Abstract
This Chapter focuses on the role of trademark goodwill in signaling environmental sustainability standards. In this view of trademark goodwill, brands potentially provide highly public platforms for interaction by firms and their customers to further various public and private policies. Brand value could play a far more significant role than it currently does to convey sustainability efforts and impacts to consumers, and thereby potentially create market-differentiation mechanisms for brand owners and increase supply chain sustainability—not to mention contribute to more meaningful choices for consumers participating in now ubiquitous global value networks. The Chapter concludes by proposing a new function of trademark goodwill, to augment and incorporate additional communicative nuance to its widely accepted signaling functions. This would expand the signal now primarily associating the trademark with its manufacturing origin and reputation to include the deeper, underlying standards and processes that the firm’s goods and services embody. In short, trademark goodwill performs a critical public, communicative function and therefore is a key public good within a regulatory governance framework for cross-border trade of environmentally sustainable goods and services.
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Notes
- 1.
The term ‘trademark’ in this Chapter is shorthand for all marks (trade marks, service marks, certification marks and collective marks) unless otherwise noted. ‘Goodwill is an intangible asset that provides added value to a trademark’s worth. A mark is a symbol of the owner’s goodwill in the business and the goods or services associated with the mark.’ International Trademark Association Fact Sheets.
- 2.
The term ‘sustainability standard’ in this Chapter refers primarily to environmental sustainability, recognizing that this term may overlap with other regulatory regimes involving sustainability criteria such as fair wages.
- 3.
Sarfaty (2015).
- 4.
Martin (2016).
- 5.
Calboli (2005, pp. 771, 804, n. 179).
- 6.
Meidinger.
- 7.
Blair et al. (2008, pp. 11–12, 14).
- 8.
Bartley et al. (2016).
- 9.
Scattered empirical or experimental work is emerging on this question. See, e.g., Sarfaty (2015).
- 10.
- 11.
Corrado and Hao (2014, p. 5).
- 12.
- 13.
International Trade Centre (2003, p. 14).
- 14.
Ibid. (original emphasis).
- 15.
Nelson (1970) (distinguishing between search goods and experience goods with the examples of a dress, which can be tried on immediately, as opposed to a can of tuna fish, which has to be opened in order for the fish to be evaluated).
- 16.
- 17.
Conroy (2007).
- 18.
World Intellectual Property Organization (2013, p. 7). (‘Overall, [several] interrelated trends stand out … companies work to create and deliver a “brand experience” for the consumer. Companies increasingly have to manage not only product quality, but also their reputation as good global citizens, paying attention to how socially and environmentally responsible they are perceived to be … [yet] branding is no longer the purview of companies alone. Increasingly, individuals, civil society organizations, as well as governmental and intergovernmental organizations are adopting an active approach to branding. … However, the reputation mechanism only works if consumers are confident that they will purchase what they intend to purchase.’).
- 19.
- 20.
Eberlein et al. (2013). These scholars, many of whom are deeply rooted with environmental studies and environmental law, proffer the TGBI framework as an analytical approach to the various interactions within this governance domain.
- 21.
Conroy (2007, pp. 9–10).
- 22.
Bartley et al. (2016, p. 8), see also Dauvergne and Lister (2011, pp. 36–45) (‘… many of the most prominent cases of private regulatory governance involve very large lead firms with more or less captive suppliers’. Big brands have typically used this governance power to squeeze suppliers to cut costs. This helps to keep retail prices low. But it can also push suppliers to cut corners (i.e., reducing environmental and social standards) to meet low-cost demands. Recognizing the drawbacks of this in terms of increased risk, brand companies are increasingly adopting corporate sustainability programs as a means to establish rules, oversight, and closer relationships with their suppliers: to work with them directly to keep production costs down through eco-efficiencies while also helping to ensure high-quality, reliable output.’) (citations omitted).
- 23.
TRIPS Agreement Chap. 16; Paris Convention Chap. 6 bis; Lanham Act section 1125(c)(2).
- 24.
Kysar (2010, p. 43).
- 25.
Cf. World Intellectual Property Organization (2013, p. 22) (‘[E]conomic research [has] clarified the distinction between a trademark as a legal instrument and a brand as a business tool. Legal scholars have similarly described trademarks as the legal anchor for the use of the commercial functions of brands.’).
- 26.
Kiser (2017).
- 27.
World Intellectual Property Organization (2013, p. 14).
- 28.
Gangjee (2013, pp. 16–17) (quoting Mülhens v OHIM – Spa Monopole (T-93/06) [2008] ECR II-93; [2008] ETMR 69 at [26]).
- 29.
