In this Article, I argue that trademark licensors should be subjected to liability under the apparent manufacturer doctrine in two situations: (1) when a licensor induces consumers to believe the licensor manufactured the product, or (2) when a licensor induces consumers to believe that the licensor controlled the standards or specifications for manufacturing the product. Under either prong of the proposed test, a plaintiff would be required to show that a reasonable consumer of the licensed product would have relied on the trademark in the requisite manner. Once the plaintiff makes this showing, courts would then presume that the actual consumer of the product at issue in fact so relied. However, trademark licensors would be permitted to rebut this presumption, and defeat liability, by showing that the actual consumer did not, in fact, so rely. Finally, under the approach proposed here, a trademark licensor would be absolved of liability by showing that the actual manufacturer was jurisdictionally available and able to satisfy a likely judgment against it.
The proposed approach validates society's interest in holding licensors accountable for implicitly vouching for the safety of their licensees' goods. It protects consumers who detrimentally rely on trademarks as substitutes for investigation into the safety and quality of goods. It preserves a causal connection between the licensor's holding itself out as the manufacturer and the plaintiff's injuries by requiring proof of actual and justifiable reliance. And it minimizes unnecessary litigation and insurance costs (while still ensuring an adequate source of compensation) by immunizing licensors who demonstrate that the actual manufacturer is solvent and subject to personal jurisdiction in states where the product was sold.
The remainder of this Article is divided into three parts. Part II provides an overview of the basic functions of trademarks and of the historical development of trademark licensing. Part III summarizes the history of the apparent manufacturer doctrine and its application to trademark licensors in the case law to date. Part IV provides a critical assessment of the apparent manufacturer doctrine as it has been construed by the Restatement (Third) of Torts and argues that the doctrine should apply to trademark licensors under the test proposed above.
49 Case W. Res. L. Rev. 671 (1999).