Biker, biker, biker gang!

In an exquisitely American moment, your Katonomist was sipping an ice-cold Diet Root Beer (collective wincing by non-American readers) when a thoroughly American movement caught her eye: the now delayed US government’s movesto use trademark law to control American biker gangs. 

Previously reported by the IPKat in 2008,  the government has been trying to control the use of the Mongols Motorcycle Club’s trademark to curb the club’s activities by limiting the wearing of the club’s colours and symbols.

According to the club’s website, the Mongols are, “The baddest 1%er Motorcycle Club known worldwide.”  I’m assuming that the 1%er does not refer to their position in the income distribution curve but the concept that the members are not part of the law-abiding 99% of motorcyclists.

Statement hair

The current trademark, which presumably replaces a registration abandoned in 2014, includes the description code, “an image of a man with sunglasses, mustache, and queue.”  (No, not the British hobby, but the Manchu hairstyle.)

You may be wondering where the economics bit is going to kick in.  Here it is – the US government is seeking the limit the use of marks commonly used by members to signal membership.  Trademarks play a key role in signalling information.  Their colours, symbols and dress can easily identify members of the club.  The Mongols have a well-developed brand that relies heavily on this trademark and the signalling function it provides.  By limiting the trademark and the brand, the US government hopes to curb the club’s activities.  
    

Modern queue and bike

Signalling, and in this case, status signalling, is a useful economic function which reduces information asymmetry.  Information asymmetry, in which parties engaging in transactions have different information, can increase transaction costs.  In the case of motorcycle clubs, signalling through colours and dress makes membership easily identifiable.  Parties engaging in transactions will have more information – for example information on the likelihood of repeated transactions, quality of the goods on offer, enforcement mechanisms in breach of contract etc.

The branding and signalling associated with the Mongol’s trademarks reduces their transaction costs. Sporting the logos means that members can quickly and cheaply be identified, and identify other members. Much easier than quizzing each stranger about their membership. Particularly if you're selling illicit goods. 

But will the restriction on their TM have its intended effect? In practice, the Mongols will likely find ways of innovating around the restriction on their use of trademarks. They may engage in more subtle forms of tribal marking. Perhaps they’ll adopt the queue.

On this side of the pond, if we were to limit status signalling from man buns and fixies, how would tech hipsters find each other?