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Rebecca Tushnet, Trademark theory in an antitrust case: FTC v. 1-800 Contacts, in Research Handbook on the Law and Economics of Trademark Law 194 (Glynn S. Lunney, Jr. ed., 2023).


Abstract: Both antitrust and trademark law are, broadly speaking, “unfair competition” regimes. But the power that the law confers on trademark owners has expanded even as the constraints imposed by antitrust have contracted. In recent years, disputes over the use of trademarks as “keywords” used by search engines and their advertisers to target advertising when a consumer searches online have raised both trademark and antitrust issues. While U.S. trademark law generally considers keyword advertising to be pro-competitive and nonconfusing, a significant court of appeals case held that attempts to suppress such advertising did not violate the antitrust laws. Despite this unfortunate result, disputes over keyword advertising can still teach us important lessons about trademark theory, particularly the economic theory that trademark rights are justified to lower consumers’ search costs.