Intellectual Property Rights As Legal Monopolies

Intellectual property rights as legal monopolies

Intellectual property rights (IPR) comprise Trade Marks, Copyrights, Patents and design protection, and are quite poorly covered in A-level economics textbooks. This is surprising as they comprise a powerful and enduring source of monopoly power which can be related effectively to monopoly analysis. This short extract seeks to develop the concept of Trade Marks within IPR.

Students of A-level economics frequently conflate Trade Marks and Copyrights. Trade Marks are defined with the Trade Marks Act 1994[1] as any mark or symbol that is capable of being presented graphically. Any Trade Marks in the EU must meet the strict Sieckmann Criteria[2] which means they must be clear, precise, self-contained, easily accessible, intelligible, durable and objective. The self-contained aspect limits the use to a range of goods or services and the objective aspect has meant that trade-marking of smells becomes nigh impossible.[3] Harrods department store attempted to trade mark a green/gold combination across a wide range of goods[4] but failed because of a lack of both significance and distinctiveness.

In basic terms Trade Marks represent the combined visual impact of a font and colour within a restricted range of a good or service best and most easily thought of as a brand. Copyright, however, covers original, literary, dramatic, musical or artistic works. [5] The main reason Trade Marks in particular are so desirable is that they can be renewed in perpetuity (unlike Patents which expire after 20 years). Recent high profile cases include Nestl s failure to trade mark the 4-fingure chocolate bar (a similar item has been manufactured in Norway since 1906[6]) and Cadbury s failure to trade mark the purple (Pantone 2865c) for its Dairy Milk ranges.[7]

The KitKat and Cadbury cases highlight two interesting points. The first is that the item for which a Trade Mark is being sought must be so distinctive in the eyes of the consumer (Toblerone s triangle also passes this criterion[8]) such that only that product and brand is associated with it. The second is the desire to Trade Mark colour which is a highly contentious arena of IPR namely as it not only precludes competitors from using that colour for any similar good or service, but creates a barrier to competitors not even to use proximate colours for fear of infringing the Trade Mark under the guise of passing off.[9] Large MNCs have well-resourced legal departments and are likely to pursue alleged transgressors! Despite the difficulties however some colours do have protection[10], but EU and USA juridical interpretations differ. Christian Louboutin, for example, managed to secure a trade mark for the red sole shoe contrasting with a black upper in the USA but this was deemed insufficiently distinctive in the EU so was not granted a Trade Mark.[11] The point to note is the extent to which corporations seek to establish a legal monopoly through the use of Trade Marks to preserve their rent-seeking capacity.

To be continued /

[1] Section 1(1)

[2] Full details at www.worltrademarkreview.com

[3] Though some have tried: the smell of freshly-cut grass and the smell of newly-opened tennis balls, for example.

[4] Application #2209049

[5] Copyright, Designs and Patents Act 1988 Section 1(1a)

[6] See BBC online report Nestle fail to trademark four-fingered KitKat shape 17 May 2017

[7] See BBC online report Cadbury loses legal fight over use of colour purple 4 October 2013

[8] However, presently (August 2017) being contested by Poundland for a lack of distinctiveness (as it markets its own triangular Twin Peaks chocolate bar).

[9] Illustrative cases in which companies have marketed products too closely to registeredTrade Marks are at www.worltrademarkreview.com United Kingdom: perils and powers of passing off

[10] Tiffany for robin s egg blue for its bag range and UPS for Pullman brown for delivery vehicles, for example (UPS has also Trade Marked a wide range of proprietary word combinations associated with its service).

[11] Interestingly the judgement was silent on the tone of red. Other fashion producers still contest the trade mark, see at