Rysman (2009, p. 126) (‘whether the seller is paid based on the success of the platform with the buying side. Strikingly, one-sided and two-sided selling strategies exist side-by-side at Amazon.com. For some products, like certain new books, Amazon (basically) buys at a wholesale price and sells for a retail price, which is a one-sided model. But for many other products, Amazon provides a web portal for a producer that sets the retail price that a consumer would see. As this distinction often depends on the decisions of the intermediary rather than on purely technological features of the market, it may be better to use the term “two-sided strategies” rather than “two-sided markets.”’); see also Jane Winn, The Secession of the Successful (on file with author).
- 30.
Gangjee (2013, pp. 32–33).
- 31.
Ibid. (emphasis added).
- 32.
Austin (2016).
- 33.
- 34.
Chon (2014).
- 35.
Chon (2014).
- 36.
Gangjee (2013, p. 15). He further states that ‘within this tradition: it is often assumed that the brand owner exerts considerable control over the brand. From this perspective, successful brand management becomes a matter of finding the brand’s true and timeless essence and carrying out brand-building activities that will translate the identity into a corresponding brand image. Such thinking tracks the dominant approach to marketing in economics, which held sway until the late 1980s.’ Ibid. at 10.
- 37.
- 38.
These concepts are related to but not identical to ‘informational capitalism.’ Pessach (2016) (defining it as ‘the use of data, information and content—as means of production and circulation—for profit motivated goals and wealth accumulation.’).
- 39.
Ember (2016).
- 40.
- 41.
Goldman (2015).
- 42.
- 43.
Bartley et al. (2016, p. 29).
- 44.
Pennington (2013).
- 45.
Büthe and Mattli (2011, pp. 21–22).
- 46.
Meidinger at 24 (reporting hesitancy among managers about making public their supply chain activities).
- 47.
Ben-Shahar and Schneider (2014, pp. 185–90).
- 48.
- 49.
See e.g., Chon and Fujiye (2016) (discussing consumer behavior with regard to healthy foods).
- 50.
Weldon (2015) (‘I conclude that the evidence is inconsistent, at best, about the effect of disclosures on consumer behavior. The evidence is clear, however, about the lack of consumer enforcement of the social contract through boycott or other sustained action.’).
- 51.
PCC Natural Markets (2015) (describing a lawsuit against the US Department of Agriculture ‘over a rule changing the “Sunset” provision restricting synthetics in organic foods; [t]he lawsuit contends USDA made the rule change illegally, without following the required process’).
- 52.
See Calboli (2005) (citing to Newark Morning Ledger Co. v. United States, 507 U.S. 546, 555-56 (1993)) ‘Although the definition of goodwill has taken different forms over the years, the shorthand description of goodwill as ‘the expectancy of continued patronage,’ provides a useful label with which to identify the total of all the imponderable qualities that attract customers to the business.’ Calboli canvases many historical definitions of goodwill, many of which refer to “consumer patronage.” See also Bone (2006, pp. 547, 569) (referring to sources of consumer patronage).
- 53.
Bone (2006, p. 551).
- 54.
See also Black (2014).
- 55.
Bone (2006, pp. 551–552). As both Bone and Irene Calboli have documented, this most recent incarnation of trademark goodwill, beginning in the 1980s, marks a decisive shift in favor of viewing goodwill as a property right rather than a tort injury to one’s business reputation.
- 56.
- 57.
Woodmansee and Jaszi (1994).
- 58.
Schechter (1925, pp. 79–80).
- 59.
- 60.
Sarfaty (2015, p. 431) (‘Global supply chains frequently include multiple layers of suppliers, which may be difficult to trace and therefore regulate. Since companies often rely on first-tier suppliers to identify and audit those in the second-tier, who in turn identify and audit the next tier and so on, comprehensive monitoring by the company may not be possible. Usually, companies can locate first-tier suppliers, but those suppliers in the lower tiers are not so visible.’).
- 61.
- 62.
Conroy (2007, pp. 14–15).
- 63.
US Green Building Council LEED Certified USGBC, Registration No. 77, 199, 331.
- 64.
USPTO: ‘A copy of the relevant certification standards must be submitted when the mark owner claims use of the mark. The certification standards need not have been created by the mark owner, and may instead be standards established by another party, such as those promulgated by a government agency or developed by a private research organization.’
- 65.
Hughes (2006, p. 310) (discussing common-law rights in regional certification marks).
- 66.
Chon (2009).
- 67.
PCC Natural Markets (2015) (describing a lawsuit against the US Department of Agriculture ‘over a rule changing the “Sunset” provision restricting synthetics in organic foods; [t]he lawsuit contends USDA made the rule change illegally, without following the required process’).
