve Run Out of Beer Names and AI Is Here to Help, Gizmodo (Aug. 3, 2017, 10:00 AM), http://gizmodo.com/weve-run-out-of-beer-names-and-ai-is-here-to-help-1797480178 [https://perma.cc/C5RQ-NC3M]. Needless to say, some of these names seem more competitively effective than others. See infra section I.B.2, pp. 964–70 (discussing what makes a “good” trademark). For The Guardian, the focus was band names under the headline “FKA Twigs, Slaves, Deers: Are We Running Out of Band Names?”7×7. Sam Richards, FKA Twigs, Slaves, Deers: Are We Running Out of Band Names?, The Guardian (Feb. 17, 2015, 4:00 PM), https://www.theguardian.com/music/2015/feb/17/fka-twigs-slaves-deers-band-name-shortage [https://perma.cc/GVY9-NESU]. The article observed that “[a]ll the best monikers have been taken, and now the lawsuits are flying.”8×8. Id. Reports suggest that the cosmetics industry is facing similar challenges: “The beauty industry has literally run out of names to use for new product[s] . . . . Why, even the name ‘There Aren’t Anymore Names for This’ is taken.”9×9. Kathleen Lee-Joe, The Beauty Industry Has Run Out of Makeup Names, DailyLife (Jan. 16, 2015), http://www.dailylife.com.au/dl-beauty/makeup/the-beauty-industry-has-run-out-of-makeup-names-20150115-12qw2i.html [https://perma.cc/VPW9-BCJB]. Popular television series have also taken up the theme. Futurama and South Park have each featured scenes in which nearly all words or word combinations have already been trademarked.10×10. Futurama: The Problem with Popplers (20th Century Fox Television May 7, 2000); South Park: Go Fund Yourself (South Park Digital Studios Sept. 24, 2014).
Meanwhile, free speech advocates have grown increasingly vocal about the pervasive trademarking of everyday words. The YouTube duo the Fine Brothers announced in 2016 that they had applied to register the word “react,” after their series of videos.11×11. Sam Machkovech, Fine Bros Back Down, Rescind Trademark Claim on the Word “React,” Ars Technica (Feb. 2, 2016, 1:15 AM), http://arstechnica.com/business/2016/02/fine-bros-back-down-rescind-trademark-claim-on-the-word-react/ [https://perma.cc/VZJ6-6HGG]. The public reaction was critical and merciless. One commenter joked about registering the word “the” and threatened that “anyone who says it get[s] sued.”12×12. Brian Ashcraft, Popular YouTubers Try to Trademark “React” [UPDATE], Kotaku (Feb. 1, 2016, 8:00 AM), http://kotaku.com/popular-youtubers-try-to-trademark-react-1756331442 [https://perma.cc/H3JX-F8E5]. The commenter was no doubt unaware that at the time there were already eleven active trademark registrations claiming just the word THE.13×13. These findings are derived from the Trademark Case Files Dataset, which we describe in Part II. See infra Part II, pp. 973–77. Another commenter stated simply: “REACT is not yours to trademark.”14×14. Ashcraft, supra note 12. And perhaps it wasn’t: there were already three active registrations of the word in the particular class of services in which the Fine Brothers applied and thirty-seven active registrations overall.15×15. See U.S. Trademark Application Serial No. 86,689,364 (filed July 10, 2015) (applying to register REACT in International Class 41). In response to the furor, the Fine Brothers withdrew their trademark application.16×16. Machkovech, supra note 11.
