Too good, too bad: the popularity punishment

It is said in competition law that the market awards the strongest and fairest competitor with client fidelity, intellectual property protection and other legal or economic mechanisms meant to support a fair competitive market. Yet, reality shows otherwise. In the UK and USA, a trademark can be so popular that it becomes generic, i.e. it is no longer protected as a trademark. This norm looks like a punishment for being too good and too popular, which is exactly what companies are encouraged to do.

For instance, imagine that Google becomes google (which has not yet happened according to the US courts). This means that any searching engine could use google in their name or advertisements leaving Google with no real way of identifying its own products. This situation (that has happened before, for example, with aspirin) is problematic in two ways: it creates a market anomaly and it may harm the consumer.

First, when I say it creates a market anomaly, I am referring to a wrong distribution of resources and awards among competitors. Companies work hard and invest billions in making their trademark unique, recognisable and popular among the general public. When it comes to products that have little variation except for the trademark, the popularity of this indicator becomes the real competitive advantage. People do not use Google because it is the best (in fact there are other less popular searching engines that are more efficient or more transparent) but because it is the most popular one. Why Google? Because everyone googles. Thus, after years of work and investment, Google could lose precisely what makes it so great… its popularity. In this context, why would firms pay so much to become popular if that means they will lose their trademarks?

Secondly, the generic trademark idea is unfair for customers who are not always aware of such technical procedures. Imagine that Google did in fact become generic. For a time, not all customers will be familiar with google as a generic term. Therefore, when such customers find a searching engine with a reference to google in its name, they will automatically associate it with Google. Thus, they will end up using products they did not initially intend to use.

Is it really fair to punish the work of those firms?


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