Appropriating Signs and Meaning: The Elusive Economics of Trademark

Abstract

This paper deals with economic analysis of trademark. Its presence in markets is originally connected with the problem of information asymmetries and the need to provide information for assisting exchanges, so as to avert the market failure brought about by adverse selection. However this information-conveying function is also accompanied by a differentiation effect, arising from the power of persuasion that signs can exert on individuals. The exploitation of differentiation has given rise to the practice of branding, which ties markets and consumption to the realms of meaning and experience. Branding is so all-pervasive in today's economy as to have somehow transfigured it, so that the role of persuasion is now pre-eminent. Nonetheless, the mainstream economic theory tends to resist acknowledging this change, which would to a large extent call into question well-established hypotheses and theoretical tools. The general response has therefore been to assume that the informational role of trademark predominates, and to use this hypothesis to construct models, welfare evaluations and policy prescriptions that bear little or no relation to the actual markets. The opposing approach -in the shadow of the Nelson's and Arrow's seminal papers on economics of information -is recognising the idiosyncratic character of information, and therefore drawing conclusions and devising solutions that, while still based upon the welfare criterion, also incorporate a wider awareness and a deeper representation of the scenario under study. The present work attempts to move in this direction, showing how different disciplines can provide some key epistemological tools for enabling economists to effectively evaluate the welfare outcomes of the introduction and progressive alteration of a particular intellectual property right within the realm of signs and meanings.

Why do SMEs file trademarks? Insights from firms in innovative industries

“…Consistent with this rationale, empirical research provides considerable and consistent evidence of a positive relationship between firms' trademarks and investor valuations for both small and large firms. Trademarks increase a firm's attractiveness to investors and reduce the cost of external capital (e.g., Ramello and Silva, 2006;Srinivasan et al, 2008;Block et al, 2014a). Exchange motives also include the licensing of trademarks to other firms (Mendonç a et al, 2004).…”

“…However, to interpret the increase in trademark filings and its economic effects, it is crucial to know and understand why firms file trademarks. Previous research identifies various motives for trademarking, including the protection of marketing assets, brand building, and signaling quality (e.g., Ramello and Silva, 2006;Srinivasan et al, 2008;Sandner and Block, 2011). Nevertheless, an empirical investigation of trademarking motives remains lacking.…”

Trade Marks and Performance in Services and Manufacturing Firms: Evidence of Schumpeterian Competition through Innovation

“…A contrasting view is that, if the costs of supplying pirated products fell with the increase in information, firms may have felt a stronger need for trade mark registration. From their examination of law and economics, Ramello and Silva (2006) stress that trade marks have moved well beyond the realm of signaling ‘source distinctiveness’ to that of offering ‘differential distinctiveness’, leading to a metamorphosis of trade marks into brands.…”

Everywhere? The Geography of Knowledge

“…Finally, another form of intellectual property right, the trademark, has been too little studied and not fully acknowledged by economists (Mendonça, Pereira, and Godinho, 2004;Ramello and Silva, 2006). Apple Inc., for example, has devoted great effort to obtaining trademarks rather than merely patents for its iPod and iPhone.…”