The WSJ reports (subscription req’d) that Disney has withdrawn its application to trademark “Seal Team 6” “out of deference to the Navy, that is, the Navy’s own application to trademark “Seal Team” itself. The big winner here may have been good taste — imagine Christmas stockings stuffed with action figures representing the players in the OBL raid — plus a scaled model of his safehouse. Disney follows in Sony’s footsteps, which withdrew its trademark application for “shock and awe” under a wave of protest.

But what does the Navy have planned for the trademark? And how does that plan fit economic theory underlying intellectual property law? Will the Navy ensure the highest use of the property? Are the Navy’s incentives in creating this kind of property those that society wishes to reward with property rights?

The legal hypos are boundless. What would have happened if a Pakistani firm had filed an application for the same trademark —  for a very different purpose? Might some foreign countries seek to confiscate profits realized from the trademark under their own Son of Sam laws? If Disney had acquired “Seal Team 6,” would the Navy have the right to re-name the strike team “Seal Team 7” and market that moniker as the true OBL team name? What do individual members of the “team” have any property rights here?

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