The economics of counterfeit goods

Economics Economics Questions
21

I think Kinsella mentioned that this sort of thing could only count as fraud, since trademarks are positive rights. No fraud, no tort.

22

I think Kinsella mentioned that this sort of thing could only count as fraud, since trademarks are positive rights. No fraud, no tort.

I’m confused. Kinsella said that counterfeit goods could count as fraud? Then whay did you say, “No fraud, no tort”? Did you mean that since trademarks are positive rights, this sort of thing could not count as fraud?

I found this quote from Kinsella, which perhaps clarifies things:

"Consider IP. Under a free market there would be no patent law at all. The existence of patent law therefore causes much waste and distortion and redistribution that would not otherwise occur. The same is true of copyright.

However, trademark would exist in some form–there would be at the least a fraud claim on the part of customers that a seller defrauded by selling them bootleg goods. So there would be differences–the cause of action would be that of the customer, not the trademark holder; there would be no ridiculous state extensions of TM law such as antidilution rights–but a seller of fake goods would have legal consequences under a free market, similar to those he faces now. So, we can see that state trademark law, while not good, is probably not as harmful and distorting as patent and copyright law are."

23

And here are Kinsella’s suggestions for improving trademark law:

  • Raise the bar for proving “consumer confusion”
  • Abolish “antidilution” protection
  • In fact, abolish the entire federal trademark law, as it is unconstitutional (the Constitution authorizes Congress to enact copyright and patent laws, but not trademark law)
24

Thanks good research Leo

Mickachussets: current law is not approved by libertarian thinkers, but here is some of the crazy consequences.

If the New York Yankees do not vigorously defend their name against all encroachment, then a future person can come and claim that name as his own and force the Yankees to pay him royalties.

The argument in court would be that there really wasn’t a trademark and the yankees are just discriminating against me the new claimant because here are 15 examples of where they allowed outsiders to use their name without suing them.

(This is also the reason why the Mises institute tries to copyright protect their writings, even though they choose the most lenient form of copyright)