Safe Harbors and trademark reforms boost the platform economy – modernization mitigates uncertainty

[Sonia K, Leah Chan, 2018, Scholarly Commons @ UNLV Boyd Law, “Platform Law and the Brand Enterprise”, https://scholars.law.unlv.edu/cgi/viewcontent.cgi?params=/context/facpub/article/2394/&path_info=Platform_Law_and_the_Brand_Enterprise.pdf, accessed 7/10/2024, LR]

The benefits of a platform economy are manifold. The trend toward modularity (which Yochai Benkler describes as "granularity") transforms ordinary exchanges into opportunities for market-based capitalism, reducing barriers to entry, increasing dynamism and precision in pricing and services.14 Platforms can reduce overall prices for consumers because of the lowered transaction and overhead costs they are associated with by connecting consumers with producers more directly and in real-time.' 5 They enable entities to take advantage of underutilized assets, like space, and provide access to services that may have previously been unavailable.1 6 They can improve the consumer experience by offering new services that others have failed to offer.' 7 Finally, they can utilize systems to track ratings and reputation, thereby ensuring trust between the consumer and the service provider. 8 Collectively, platforms also underscore a significant shift from theories of ownership and property; the "consumption culture" that we inhabit becomes replaced with a focus on access instead.' 9 "Owning a car," Lobel writes, "is not as important as the ability to use one when needed." 2 0

Yet these new economies usher in complex questions of both definition and regulation. Within this spectrum of views, some have expressed fear that the platform economy facilitates the avoidance of welfare-enhancing laws like long-term employment contracts, insurance, and quality control regulations. 2 1 As Lobel argues,

Proponents romantically envision the platform as a return to the days free from corporate dominance, when interactions happened directly and intimately between individuals, when design was bottom-up and relationships were based on community rather than markets. For opponents, it is a dystopian uber-capitalist development in which every interaction becomes the basis of market exchanges, privacy and leisure are lost, and Silicon Valley style-libertarians become richer at the expense of everyone else.22

Central to these questions remains the ubiquity of the brand enterprise, which affects nearly every layer of platform architecture. Trademarks are central to the success of the platform economy, but few commentators have really delved into the question of how trademark law both governs and is governed by - the emergence of these new economies. Thus, this Article lays out a spectrum of trademark interactivity, identifying the emergence of two central forms of platform entrepreneurship, and then analyzes how the design and architecture of these new forms ushers in new challenges and opportunities for the modernization of trademark law altogether.

Trademark law plays a central, determinative role in the success or failure of the platform enterprise. At the broadest level, in Part II, this Article argues that the platform economy facilitates the emergence of what is called "macrobrands" - the rise of platform economies whose sole source of capital inheres in the value of the brand itself - the Airbnbs, Ubers, and eBays of the world.2 3 At the narrowest level, Part III argues that the platform economy, with its empowerment of the individual, has also facilitated a parallel emergence of the "microbrand" - the rise of discrete, small enterprises made up of individual businesses, each of whom have a strong interest in utilizing the basic principles of branding and trademark protection.

Indeed, this Article views the platform economy as a central opportunity to modernize existing trademark law to accord with the challenges of these new business models. As shown in Part II and Part III, the interaction between macrobrands and microbrands challenges trademark law to evolve to address the new issues presented by platform economies. At the same time, however, our existing frameworks are capacious enough to meet the challenges platforms pose, underscoring the wisdom of the basic, bedrock trademark principles in the process. In Part IV, we outline a host of suggestions to modernize, rather than displace, trademark law for the digital economy. While change can occur by legislation or voluntary measures, this Article focuses specifically on the formation of statutory safe harbors and the modification of the standards for infringement in common law. As this Article shows, these changes can both protect and encourage the vibrancy of the platform economy in an age of legal uncertainty.