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How much is a distinctive name worth? Enough for companies to sue each other for adopting a similar one. 

That assumption underpins both trademark law and marketing theory, but there have been few studies demonstrating the actual value of a distinguishing name. It’s a difficult question to study because competitors tend to adopt different brand names to avoid trademark infringement, says intellectual property expert Christopher Buccafusco. 

Take the fast-food sector, for example. Burger King, McDonald’s, and Wendy’s all sell a similar burger but under very different names — the Whopper, the Quarter Pounder, and Dave’s Single.

“If you study most modern markets, it's really hard to find substantial amounts of name overlap that you can actually test,” said Buccafusco, the Edward & Ellen Schwarzman Distinguished Professor of Law at Duke Law School.

“The problem for scholars,” he adds, “is trademark law has worked too well for too long.”

Buccafusco and co-authors Jonathan S. Masur and Ryan Whalen, all law professors and avid wine collectors, set out to research the value of a brand name using evidence from the Bordeaux wine market. They detail their study and findings in a paper published in the peer-reviewed Journal of Empirical Legal Studies.

Many of the more than 5,000 wineries operating in the Bordeaux region of France have similar names adopted hundreds of years ago — well before the development of modern trademark law, marketing, and branding. 

What’s more, the inheritance laws of the time meant that a single estate – say, Château Léoville – was subdivided amongst heirs who retained the original name with a slight tweak: today, a wine consumer can choose between Château Léoville Poyferré, Château Léoville-Las Cases, and Château Léoville Barton. 

“Because trademark law wasn't active back in the 17th and 18th centuries when all of these chateaus were picking their names, we actually had a really cool data set,” said Buccafusco.

An uncommon name adds value

Only 28% of producers have completely unique names. On the other end of the spectrum, more than 100 winemakers use the word “croix,” or cross, in their names: there are three Château la Croix, two Château de la Croixs, a Château Lacroix, and dozens more in that vein. Small wonder that marketers sometimes refer to the wine aisle as a “wall of confusion.”

Buccafusco and his co-authors hypothesized that the impact of having a distinctive name would be stratified by the type of wine. They guessed that higher-quality wines would benefit more from having a distinctive name, since they appeal to a taste-conscious consumer willing to pay more for a wine and seek it out again. But for a lower-quality wine, clustering around the “linguistic core,” or having a more common name, might be a net positive because it could be mistaken for a higher-quality wine with a similar name. 

“At the bottom end of the quality spectrum, you might think that having a name that sounds like your famous neighbor is a good idea,” Buccafusco said, noting that someone buying wine at a grocery store or ordering a carafe of house wine at a bistro may not be paying close attention to the brand name.

To test this theory, they constructed a dataset consisting of 5,775 wines made by 2,324 unique producers between 2010 to 2021, along with pricing data and the wine’s average rating. They measured each name’s distinctiveness by comparing it to the next ten most similar names. 

Contrary to their initial hunch, the authors found that brand distinctiveness adds a significant price premium at all segments of the Bordeaux market: low-, mid- and high-quality wines. 

“If you're selling $1,000 Bordeaux, it's great to have a unique name. If you're selling $10 Bordeaux, it’s great to have a unique name,” said Buccafusco. “Uniqueness is valuable across the price spectrum.”

The added value, in percentage terms, was similar for both expensive and cheap wines. In their dataset, uncommonly named highly-rated wines sell for nearly twice as much – 198% more – than commonly named highly-rated wines. At the low end, distinctively named low-rated wines sell for 185% more than their commonly named peers. 

“From a market perspective, it's not a small finding,” Buccafusco notes. “These are real numbers for firms of this size. To be able to get that kind of boost in your price, we're not talking just about a couple cents here or there. We're talking about a real, meaningful boost in price.”

Their findings suggest that if distinctively named Bordeaux wines see a price premium, trademark law is functioning as intended. By preventing brand names from clustering too closely together, consumers retain the ability to distinguish between wines, and the wineries that invest in improving their quality can reap the full benefits of their investments by charging higher prices. 

In that sense, “Trademark law is doing a good thing,” said Buccafusco. “It’s good for consumers, and it’s good for brands as well.”

Another takeaway from their research? For those willing to seek them out, some delicious bargains might be hiding on that “wall of confusion.” 

“It certainly suggests that there are values to be had in similarly named wines,” Buccafusco said. “We should be looking for the hidden gems with similar names.”