Introduction

Brands and brand management have become a central feature of the modern economy and a staple of business theory and business practice. Coca-Cola, Nike, Google, Disney, Apple, Microsoft, BMW, Marlboro, IBM, Kellogg's, Gucci, and Virgin are all large companies. They are also brands that present powerful and valuable tools for business. Business is fully aware of that power and value. Contrary to the law's conception of trademarks, brands are used to indicate far more than source and/or quality. Indeed, those functions are far down on the list of what most businesses want for their brands. Brands allow businesses to reach consumers directly with messages regarding emotion, identity, and self-worth, such that consumers are no longer buying a product but buying a brand. Businesses pursue this strategy to move beyond price, product, place, and position and create the idea that a consumer should buy a branded good or service at a higher price than the consumer might otherwise pay. Branding explicitly contemplates reducing or eliminating price competition, as the brand personality cannot be duplicated. In addition, this practice can be understood as a product differentiation tactic that allows a branded good to turn a commodity into a special category that sees higher margins compared to the others in that market space. In sum, brands have important effects on competition and the marketplace.

Price theory animates both trademark and antitrust doctrine; yet businesses and business literature explicitly acknowledge that brands are used to compete on dimensions other than price. From a business point of view, brands are levers that permit companies to differentiate their products and services, price discriminate, and increase customer loyalty. Price theory no longer explains well what brands (if any) consumers view as substitutes, when confusion does or does not arise in the marketplace, and how consumers choose between brands and between dealers in the same brands. Antitrust doctrine's emphasis on neo-classical price theory interferes with the doctrine's ability to understand and respond to the rise of the brand as a tool for possible anti-competitive behaviors such as diminishing the role of price competition, segmenting market demand, facilitating price discrimination, and locking in consumers to a favored brand.