On the one hand, a trademark owner has a duty to exercise quality control over a licensed product manufactured by a third party.  On the other hand, some courts will apportion product liability to the trademark owner relative to its role in the manufacture, design and distribution of the licensed product (which could encourage the trademark owner to have as little to do with the product as possible).  However one of the points of licencing is to convince the customer that the trademark owner stands behind the licensee (franchising comes to mind). 

There is an intellectual tradition of antipathy towards licensing in part because (I am over-simplifying a complex argument) it deceives the consumer.  A consumer who bought a product relying on the quality of the licensed mark, and then, after the product explodes, finds that he/she had little or no remedy against the trademark owner (but perhaps a judgement-proof overseas manufacturer) may well find themselves in agreement with Lord Diplock that licensing is little more than trafficking in trademarks.

A recent Indiana Supreme Court decision discusses the tension between the Lanham Act and product liability.  It’s a ripe topic for student notes. (thanks to John W for running the actual decision down).

Kennedy v. Guess, Inc., 29502-0211-CV-594 (Indiana  April 21, 2004).

From Google’s SEC Filing:

We also face risks associated with our trademarks. For example, there is a risk that the word “Google” could become so commonly used that it becomes synonymous with the word “search.” If this happens, we could lose protection for this trademark, which could result in other people using the word “Google” to refer to their own products, thus diminishing our brand.

Political rival charges Congressman DeLay of accepting $20,000 from Bacardi in exchange for influencing legilsation that aided Bacardi in its trademark fight regarding the HAVANA CLUB mark.  Via Houston Chronicle.

A previous instance of allegations that Bacardi contributed to politicians (in that case, $50,000 to Jeb Bush) to affect trademark matters, here.

NY Times article on particulars of how Google GMail will work.  Of special interest re: trademarks:

Interestingly, Google has decided to allow e-mail messages sent by businesses promoting their services to contain ads from competing companies.

Last week, an e-mail message sent by Citibank to one customer, for example, arrived on Gmail with ads from Citibank and two financial services groups: National InterBank and Lots-of-Credit-Cards.com.

This kind of rival advertising has been a contentious issue on Google’s Web search service. American Blind and Wallpaper Factory, for example, has sued Google demanding that it not show ads from other blinds sellers when people search for its name. Ms. Wojcicki said that Google believes that presenting ads from a range of companies is a service to its users.

Update:  I’ve spoken to some colleagues about this.  One reaction – some direct marketers’ response will likely be to purge their lists of GMail addresses precisely because of this.

I’m hesitant to comment on something I’ve never seen (I’m going to sign up today) – so consider the following to be speculation unfettered by empirical knowledge.  When I receive my credit card statement from XYZ, and the envelope contains various ad inserts, I don’t necessarily assume that the advertisers are owned by XYZ but I do assume that XYZ approved the placement of those inserts in some way (and if the advertiser turned out to be fly-by-night, it would, at a minimum, refect poorly on XYZ).  If the advertised goods or services were identical to those provided by XYZ (for example, credit card services), that fact would strengthen my belief that there was a relationship.  After all, it’s hard enough to get your customer’s undivided attention. I assume that GMail will disclose to its users that the advertisers are unrelated to and unsponsored by the sender of the email.  Will that disclosure be powerful enough to offset the common belief that companies tend not to provide advertising opportunities to their competitors?