The Economics of Offensive Trademarks

My fellow blogger William Shughart recently gave a good critique of the Patent and Trademark Office’s decision to rescind protection of the Washington Redskins’ name. I agree with him that whether some people view a trademark as offensive should not be a criterion for determining whether it should be protected.

If a large number of people are offended by a trademark, then it will be a liability rather than an asset to whomever uses it, and economic forces will limit its use. People of a certain vintage will recall Sambo’s Restaurants, which were forced into a name change (and perhaps bankruptcy) because people were offended by the name.

The purpose of a trademark is to identify a firm’s products. If people like the firm and its products, the trademark will attract customers. If people are offended by the firm and its products, the trademark will alert customers to avoid that firm. The market system works to weed out offensive trademarks, and the U.S. government should not be in the business of determining whether trademarks are offensive.

Ironically, if Redskins really is an offensive term, then denying the team trademark protection will allow others to use the term, and the offensive term could see even more widespread use.

But while I’m discussing the subject, I will admit to being a bit sensitive to the issue myself, because my own heritage is being demeaned by being used as a team mascot by a different team.

I’ve lived in the South most of my life, and am proud to be on the faculty at Florida State University (home of the Seminoles), but (and I rarely share this bit of my background with others), I was born in the North, in Bridgeport, Connecticut. Yes, I am a Yankee. I didn’t have any say in the matter; I was born a Yankee. But I admit to being sensitive to this part of my background, and find it demeaning to have a sports team mocking my heritage.

If the Redskins lose their trademark protection, the Yankees should too.

Randall G. Holcombe is a Senior Fellow at the Independent Institute, the DeVoe Moore Professor of Economics at Florida State University, and author of the Independent Institute book Liberty in Peril: Democracy and Power in American History.
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