Will that brand extension hit legal headwinds? The natural expansion of a trademark

摘要

Entering a new product category or new geographic area may mean adding one or more new competitors with names similar to that of the now-extended brand names those competitors have trademarked or can claim by common law as first users. A company extending its brand therefore may be unable to use its own trademark legally unless it can show the brand extension as a natural expansion. Most such lawsuits settle, but this study uses legal research methods to examine 12 that went to trial. Results show a brand extender most often prevailing in court if and only if (1) its extension into a new product category is seen as similar to its current offerings or (2) its geographic expansion is seen as simply moving into an area in which it already has market presence. By contrast, a firm may lose out to a company already using a similar name for a diverse set of reasons: products differing from their current offerings, differing trademarks, weak marks, or if buyers seem unlikely to encounter both users of the name in question. But no bright line divides winners from losers. (c) 2021 Kelley School of Business, Indiana University. Published by Elsevier Inc. All rights reserved.