Undoubtedly, a trademark confers a defined “right to exclude,” but it is a limited exclusive right. In the sense of an “exclusive right” trademarks can be categorized as a form of property. “The right to use a trademark is recognized as a kind of property, of which the owner is entitled to the exclusive enjoyment to the extent that it has been actually used.” Justice Douglas referred to trademarks as “valuable business assets” and averted to the “policy of the law to protect them as assets of a business.” Justice Scalia observed that trademarks are the “‘property’ of the owner because he can exclude others from using them.” Justice Pitney stated:

Common law trademarks and the right to their exclusive use are of course to be classed among property rights … but only in the sense that a man’s right to the continued enjoyment of his trade reputation and the good-will that flows from it, free from unwarranted interference by others, is a property right, for the protection of which a trademark is an instrumentality.

While a trademark can be categorized as a kind of “property” right, such a characterization often creates more confusion than clarity. This is because the “property” parameters of a trademark are defined very differently from any other kind of “property.” In most cases, the exclusive “property” right of a trademark is defined by customer perception. In the United States, both the creation of rights in marks and the test of invasion of those rights is determined by the perceptions and associations that exist in the minds of the relevant buying public. Therefore, any “property” in trademarks is created and defined by the mental state of customers. Trademark law has many presumptions, assumptions and a few overriding public policies, but the central key is customer perception. Analogies to other forms of “property,” from real estate to patents and copyrights, falter on the basic definition of scope of trademark “property.”

The “property” in a trademark is the right to prevent confusion. As one court has explained:

A “trademark” is not that which is infringed. What is infringed is the right of the public to be free of confusion and the synonymous right of a trademark owner to control his product’s reputation. … The trademark laws exist not to “protect” trademarks, but, as above indicated, to protect the consuming public from confusion, concomitantly protecting the trademark owner’s right to a non-confused public.

Remarking on the tort law origins of trademark and unfair competition law, Justice O’Connor remarked:

The law of unfair competition has its roots in the common-law tort of deceit: its general concern is with protecting consumers from confusion as to source. While that concern may result in the creation of “quasi-property rights” in communicative symbols, the focus is on the protection of consumers, not the protection of producers as an incentive to product innovation.

Generally speaking, “[a] trademark owner has a property right only insofar as is necessary to prevent customer confusion as to who produced the goods and to facilitate differentiation of the trademark owner’s goods.”

Nevertheless, as a form of “property,” trademarks can be alienated like any piece of property. Trademarks can be bought, sold and licensed. But because they are merely symbols of good will, trademarks must be transferred very carefully, lest the symbol and its good will go separate ways. Notwithstanding the fragile nature of trademarks, businesspeople rightly regard them as valuable assets and are willing to pay large sums to buy or license a well-known mark. In speaking of the value of trademark rights, one court said that “theoretically and perhaps practically as well, this hard-earned right is as important as money in the bank.”

While a trademark is undoubtedly a significant business asset, particularly in today’s world, it is important to remember that simply obtaining a trademark does not entitle the trademark owner to take the trademarked word or phrase out of the world’s lexicon. To be sure, particularly in the United States where we hold the First Amendment above reproach by any laws, there are many legitimate and legal uses of a trademark.