The issue is defined in the text:
Hipsters and Preps alike are taking on the emblems normally associated with a gothic look. We know all about the Wal-Mart Nazi t-shirts that have been pulled from all many stores. But that was a simple case of plagiarism. [Crimson through the Bostonist]
The Supreme Court Dastar case shows that once something is in the public domain, the public is free to use it. That includes Nazi skulls.
The concept of "plagiarizing" a trademark per se is an interesting one, as a trademark is supposed to be recognized by itself as indicating a single source (i.e., the trademark is its own "citation.") [IPBiz distinguishes the "passing off" of an underlying good (e.g., a fake Rolex) as irrelevant to "trademark plagiarism."] If the Wal-Mart story is as indicated, it's bad taste, but it isn't plagiarism. The Crimson has plenty of Harvard examples to study for real plagiarism.
Returning to trademark law itself, recall the confrontation over trademarks between "real train" people and "model train" people, leading to a dropping of demands for trademark royalties by the "real train" people:
Union Pacific's move in dropping the royalties for model trains is the right one, said Becker.
"UP was probably surprised with the publicity that it generated and the resistance put up by the toy train manufacturing industry," Becker said. "They expected the toy train industry to just roll over. I think they were surprised by the tenacity of the response."
Programs such as UP's help protect a company's brand, but the railroad didn't need protection from the model industry, he said.
"The people in the model industry really want the items they buy to be accurate, so I don't think there was any problem of anyone creating any sort of a negative image," he said. "It was a foregone conclusion that their brand was going to be well-represented because the customers demand such perfection."
UP also filed lawsuits against model-train makers Athearn Inc. and Lionel LLC in 2004. The case against Athearn also was settled. The case against Lionel was dismissed after that company filed for bankruptcy. [from SoCalRailFan.com]
A post from IPKat on the use of Opel on toy cars:
*The German court had explained that the average German consumer was used to the use of trade marks on scale models of cars in order to indicate that they were reduced-scale reproductions of the real car. If this meant that the relevant public did not see the sign on Autec’s car as an indication that the products came from Adam Opel, or an undertaking economically linked with it, this would mean that the use did not affect the essential function of the Opel logo as registered for toys. [IPKat comment – this is a very narrow view of the essential function, and what jeopardises it. It’s limited to indicating origin, rather than distinguishing, and as a result seems to seek confusion, rather than harm to distinguishing power as in Arsenal v Reed CA]
*It was ultimately for the referring court to determine if the functions of a trade mark had been jeopardized, though the ECJ noted that Adam Opel had not alleged an effect on any of the other trade mark functions. [IPKat comment – more explicit acknowledgment than in Arsenal v Reed ECJ that a trade mark has functions other than the origin function]