- 68.
Cramer et al. (2014).
- 69.
Heavner and Justus (2009).
- 70.
Hass (2010, p. 602) (claiming that the organic label is not appropriate for wild-caught fish and will fall short of consumer expectations because there is no way to determine a wild-caught fish’s diet throughout its lifespan, and 100% organic feed is not fed to fish with an organic label).
- 71.
Fiser (2007).
- 72.
Friedland (2005). (‘The regulations allow organic farmers whose crops have been contaminated by pesticides … to nonetheless sell those crops as organic. Organic farmers who refused to knowingly sell contaminated crops, or who paid for expensive testing of their crops to ensure that they did not do so, would be at a competitive disadvantage to organic farmers who merely complied with the ... regulations’ requirements. Moreover, because consumers do not understand that the regulations allow contaminated crops to be sold as organic, and because this lack of understanding increases demand for organic food, organic farmers also have an incentive to maintain consumers’ misperceptions about organic food.’); see also Kruse (2006, pp. 516–17) (describing challenge by University of Wisconsin to organic certified dairy produced by factory farms).
- 73.
- 74.
The Environmental Working Group, https://www.ewg.org/ Accessed 1 April 2018.
- 75.
- 76.
Jagers (2017, pp. 314–15) (‘Guiding Principle 21 states: [i]n order to account for how they address their human rights impacts, business enterprises should be prepared to communicate this externally, particularly when concerns are raised by or on behalf of affected stakeholders. Business enterprises whose operations or operating contexts pose risks of severe human rights impacts should report formally on how they address them. In all instances, communications should: (a) Be of a form and frequency that reflects an enterprise’s human rights impacts and that are accessible to its intended audiences; (b) Provide information that is sufficient to evaluate the adequacy of an enterprise’s response to the particular human rights impact involved; (c) In turn not pose risks to affected stakeholders, personnel or to legitimate requirements of commercial confidentiality.’).
- 77.
Ibid. (citing Melish and Meidinger 2011).
- 78.
- 79.
Chilton and Sarfaty (2016, p. 47).
- 80.
Oxfam (2014).
- 81.
Dauvergne and Lister (2011, pp. 36–45) (‘Beyond direct commercial gains, brand companies are implementing environmental policies across their supply chains to achieve more intangible, indirect benefits, namely risk management and stronger brand reputation. This includes increasing supplier transparency and accountability about their practices, which the brand companies are using for identifying, assessing and limiting risks, as well as increasing consumer trust. From a Disney T-shirt to a Dole organic banana, consumers can now scan with their smart phone or go online to trace a product from the farmer to the retail shelf. Big brands are employing business tools like supply chain tracing, product life-cycle assessments, and supplier audits to reveal environmental “hotspots” and reduce exposure to questionable practices by poor-performing producers: from illegal sourcing to the use of hazardous chemicals. Addressing these risks is increasingly imperative, not just to guard brand reputation, but also to avoid regulatory penalties.’)
- 82.
Dauvergne and Lister (2010, pp. 132–154).
- 83.
Dauvergne and Lister (2011, pp. 36–45).
- 84.
Ibid. at 3.
- 85.
Meidinger (on file with author) at 14 (‘Together for Sustainability[TfS], founded in 2011 by the chief procurement officers of six multinational chemical companies … ‘is to develop and implement a global audit program to assess and improve sustainability practices within the supply chains of the chemical industry.’’).
- 86.
- 87.
Dauvergne and Lister (2011).
- 88.
See e.g., Josh Simko’s discussion of Making, powered by Nike (http://nikemakers.com/#/) (on file with author).
- 89.
Chon (2014), intrapreneurs are internal advocates within recognizable industry brands who are attempting to hold the brands accountable to rhetoric of the triple bottom line (people, planet, and profits) popularized in corporate social responsibility literature.
- 90.
The UN has committed recently to seventeen post-2015 sustainable development goals (SDGs) related to the project of ‘free[ing] the human race from the tyranny of poverty.’ http://www.un.org/ga/search/view_doc.asp?symbol=A/69/L.85&Lang=E; see generally http://www.un.org/sustainabledevelopment/. These seventeen goals include to ‘[t]ake urgent action to combat climate change and its impacts.’ www.un.org/sustainabledevelopment/climate-change-2/.
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Chon, M. (2018). Trademark Goodwill and Green Global Value Networks. In: Rimmer, M. (eds) Intellectual Property and Clean Energy. Springer, Singapore. https://doi.org/10.1007/978-981-13-2155-9_10
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