Every year, all trademarks are put up for sale by the government.
The sale is a sealed bid auction. You can buy your own trademark. If you care about your trademark a lot and don't want someone else to buy it, you better bid a lot to be sure you keep it.
Revenue from the sale goes 99% to the previous owner, and 1% as a tax to the government.
Effectively the end result is a "trademark tax", where the tax amount is a fraction of the market value of the trademarks.
Also the scheme described is just equivalent to a 1% tax on the fair value of a trademark. It doesn't actually force anyone to sell (as long as they can afford the tax).
Similarly, a troll may even try to extort you into paying them to not bid on your trademark (= possibly lose your business).
Using the scheme suggested, any big company can simply buy any trademark they like. Whereas the little guy is now taxed annually just to stay where he is.
So a rounding error for Microsoft means I have to pony up some extra tax (10k? 100k?) every year, or lose my small niche trademark?
This seems to come up a lot when discussing copyright, patent, or trade mark reforms. There seems to be a desire to reduce the power of say a Disney, but the proposed solution has the exact opposite effect.
Everyone is taxed. The big guys with more valuable trademarks even more.
Not so helpful, though: one of the primary reasons for trademarks is to identify the source of goods and services. This plan would destabilize the link between the source and the goods or services, making it harder for consumers to know who there dealing with.
Colours that people can differentiate as trademarks as sort-of in fixed supply for any one industry. So similar arguments like those for land value tax (or a tax on spectrum) apply here.
Those arguments don't apply for a tax on capital.
If I’m bidding $100 and I have to pay $100 but the person i’m bidding against can bid up to $10000 before they have to pay $100… this will only result in a transfer of trademark when the owning company is defunct.
Seems like it helps nobody.
(Presumably, they wouldn't actually bid infinity, just in case someone else bids infinity-1 as a joke. But they could afford to bid what the Amazon brand is actually worth to them.)
That is nothing different than a yearly tax on holding a trademark. There the obvious issue is that companies can just lie to pay less taxes.
Easy solution: let the market decide. You say it is worth X -> If that number is right you should be more than happy to sell for 100X. If you are not happy to sell for that, that means you cheated on your tax.
Inb4: But then big companies can just buy you for 100 times your value.
... yeah, and? That is already the case and for many companies (e.g. all of ycombinator funded startups) that is even a goal.
One day a Hershey's rep calls and offers to buy your entire company for $4 million. You laugh and tell him not interested. You're not holding out for more, you just like the way things are.
It's annual trademark auction time. Last year you bid $10,000 to keep your trademark. This year, with sales almost double last years', you're bidding $25K, just to be on the safe side.
Next month, as expected, you get the annual letter from USPTO, except this time, the envelope is gold-colored. You open it up. There's a check inside for half a million dollars! Some unknown party bought your trademark. Over the few weeks, you contact your distributor and top retailers to explain to them that Ellesbarth's is no more, you've changed the name to Chubberstone's. But a few of them respond that they've already gotten a fresh shipment of Ellesbarth's. Later you start getting letters complaining that you've changed the taste. Sales plummet. Orders are cancelled. Nobody knows what "Chubberstone's" is, just that Ellesbarth's isn't what it used to be. Payments are due.
One day the phone rings. It's the Hershey's rep, asking if you want to sell all your IP... for $250K.
------ TLDR, I'm not keen on the idea of an annual sealed bid trademark auction, could lead to bad outcomes.
Yes, that's exactly how that tax is supposed to work. Duh.
On the other hand, losing the trademark likely would bankrupt you. You’d have to find a new domain, rebrand your website (breaking all bookmarks your users have, links they have in mails you sent them, etc) and social media accounts overnight, repaint all your trucks, refurnish your offices, throw away your company envelopes and letterhead, etc.
⇒ I think this is a good way to kill all business.
Also, consider the effect on hiring. “I see you worked at Google. What kind of company was that when you worked there?” or “why did you switch employer so often? I didn’t; ‘Foo’ became ‘Bar’ became ‘Baz’ became ‘Foo’ again”.
> Harberger taxation introduces a scheme in which the owner of a good pays a continuous tax based on the self-assessed value of that good, and at any time, someone else can buy the good from the owner at the taxed price.
> The rate of the tax moderates the balance between “allocative efficiency” (i.e. buyers can purchase a good when they value it more than a seller) and “investment efficiency” (i.e. increases in values to both buyer and seller are captured by seller).
Aimed at preventing lame business partners who just squat there, refusing to leave but adding no value.
- Corporations put large bids on their competitors products to drive up their bids as well (colluding has to be explicitly forbidden by law).
- As the amounts bid only result in a 1% payout, a class of high-interest loans for only the short duration of the bids appears.
- One year companies do a mass dump, and let their competitors have their worst inventory.
- A "twelve sigma" event happens and Morgan Stanley has to be bailed out because of all the shit loans needing to be repaid on the spot.
In that market, I don't think anyone would be taking out high interest loans, and the number of competitor bids might be a few hyper-targeted ones, for example trying to take 'whopper' from burger king.