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Abstract
Excerpted From: Deborah R. Gerhardt, The Last Breakfast with Aunt Jemima and its Impact on Trademark Theory, 45 Columbia Journal of Law & the Arts 231 (Winter, 2022) (161 Footnotes) (Full Document)
You know a theory is in trouble when it holds less descriptive force than a five-minute Saturday Night Live skit. That is where the law and economics theory of trademark law sat in November 2020, when Alec Baldwin called “Aunt Jemima” and “Uncle Ben” into a conference room and fired them. When Maya Rudolph (playing Aunt Jemima) asked, “What did I do?” Baldwin's character responded, “It's not what you did, it's how you make us feel about what we did.” This skit marked an unprecedented chapter in American advertising history and a need to rethink trademark theory.
According to traditional law and economics thinking, trademarks are information shorthand, helping us find what we need efficiently. If a symbol tells consumers that a product comes from a distinctive source, the source will be incentivized to create quality products. When a symbol functions as a mark, consumers may know what to look for to find the same quality product they purchased in the past. The theory mirrors the basic requirement for trademark protection under federal law. Before a symbol can be protected as a trademark, the Lanham Act requires the symbol to signal that any product or service used with the symbol comes from a single distinct source. To economists, the spillover benefits of incentivizing quality and providing information efficiencies to consumers justify legal protection of the symbol.
Although the law and economics theory sets a floor for what a symbol must do to earn trademark protection, it does not explain why some brands succeed while others fail. It also cannot account for the abandonment of so many famous and lucrative marks. This unprecedented moment in branding history calls for a rethinking of trademark theory.
This Article proposes a paradigm shift away from law and economics and towards the consumer investment theory, informed by research from behavioral economics, marketing, and psychology. The consumer investment theory is an important tool for understanding modern trademarks because it accounts for expressive and value-driven decisions made by third parties, in addition to brand owners, thereby creating a feedback loop that influences brand strategy. The consumer investment model embraces the idea that voices outside brand management influence trademark meaning. Although we may or may not make purchases, we all invest brands with meaning. The consumer investment model reflects this dynamic by defining consumer investment as the contributions everyone, in addition to the trademark owner, contributes to brand meaning and value. Since the theory was first proposed in 2010, the rise of consumer brand communities on social media have increased the force of its descriptive power. Although law and economics remains an entrenched theoretical approach, a leading treatise and numerous articles cite the consumer investment theory, validating the growing trend of recognizing its utility. Strategic decisions to drop brands with embedded racial stereotypes during periods of wider social change have confirmed that it has become a necessary tool for understanding the dynamic course of trademark development, use, success, and public impact.
The Article proceeds as follows. Part I enumerates the deficiencies in applying traditional law and economics theory to trademark law and practice. Part II identifies multiple iconic brands that incorporated racial imagery and situates their adoption and development into historical context. The discussion focuses on the history of the Aunt Jemima mark to illustrate how cultural influences the building, revising, and abandoning of a brand created to animate a particular racial stereotype. After revealing how the depicted communities have viewed racially explicit branding, this Part explains why legal challenges failed to bring down many economically successful but racially disparaging marks. Next, it shows how culture shifted towards a tipping point that led brand owners to simultaneously abandon many racially explicit marks. Part III explains how this unprecedented moment in advertising history reaffirms that the consumer investment model is a theory well equipped for explaining how trademarks function, and what qualities make them resilient enough to succeed in a constantly changing cultural environment. Instead of a tight two-way connection between seller and buyer, trademarks are better thought of as symbolic centers of brand communities. By accounting for broader and more open expressive patterns, and for the significance of brands as symbols of authentic values, the consumer investment theory explains the dropping of racist imagery in a way that traditional law and economics theory cannot.
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The traditional law and economics approach does not adequately explain how changing cultural norms led multiple owners to drop lucrative trademarks. Over the spring and summer of 2020, as city streets erupted in protest after George Floyd's murder, trademark owners began abandoning racist words and imagery, even though they were still quite successful as source identifiers.
Social justice culture and contemporary interactive brand strategies have upended the law and economics theory of trademarks as mere tools of information efficiency. While the law and economics theory of marks sets a floor for what symbols must do to function as a trademark, it fails to explain why some brands resonate enough to succeed while others fail, and why an owner might abandon a mark even if it has been financially successful for decades. The key to understanding this phenomenon lies outside the law and economics model.
The consumer investment model brings this value-based thinking into trademark law and encourages us to look around at the brands with which we choose (consciously or not) to surround and define ourselves. The choice to end the use of economically successful iconic marks confirms how brands reflect and shape our values. Professor James Boyd White encouraged us to reflect on how law functions as a value-laden persuasive rhetoric. He described the work of lawyers as a creative process of persuasion analogous to advertising. Like laws, trademarks reflect value judgments, and through their words and imagery, they can unite like-minded citizens around core beliefs.
The consumer investment theory of trademarks embraces the idea that a brand is a symbol filled with meaning created by many contributors, including but not limited to the brand owners. The model encourages critical thinking about whether consumers associate a brand with specific values, and if so, how those values influence the brand's success and inspire the foundation of brand communities. By accounting for brand meaning and values, the consumer investment theory explains the dropping of racist imagery in a way that traditional law and economics cannot. It accounts for the fact that a company may choose to drop a mark that has been a reliable and economically successful source identifier for decades if it is concerned that consumers will be offended by its brand, embarrassed to wear the brand on a t-shirt or be seen with it in their grocery cart. In a space where authenticity and trust are critical currency, espousing values without living up to them can devastate brand integrity. If brand owners are to remain relevant to their consumers steeped in contemporary culture, they must be open to change as culture and values evolve. In moments of political and cultural upheaval, a brand owner must be prepared to respond, even if an act of creative destruction is the only solution to unconflicted consumer investment.
Deborah R. Gerhardt is the Reef C. Ivey II Excellence Fund Term Professor of Law at the University of North Carolina School of Law.
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