9 - Trademark Functions in European Union Law

Summary

Before embarking on a discussion of trademark functions, it is appropriate to briefly explore the meaning of “functions” in Intellectual Property (IP) law. Generally speaking, each IP right has an essential function defined by the basic task assigned to it. Thus, patents and copyright incentivize innovation and the creation of new works; trademarks indicate commercial origin. Second, IP rights (IPRs) typically fulfill economic functions that are more varied than the essential ones. Thus, for instance, patents can have the economic function to maximize leveraging power on particular markets, or to attract venture capital. Third, the legal or legally protected functions are determined by the elements of an IP right that a particular legislature has chosen to protect. While the essential functions usually determine the core of the legal protection granted, they do not necessarily confine the scope of the rights conferred. That is, the legal or legally protected functions may go beyond the essential functions, for reasons of policy or convenience. The economic functions typically operate as a catalyst in that process: where a discrepancy is observed between the economic functions and the written law, the legislature or the courts may be motivated to better align the latter with market reality. Of course, that scheme can also be reversed: where the operation of IPRs on the market yields undesirable or detrimental economic effects, legislative steps or judicial practice may be called for in order to bring the legal functions back to basics.