To the extent that legal and popular commentary has engaged the question of the exhaustibility of the supply of trademarks, the discussion has been based at best on anecdata and at worst on raw assertion. This Article seeks to move beyond both by systematically studying all 6.7 million trademark applications filed at the U.S. Patent and Trademark Office (PTO) from 1985 through 2016 together with the 300,000 trademarks already registered at the PTO as of 1985, which is made possible by the PTO’s recently released Trademark Case Files Dataset.17×17. See infra Part II, pp. 973–77 (discussing this dataset in greater detail). We analyze the PTO data along two dimensions, which we term “trademark depletion” and “trademark congestion.” Trademark depletion is the process by which a decreasing number of potential trademarks remain unclaimed by any trademark owner.18×18. Note, as we discuss below, that we do not use the term “depletion” to refer necessarily to a decreasing number of potential marks that are actually available for adoption as trademarks. See infra section III.A, pp. 978–81 (analyzing word-mark depletion). Rather, as we use the term, depletion refers to a decreasing number of potential marks that are unclaimed by any trademark owner. By contrast, trademark congestion is the process by which an already-claimed mark is claimed by an increasing number of different trademark owners.19×19. Importantly, the phenomena of trademark depletion and trademark congestion are different from, though related to, the phenomenon of trademark “cluttering.” Cluttering refers to marks that are registered but not used in commerce by their registrants in one or more of the classes in which they are registered. See Georg von Graevenitz et al., Trade Mark Cluttering: An Exploratory Report 5 (2012), https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/312092/ipresearch-tmcluttering.pdf [https://perma.cc/BEW7-AP2R] (“[W]e define cluttered trade mark registers as registers containing such a large number of unused or overly broad trade marks, that the costs of creating and registering new marks substantially increase for other applicants.” (footnote and emphases omitted)); id. at 5 n.2 (“Overly broad in this context means seeking protection in more classes than are required.”). Cluttering is a significant problem for foreign trademark systems that do not have as strict a use requirement as that imposed by American trademark law. See id. at 9 (discussing the differences between use requirements in the United States and European jurisdictions); see also Georg von Graevenitz, Trade Mark Cluttering — Evidence from EU Enlargement, 65 Oxford Econ. Papers 721, 722, 732 (2013) (using data provided by the European Community Office for Harmonization in the Internal Market (now called the European Union Intellectual Property Office) to examine how European Union enlargement drove pharmaceutical firms to further clutter the Community Trade Mark register with registrations for marks they were unlikely to use). We address the problem of trademark clutter at the PTO in section V.B, infra pp. 1029–41. This Article focuses specifically on word marks and thus on word-mark depletion and word-mark congestion. Overall, the data show that the conventional legal wisdom is wrong and the conventional popular wisdom is right. The supply of word marks that are at least reasonably competitively effective as trademarks is finite and exhaustible. This supply is already severely depleted, particularly in certain sectors of the economy, and levels of depletion continue to rise. Those marks that are registered are growing increasingly congested. The result, as the data reveal, is that new trademark applicants are increasingly being forced to resort to second-best, less competitive marks, and the trademark system is growing increasingly — perhaps inordinately — crowded, noisy, and complex.
Specifically, the data present compelling evidence of substantial word-mark depletion, particularly with respect to the sets of potential marks that businesses prefer most: standard English words, short neologisms that are pronounceable by English speakers, and common American surnames. Together with the PTO dataset, we use the Corpus of Contemporary American English dataset of the 100,000 most frequently used words in American English and the U.S. Census’s list of the 151,672 most frequently occurring surnames in the United States to show the extraordinarily high proportion of English words and common surnames that are already registered as trademarks. We further show the remarkably low proportion of words and surnames not confusingly similar to already-registered marks. With respect to short neologisms, we use the Carnegie Mellon University Pronouncing Dictionary and LOGIOS Lexicon tool to construct a phonetic representation of each word mark applied for or registered in the PTO dataset. Based on these data, we show that the supply of short neologisms not confusingly similar to already-registered marks is substantially declining. Finally, because many trademark applicants prefer to be able to register any new mark as a domain name in the .com top-level domain, we use Verisign’s .COM Zone File consisting of some 128 million currently registered domain names in the .com top-level domain to illustrate the near-total depletion in that space of standard English words, common American surnames, and short neologisms.
