The need and importance of TM are always on the rise and with the advent of social media, the value has skyrocketed. The aim of the trademark from only protecting trade diversion to a competitor has emerged to benefit the consumer from not getting diverted or deceived by other marks in the market. This focus was shifted to the protection of the consumer from getting cheated. The trademark not only implies the identification (origin) of the good but also identifies the quality of the goods associated with the trademark. Undoubtedly, the negative externalities of the goods associated with the trademark can affect not only the brand but also the consumer base. Trademarks are assets of a business. They generally are considered intangible assets, and for accounting, a trademark is even capitalized, thereby recording it in the books of accounts as an asset through a journal entry.

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The increasing volume of trade has made the market in a more informational manner for the effective purpose of constituting transparency in it. TM has always been a way ahead in constituting such transparency by building a relationship between the trademark, source, goods, and quality. The basic prerequisite can be met by the trademark once it proves that the mark signifies a constant source of the goods with the guarantee of the constant quality of the goods. But more often, the negative externalities with the goods is not often being represented by the TM, thereby affecting the public from getting the clear picture associated with the mark. While another form of TM, being certification mark and collective mark, does provide us a guarantee for the quality of the goods, nevertheless, still the negative externalities remain unmet. It is imperative to understand that a recalibrated law of traditional trademarks would be well-positioned to help achieve this transparency.

Consumers are well aware of the products that they purchase. How can we create effective accountability for a Trademark in a manner through which both good and negative externalities could be well ascertained of? The public at large must be informed regarding the underlying goodwill of the company. This can be described through an effective process of ranking and explaining the negative externalities attached with the goodwill. This way the consumer in itself will be able to conveniently compare the products and can make an effective decision, thereby making informed purchasing. This way, accountability can be ascertained for the TM. Various other factors like environment suitability and labor issues could be accounted for while ascertaining the accountability. This will have a large scale impact on the functioning of the marks’ holder; the quality remains the top priority.

The trademark holder has the freedom and the right to control the quality of the goods. This freedom should not be used by the holder in such a manner to deceive the public at large. If a TM holder of a food beverages company started giving adulterated products, such accountability can be of little help for the public and also putting an effective sanction on the companies accordingly. The main issue pertains to the limit of what TM is; should be extended. TM always concerns itself with the question of whether or not the mark can be registered or whether it is deceptive or similar to confuse the minds of the consumer. But it never seems to concerns itself about the functions of the TM holder that whether he behaves immorally, deceitfully, or scandalously. An effective trademark law that takes into consideration the accountability associated with the TM can be a game-changer in the market.  

Originally retrieved from- https://www.ipandlegalfilings.com/making-trademark-accountable/

Author: Saransh Chaturvedi (Advocate, LLM (IIT Kharagpur) – an associate at  Global Patent Filing. in case of any queries please write back us via email at support@globalpatentfiling.com.