Trademark Monopolies

Since 1742, when Lord Hardwicke seemingly equated trademark protection with monopoly in one of the first trademark cases, until the mid-1950s, concerns that trademarks represented a form of illegitimate monopoly effectively constrained the growth of trademark protection. In the twentieth century, Edward Chamberlin became the leading proponent of the trademark as monopoly view with the publication of his work, The Theory of Monopolistic Competition, in 1933. In his work, Chamberlin argued that a trademark enabled its owner to differentiate her products and then to exclude others from using the differentiating feature. By doing so, trademark protection can effectively cede control over distinct product markets to individual producers and thereby generate for trademark owners the downward sloping demand curve of a monopolist, with its associated monopoly rents and deadweight losses. Although Chamberlin himself recognized the need for product differentiation and rejected the supposed ideal of the perfect competition model, his work became a common rallying point for the trademark as monopoly argument. During the legislative debates leading to the Trademark Act of 1946, his work served as a basis for the Justice Department\u27s opposition to broad trademark protection