Given these conditions, new applicants are increasingly resorting to suboptimal marks. The data indicate that applicants are applying less often for standard English words and common surnames and more often for more complex marks, as measured by character, syllable, and word count. We think that applicants are modifying their conduct in this manner primarily to avoid applying for marks that the PTO would refuse to register on the basis of section 2(d) of the Lanham Act,20×20. Ch. 540, 60 Stat. 427 (1946) (codified as amended in scattered sections of 15 U.S.C.). which denies the registration of a mark that, due to its similarity with an already-registered mark, would confuse consumers as to source.21×21. See 15 U.S.C. § 1052(d) (2012) (denying registration of any mark “which so resembles a mark registered in the Patent and Trademark Office, or a mark or trade name previously used in the United States by another and not abandoned, as to be likely, when used on or in connection with the goods of the applicant, to cause confusion, or to cause mistake, or to deceive”). Yet applicants appear to be increasingly unsuccessful in avoiding such refusals. We use our original dataset of all 2.1 million trademark office actions issued by the PTO from 2003 through 2016 to report the increasing rate at which the PTO is refusing applied-for marks on the basis of section 2(d). Despite these trends, one class of applicants appears to be doing fine. Incumbent applicants (those applying based on previous registrations) continue to apply for non-neologisms at a rate substantially higher than nonincumbent applicants and continue to enjoy very low section 2(d) refusal rates.
The data also reveal compelling evidence of substantial word-mark congestion. Consistent with increasing section 2(d) refusal rates, trademark applicants are increasingly resorting to what we term “parallel registrations.” Two firms can use exactly the same mark provided that their uses would not confuse consumers as to source (for example, DELTA for faucets and DELTA for airlines).22×22. We use the term “parallel registrations,” rather than “concurrent registrations,” to refer to this phenomenon. Concurrent registrations are a subset of parallel registrations. Concurrent registrations consist of registrations in which two or more different parties operating in different regions of the country register the same mark for similar goods or services when each party’s use is sufficiently geographically separate from each other party’s use that no confusion will result. See id.; see also 3 J. Thomas McCarthy, McCarthy on Trademarks and Unfair Competition § 20:81, at 20-197 (4th ed. 2017). Concurrent registrations are exceptionally rare. The PTO data indicate that for all 5.9 million Principal Register applications from 1985 through 2014, only 604 resulted in registrations subject to concurrent use. See infra Part II, pp. 973–77. Nevertheless, a trademark owner would prefer to be at best the only firm in the economy using a particular mark and at least the only firm in its economic sector doing so. Parallel uses may not confuse consumers as to source, but each use destroys the uniqueness and blurs the distinctiveness of the other, particularly for newer entrants. They also increase consumer search costs. Yet the data show steady increases in parallel registrations of frequently used English words and common surnames both across and within classes of goods and services. Firms appear to be increasingly settling for sharing marks with others.
These findings urge a rethinking of many of the fundamental assumptions underlying trademark law. Most importantly, they emphasize that the granting of trademark rights imposes real costs on the ecology of the trademark system, and that as we begin to test the limits of this ecology, these costs are mounting. New market entrants face significant barriers to entry in the form of the cost of searching for an unclaimed mark and in the ongoing cost of using a less effective mark. Consumers must cope with an ever more crowded field of trademarks consisting of increasingly complex marks that may refer to multiple different sources. The public domain must cope with the fact that, as we report below, when we use our language, about three-fourths of the time we are using a word that someone has claimed as a trademark.
