[rayiner]

While domains are unique, how does it help Prada, Tiffany's, etc? It makes no difference whether the copy-cats are selling rip-offs marked "tiffanys.com" out of a cart. There is also more to trademark that just protecting marks. Trademark protects many aspects of the brand (see: trade dress, dilution, tarnishment, etc).

Companies spend a lot of money advertising because brands are valuable, and trademark basically protects brands. Branding makes goods less fungible, and is really the only reason companies like Prada or Ralph Lauren can sustain such high margins in what would otherwise be total commodity markets. When brands cease to have meaning to consumers, you end up with what you see in the PC industry: a race to the bottom that eats up all your margins.

Why does advertising support so much of the internet? It's a $500 billion industry world-wide, that's why. Without branding, protected by trademark, I think it would be a fraction of the size. And I don't think it would necessarily be a bad thing.

[chongli]

I have a question from another angle: would society be better or worse if Prada/Tiffany's/Rolex etc. could no longer block copy-cat products? The way I see it, trademark law is being used to promote social stratification by inflating the prices of luxury goods. Artificially inflating prices via government monopoly is inherently anti-capitalist and anti-consumer.

[htf]

Yeah, I understand the value of a brand. I was thinking that, without trademark, there could still be ways to ascertain the authenticity of a product. For example, tiffanys.com could list their physical stores on their website. A fake store wouldn't fool the neighborhood for long enough to be worth the effort.

[rayiner]

Ever go to a mall and see all those little carts selling things? You think people go online to verify whether those carts are selling the real deal? What about products purchased online through Amazon, Zappo, etc?

Also, there is a whole world of non point of sale branding. When you give a gift, you pony up for a real Kate Spade bag instead of a perfect knock-off (which are probably made in the same Chinese factory!) You might get those awful D&G glasses with the obvious branding instead of a perfect replica. A lot of the value of branding is rooted in the fact that humans are basically monkeys and we buy products to show the brands off in our social circles. A lot of people would knowingly buy knock-off D&G glasses if they could get the same effect for less money.

Now, I'm not arguing that this would be a bad thing. It'd save parents a lot of money if their kids could show off their "Nike Swoosh" shoes without paying a huge markup for something made in a Chinese sweatshop. But the fact that we can't do that is certainly quite valuable to Nike (and D&G, and Ralph Lauren, etc), and the inability to protect their brands in that way would certainly reduce their incentive to invest so heavily in them through advertising.

[htf]

You're right. For many branded products (especially clothes and shoes), consumers would indeed prefer to buy cheaper replicas good enough to fool their social circle. If they had the freedom to do so, then yes, Nike would lose much of their incentive to invest in advertising their logo. And yes, that would probably be a good thing for parents. And the only advertisements remaining would advertise quality instead of exclusivity. Or maybe Nike would come up with a way for someone to authenticate someone else's shoes. I don't see how they could do that though.