The limited supply of competitively-effective trademarks has received significant attention in the legal community; however, there is little evidence on the magnitude of its impact on intellectual property and product market outcomes. This paper seeks to fill this gap by exploring the phenomenon of trademark suspensions, where multiple pending applications seek to register highly-similar marks. We focus on the subset of "close-race" suspensions, where filing dates were sufficiently close so that all applicants are unlikely to be aware of each other's interest in the contested mark. This allows us to treat the priority of applications as if it were random, and forms the foundation for estimating the impact of trademark suspensions on applications and firms. We find that suspensions are more likely to occur for competitively effective trademarks and in more congested trademark classes. Relative to their earlier-filed, "race winner" counterparts, later-filed applications experience an average of 1.5 years of additional examination pendency, and are 50% less likely to eventually obtain trademark registration. Tracking subsequent applications from the same firm, we also find that "race losers" exhibit a 20-30% lower hazard rate for the next product introduction in the same product class as the original application. Our findings highlight the trade-offs faced by firms and policy-makers active in congested product markets.
