Even efficient and pro-competitive interpretations of trademark law will still foster additional clog

Efficient and pro-competitive interpretations of trademark law will, on the other hand, face repeated challenges. Almost by definition, successfully challenging an efficient interpretation of trademark law will lead to less competition. It may do so directly, by prohibiting a would-be competitor from entering a market altogether. Or it may do so indirectly, by increasing a competitor’s costs or the degree of product differentiation in the market. Where increased competition reduces economic rents, decreased competition increases them. For a trademark plaintiff, the prospect of capturing those increased rents provides a powerful incentive to challenge an efficient interpretation of trademark law if they believe they have a chance to persuade a court to reinterpret trademark law in a way that reduces competition. As a result, even if a court gets it right in a given case and adopts an efficient, pro-competitive interpretation of trademark law, we should expect self-interested trademark plaintiffs to repeatedly challenge the resulting legal rule. Given heterogeneity in the a priori beliefs of judges as to the merits of various legal rules, such repeated challenges will, sooner or later, find a sympathetic judicial ear. When they do, the original pro-competitive interpretation of trademark law will become less so, as later decisions limit and distinguish it. The inevitable result of this process is, again, exactly what we have observed: good decisions don’t last.