Enforcement Costs and Trademark Puzzles

The standard account holds that trademark law, at its core, aims to protect consumers from deceptive and confusing uses of source-identifying marks. However, there is a problem with the standard account. It cannot explain a number of important trademark doctrines, many of which, like the protection accorded trade dress, have expanded the scope of trademark rights in recent years. Some critics argue that these puzzling doctrines reflect a radical shift away from the standard account and toward a new property theory of trademark law that focuses not so much on the quality of information available to consumers as on the seller’s ability to appropriate the full commercial value of its mark. 

This Article offers a different, and less alarming, explanation for many of the puzzling doctrines, one that does not require a radical departure from the standard account. This alternative explanation focuses on the enforcement costs of implementing law based on the standard account. Enforcement costs include the administrative costs of adjudicating trademark lawsuits and the error costs of over- and under-enforcing trademark rights. For a number of reasons, trademark law generates high enforcement costs, and many of the puzzling features of trademark doctrine can be understood as legal tools to manage these high costs. In particular, courts adopt general rules or standards that protect trademarks more broadly than the standard account’s substantive policies support, but those rules and standards can be justified by the administrative and error costs they save. In the end, the Article uses the enforcement cost approach to suggest two reforms to trademark law—the broader acceptance of disclaimers especially in merchandising rights cases, and the abolition of trade dress protection.

Virtual Liberty: Freedom to Design and Freedom to Play in Virtual Worlds

Regulation of virtual worlds has become an important issue in cyberspace law as more and more people spend increasing amounts of their lives in these spaces. This Article discusses the basic questions of freedom and regulation in virtual environments. 

There are three kinds of freedom in virtual worlds. The first is the freedom of the players to participate in the virtual world through their in-game representations, or avatars. This is the freedom to play. The second is the freedom of the game designer to plan, construct, and maintain the virtual world. This is the freedom to design. A third is the collective right of the designers and players to build and enhance the game space together. This is the freedom to design together. 

These rights overlap in important respects with the constitutional rights of freedom of speech, expression and association. Virtually all activity in virtual worlds must begin as some form of expression, and therefore virtually all forms of legally redressable injury in virtual worlds will be some form of communications tort. However, the law of the First Amendment, as it currently exists, does not adequately protect many important features of the rights to design and play. 

Many virtual spaces are rapidly becoming sites of real world and virtual world commerce. In the future game designers will likely attempt to invoke the First Amendment to avoid regulation of their business practices. However, game designers will lose First Amendment protection to the extent that they encourage real-world commodification of virtual items. The Article concludes by discussing different models of regulation of virtual worlds, including the model of consumer protection, the virtual world as company town, and virtual worlds as places of public accommodation.

A Law and Norms Critique of the Constitutional Law of Defamation

This Note applies some implications of recent law and norms literature, unexplored in existent academic writing, to the constitutional law of defamation. Theories of norms conceptualize social perceptions as constraints upon selfish individual behavior. Community members experience costs when they are observed violating social norms. These costs increase the likelihood of individual conformity to a norm. When the norm corresponds to cooperation in the face of collective action problems, social judgment benefits the community by making such cooperation more likely. The maintenance of high levels of norm adherence within a community depends on the public circulation of true information regarding members’ norm adherence. False information alleging norm violation, or false negative gossip, imposes a negative externality by decreasing the expected costs of norm violation. Law and norms, therefore, suggests that dissemination of false negative gossip should be harshly punished to minimize its associated negative externality. The actual U.S. law of defamation, surprisingly, has moved in the opposite direction—relaxing the common law’s harsh punishment for dissemination of false negative speech. While this shift rests upon a defensible understanding of the incentives to engage in political speech, the Supreme Court opinions overturning the common law of defamation seriously underestimate the costs of false negative gossip. As a result, negligence liability was quite likely a better replacement for strict liability common law defamation than the recklessness rule actually adopted. Worse still, the common law of defamation may have been socially optimal, making it entirely right and any Court-imposed changes entirely wrong.