Have Trade Marks and Brands Reached Their Hound of the Baskervilles Moment?

Katnote: since this piece was posted, the Kats have been kindly reminded by dozens of keen readers from all round the world that the story by Sir Arthur Conan-Doyle in which the dog does not bark is Silver Blaze, not The Hound of the Baskervilles. However, any confusion, if made by a Kat of American origin (as indeed Neil is), is perfectly understandable.  In 1937, a British film version of 'Silver Blaze' was released, starring Arthur Wontner as Holmes and Ian Fleming as Watson. Curiously, when this film was released in the US in 1941, it was released as 'Murder at the Baskervilles' even though a word-search of the text of Silver Blaze suggests that the word 'Baskerville' does not appear in it at all.

Merpel is puzzled by two further curiosities. The fist is that neither the dog in Silver Blaze nor the hound of the Baskervilles appear to have been given a name; the second is that the word "bark" does not appear in The Hound of the Baskervilles.

This Kat will sometimes give recognition when due to his canine cousins. The following item is such a situation. In particular, this Kat wants to consider whether trade marks have reached a "hound of the Baskervilles" moment. As many Kat readers will likely know, The Hound of the Baskervilles is the best-known of the Sherlock Holmes novels penned by Sir Arthur Conan-Doyle. In the book, Holmes reaches a solution upon asking the question: why didn't the dog bark? Similarly, this Kat wants to consider the question why trade marks seem so immune from intellectual challenges –why isn't there more "barking" about the current state of trade marks and brands?

Think about patents and copyright. The patent system is under siege on grounds that too many bad patents are being issued and that the rise of the patent troll is making a mockery of what patents are supposed to protect. As well, copyright has been under challenge, first by those who view the online world as incompatible with traditional notions of copyright protection and, secondly by a "low protectionist" view that tends to see contents as information, which should be available to the public unless there is some compelling interest to protect the interests of the author. Against this backdrop, trade marks and brands seem relatively immune from such frontal attacks. This was not always so. From the outset of the enactment of statutory protection of trade marks, the question was forcefully raised whether the intellectual property laws should confer an exclusive right for the commercial use of a mark. Such remarks were heard in Parliament at the eve of the enactment of the first English trade mark law in the 19th century and by the US Justice Department in the 1930s and 1940s in the run-up the passage of the Lanham Act in 1946. A much more broadside attack on brands and branding was set out in Naomi Klein's influential 1999 polemic, No Logo, here. The anti-trade mark dogs were not merely barking, they were howling.

Not so, however, today. Perhaps because (i) there is little or no resistance to the notion of trade marks as an exclusive right; |(ii) a changing view of the potentially anti-competitive aspects of trade marks; and (iii) a decline of the influence of the Marxist critique in current intellectual thought, criticism of trade marks has been demonstrably muted. Quite the opposite: trade marks and brands have become the pin-up girl (or guy) of IP rights. This Kat recalls a conversation that he had with a senior person at a public organization dealing with IP. In his view, patents and copyright were ultimately of little value—what really matters is the brand. Or, as the CEO of a leading advertising company stated in a radio interview this week, "the brand is the platform." Wherever this Kat seems to go, trade marks and branding are basking in the glow of fawning admiration, while the trade mark hound of the Baskervilles remains silent.

Certain developments, however, suggest that this current state of affairs may be changing. In particular, this Kat has began to fret about the implications of the current stall speed in the apparent rate of innovation in high tech, and in particular, in coming up with new consumer products. Edward Yardeni, among the most sagacious observers of Wall Street (the person who is reported to have coined the term, "bond market vigilantes", here), and a long-time enthusiast of high tech, has begun to fret about the state of hi tech and innovation. He was heard to say that the industry is more and more becoming commoditized and innovation is grudgingly incremental at best. This view was echoed in a comment that this Kat heard this week in a radio interview, which talked about "gadget fatigue", the intention being that consumers are increasingly less willing to run out and buy the new version of a smartphone, tablet or computer. The common thread in these observations is that products in the vanguard of successful hi-tech branding are facing a future where the brand may be increasingly uncoupled from underlying product advantage.

In such a situation, to the extent that such products can still continue to enjoy any branding (and hence price) advantage, the extra margin attributable to the power of these brands will largely accrue to the benefit of the brand owners in a way that does not necessarily promote the kinds of activities that IP "is supposed to protect." If this occurs, might it might then not lead to an increase in critical commentary on the societal benefit of trade marks and branding. Just as the criticism of patent trolls raises the question of what are the benefits of patents, and the emphasis on copyright as information leads to a low-protectionist view of the proper scope of copyright protection, branding power in an age of hi tech product incrementalism or even stagnation might bring out the long-knives of trade mark critics long-silent. If so, trade marks and brands well may enjoy their "hound of the Baskervilles" moment.