Edited by Graeme B. Dinwoodie
Chapter 5: Trade marks and quality assurance
This chapter will examine the economic role of trade marks in providing quality assurance and aim to show how their capacity to do this has enabled firms and other undertakings to engage in marketing and has influenced the organisation of the production and distribution of goods and services. The chapter reflects my wider interest in how the law contributes to the organisation of economic activity as well as my interest in the economic impact of trade mark law. The starting point for this chapter is the argument that the law does and should protect trade marks because they promote market competition. In particular, trade marks enable firms to convey information about the quality of their products and to provide quality assurance. They therefore increase the incentive that firms have to maintain or improve product quality and promote competition based on product quality. The Court of Justice of the European Union (or “CJEU”) has endorsed this economic rationale for protecting trade marks, portraying them as “an essential element” of a “system of undistorted competition”. This chapter will examine some of the assumptions underlying this economic rationale of the trade mark system, focusing in particular on the economic and institutional nature of a trade mark’s provision of quality assurance as a source of competitive advantage and a valuable marketing resource in its own right.
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