These findings also counsel fundamental reforms of trademark law and doctrine. For example, given the costs a trademark registration imposes on the rest of the trademark system, particularly when the registration consists of a desirable word like a standard English word, we could enforce the use requirement more aggressively, as the PTO has already begun to do. We could also elevate the required showing of secondary meaning that an applicant must make when seeking to register a descriptive mark. In general, we could institute various schemes of congestion or peak pricing with respect to application, maintenance, and renewal fees to compel registrants to internalize more of the costs that their registrations impose on competitors, consumers, and the public domain. We could also take the degree of trademark depletion and congestion in particular sectors into account in the protectability, infringement, and trademark fair use analyses. The challenge in all cases will be to ensure that these reforms do not impose even greater costs on entrants. To be sure, many of these reforms may strike current trademark owners as unthinkable. But they are unthinkable only if we continue to fall back on the conventional wisdom that the trademark system is based on an inexhaustible resource, or in any case, that our economy could never reach a stage of development that would begin to test the limits of this resource. As we show, this conventional wisdom is wrong, and we must begin to consider ways of adapting to the limits of the trademark system.
Part I provides background on the trademark registration process and addresses the question of how to define the universe of good trademarks. Of course, the supply of possible trademarks, like the supply of possible personal names, is theoretically infinite. At the extreme, new firms could simply adopt alphanumeric codes of indefinite length to identify themselves. We explain why this is the wrong way to think about the universe of potential trademarks and why marketers rightly see this universe in very different terms. Part II describes our datasets. Parts III and IV present evidence of word-mark depletion and word-mark congestion, respectively. Though we draw upon “big data,” our evidence takes the form of straightforward descriptive statistics showing clear trends over time. Part V sets out the implications of our findings for trademark law and policy.
* John M. Desmarais Professor of Intellectual Property Law, New York University School of Law.
** Professor of Law, New York University School of Law. The authors thank David Abrams, Allen Adamson, Arnaud Ajdler, Richard Arnold, Stefan Bechtold, Jose Bellido, Joshua Blank, Ryan Bubb, Christopher Buccafusco, Colleen Chien, Adam Cox, Kevin Davis, Ben Depoorter, Deven Desai, Shari Seidman Diamond, Peter DiCola, Graeme Dinwoodie, Rochelle Dreyfuss, Rebecca Eisenberg, Eric Feder, Joshua Fischman, David Franklyn, Deborah Gerhardt, Paul Goldstein, Robert Gomulkiewicz, Scott Hemphill, Julia Hirschberg, Justin Hughes, Jeffrey Lefstin, Mark Lemley, Daryl Levinson, Paul Levy, Jake Linford, Kate Litvak, Glynn Lunney, Angela Lykos, Florencia Marotta-Wurgler, William McGeveran, Mark McKenna, Kathleen McKeown, Willajeanne McLean, Donna Mirman, Amanda Myers, Signe Naeve, Neil Netanel, Sean O’Connor, Lisa Larrimore Ouellette, Laura Pedraza-Fariña, Dragomir Radev, Lisa Ramsey, Richard Revesz, Betsy Rosenblatt, Zahr Said, Adam Samaha, Bhaven Sampat, David Schwartz, Jeremy Sheff, Peter Siegelman, Christopher Sprigman, Richard Sproat, Joel Steckel, Martyn Tipping, Rebecca Tushnet, Jeremy Waldron, Steven Wilf, Felix Wu, and Katrina Wyman, and participants in colloquia at the Benjamin N. Cardozo School of Law, Hanken School of Economics, New York University Department of Economics, New York University School of Law, Northwestern Pritzker School of Law, Oxford University, St. John’s University School of Law, Stanford Law School, U.C. Hastings College of the Law, UCLA School of Law, University of Connecticut School of Law, University of Sheffield School of Law, University of Washington School of Law, Vanderbilt University Law School, the 2017 IP Statistics for Decision Makers Conference, the 2017 Munich Summer Institute, the 2016 Workshop of the International Society for the History and Theory of Intellectual Property, the 2016 Conference of the Society for Institutional & Organizational Economics, the 2015 Works in Progress in Intellectual Property Colloquium, and the 15th Annual Intellectual Property Scholars Conference for their exhaustive comments. Thanks also to Jordan Joachim, Ryan Lawson, Caitlin Millat, Doran Satanove, and Kayla Wieche for excellent research assistance. The authors gratefully acknowledge support from the Filomen D’Agostino and Max E. Greenberg Research Fund.