Empirical Investigation of Sport Trademark Dilution Using Contingent Valuation Method

Abstract

Under the federal trademark law, owners of famous sport trademarks may bring legal claims against unauthorized users of their marks under the infringement and dilution theory. Although the rationale of trademark infringement has been supported by various notions of consumer psychology and law and economics, the theory of dilution has been criticized for the lack of empirical support. This study investigated whether the junior use of major sport trademarks would have dilutive effects on the senior marks in financial terms. The study employed the contingent valuation method, a technique designed to estimate the economic values of nonpecuniary assets such as trademarks. A total of 140 subjects were exposed to dilutive information while they purchased sport brand merchandise. A series of pre- and posttests revealed that moderately famous sport trademarks suffered dilutive harm from junior use, whereas exceptionally famous marks were immune to the dilutive effects. Theoretical and practical implications were discussed.