Trademark squatters: Theory and evidence from Chile

We explore the phenomenon of “trademark squatting” – a situation in which someone other than the original brand owner obtains a trademark on a brand. For this purpose, we develop a model that examines the effect of squatting on brand owners trademark filing behavior and create an algorithm that identifies squatters empirically in the Chilean trademark register. Our empirical analysis shows that squatting is a systematic and frequent phenomenon and, as predicted by our theory, brand owners that have been exposed to squatting file more trademarks in a broader range of classes after being squatted.