Are We Running out of Trademarks? an Empirical Study of Trademark Depletion and Congestion

American trademark law has long operated on the assumption that there exists an inexhaustible supply of unclaimed trademarks that are at least as competitively effective as those already claimed. This core empirical assumption underpins nearly every aspect of trademark law and policy. This Article presents empirical evidence showing that this conventional wisdom is wrong. The supply of competitively effective trademarks is, in fact, exhaustible and has already reached severe levels of what we term trademark depletion and trademark congestion. We systematically study all 7 million trademark applications filed at the U.S. Patent and Trademark Office (PTO) from 1985 through 2016 or already registered at the PTO as of 1985. We analyze these data in light of the most frequently used words and syllables in American English, the most frequently occurring surnames in the U.S., and an original dataset consisting of phonetic representations of each word mark filed at the PTO from 1982 through 2015. We further incorporate data consisting of all 128 million domain names registered in the .com top-level domain and an original dataset of all 2.1 million trademark office actions issued by the PTO from 2003 through 2016. These data show that rates of word mark depletion and congestion are increasing and have reached chronic levels, particularly in certain important economic sectors. The data further show that new trademark applicants are increasingly being forced to resort to second-best, less competitively effective marks. Yet registration refusal rates continue to rise. The result is that the ecology of the trademark system is breaking down, with mounting barriers to entry, increasing consumer search costs, and an eroding public domain. In light of our empirical findings, we propose a mix of reforms to trademark law that will help to preserve the proper functioning of the trademark system and further its core purposes of promoting competition and enhancing consumer welfare. * John M. Desmarais Professor of Intellectual Property Law, New York University School of Law. † Professor of Law, New York University School of Law. The authors thank David Abrams, Allen Adamson, Arnaud Ajdler, Richard Arnold, Stefan Bechtold, Jose Bellido, Joshua Blank, Ryan Bubb, Christopher Buccafusco, Colleen Chien, Adam Cox, Kevin Davis, Ben Depoorter, Deven Desai, Shari Seidman Diamond, Peter DiCola, Graeme Dinwoodie, Rochelle Dreyfuss, Rebecca Eisenberg, Eric Feder, Joshua Fischman, David Franklyn, Deborah Gerhardt, Robert Gomulkiewicz, Scott Hemphill, Julia Hirschberg, Jeffrey Lefstin, Mark Lemley, Daryl Levinson, Paul Levy, Jake Linford, Kate Litvak, Glynn Lunney, William McGeveran, Kathleen McKeown, Willajeanne McLean, Florencia Marotta-Wurgler, Mark McKenna, Donna Mirman, Signe Naeve, Neil Netanel, Sean O’Connor, Laura Pedraza-Farina, Dragomir Radev, Lisa Ramsey, Richard Revesz, Betsy Rosenblatt, Zahr Said, Adam Samaha, Bhaven Sampat, David Schwartz, Jeremy Sheff, Peter Siegelman, Christopher Sprigman, Richard Sproat, Joel Steckel, Martyn Tipping, Rebecca Tushnet, Jeremy Waldron, Steven Wilf, Felix Wu, and Katrina Wyman, and participants in colloquia at the Cardozo School of Law, Hanken School of Economics, New York University School of Law, Northwestern Pritzker School of Law, Oxford University, St. John’s University School of Law, UC Hastings College of the Law, UCLA School of Law, University of Connecticut School of Law, University of Sheffield School of Law, University of Washington School of Law, the 2017 Munich Summer Institute, the 2016 Workshop of the International Society for the History and Theory of Intellectual Property, the 2016 Conference of the Society for Institutional & Organizational Economics, the 2015 Works in Progress in Intellectual Property Colloquium, and the 15th Annual Intellectual Property Scholars Conference for their exhaustive comments. Thanks also to Jordan Joachim, Ryan Lawson, Caitlin Millat, Doran Satanove, and Kayla Wieche for excellent research assistance. The authors gratefully acknowledge support from the Filomen D’Agostino and Max E. Greenberg Research Fund. OCTOBER 23rd