Trademark dilution

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Trademark dilution is a trademark law concept giving the owner of a famous trademark standing to forbid others from using that mark in a way that would lessen its uniqueness. In most cases, trademark dilution involves an unauthorized use of another's trademark on products that do not compete with, and have little connection with, those of the trademark owner. For example, a famous trademark used by one company to refer to hair care products might be diluted if another company began using a similar mark to refer to breakfast cereals or spark plugs.^[1]. Dilution is a basis of trademark infringement that only applies to famous marks. With non-famous marks, the owner of the mark must show that the allegedly infringing use creates a likelihood of confusion as to the source of the product or service being identified by the allegedly infringing use. With non-famous marks, it is highly unlikely a likelihood of confusion will be found if the products or services are in unrelated markets. However, with famous marks, any use by another person of the mark has the potential for confusion since a famous mark is so well-known among the consuming public that people will assume affiliation with the owner of the mark regardless of the product or service being sold under the infringing use.

Background

Trademark law is generally focused on the need for consumer protection. Consequently, trademark law traditionally concerned itself with situations where an unauthorized party sold goods that are directly competitive with or at least related to those sold by the trademark owner. A trademark is diluted when the use of similar or identical trademarks in other non-competing markets means that the trademark in and of itself will lose its capacity to signify a single source. In other words, unlike ordinary trademark law, dilution protection extends to trademark uses that do not confuse consumers regarding who has made a product. Instead, dilution protection law aims to protect sufficiently strong trademarks from losing their singular association in the public mind with a particular product, perhaps imagined if the trademark were to be encountered independently of any product (e.g., just the word Pepsi spoken, or on a billboard).^[2]

Requirements for protection

The strength required for a trademark to deserve dilution protection differs among jurisdictions, though it generally includes the requirement that it must be distinctive, famous, or even unique. Such trademarks would include instantly recognizable brand names, such as Coca-Cola, Kleenex, Kool-Aid, or Sony, and unique terms that were invented (such as Exxon) rather than surnames (such as Ford or Zamboni) or ordinary words in language. Some jurisdictions require additional registration of these trademarks as defensive marks in order to qualify for dilution protection.

Another way of describing the necessary strength of a trademark may establish some basis for dilution protection from a consumer-confusion standpoint. Truly famous trademarks are likely to be seen in many different contexts due to branching out or simple sponsorship, to the extent that there may be very few markets, if any, that a consumer would be surprised to see that famous trademark involved in. A prime example may be the past involvement of Coca-Cola in clothing lines.

Blurring and tarnishment

Dilution is sometimes divided into two related concepts: blurring, or essentially basic dilution, which "blurs" a mark from association with only one product to signify other products in other markets (such as "Kodak shoes"); and tarnishment, which is the weakening of a mark through unsavory or unflattering associations.^[3] Not all dilution protection laws recognize tarnishment as an included concept.

Trademark dilution in the United States

Prior to specifically targeted laws being adopted, dilution protection was used in some U.S. jurisdictions to attack domain name infringement of trademarks (see Cybersquatting). For example, in the 1998 case of Panavision International v. Toeppen, defendant Toeppen registered the domain name www.panavision.com, and posted aerial views of the city of Pana, Illinois on the site. The Ninth Circuit Court of Appeals found that trademark dilution occurred when potential customers of Panavision could not find its web site at panavision.com, and instead were forced to search through other (less obvious) domain names. The fact that potential customers might be discouraged from locating Panavision's legitimate website, coupled with evidence that Toeppen was in the business of registering domain names for profit, led the court to find that Toeppen's conduct "diminished the capacity of the Panavision marks to identify and distinguish Panavision's goods and services on the Internet", and thus constituted dilution.^[4]

Lately, the Trademark Dilution Revision Act of 2006, or H.R. 683, was signed into law. H.R. 683 overturned the Supreme Court decision in Moseley v. V Secret Catalogue, Inc., 537 U.S. 418 (2003). Moseley held the plaintiff needed to prove actual dilution under the Federal Trademark Dilution Act ("FTDA"). The new law revises the FTDA so that the plaintiff only needs to show the defendant's mark is likely to cause dilution.^[5] However, the revision also reduced the universe of marks falling under its protection, requiring that marks be nationally well known to qualify for protection from dilution.

For example, when Wolfe's Borough Coffee, Inc., a New Hampshire-based coffee company, sold its coffee under the trademarks that included the words “Charbucks Blend” and "Mr. Charbucks," Starbucks Corporation sued, claiming that the use of the word “Charbucks” diluted the “Starbucks” mark by both blurring and tarnishment. The Second Circuit Court of Appeals decided^[6] that marks need not be “substantially similar” under the FTDA for dilution to occur when other factors supporting a finding of dilution, such as the distinctiveness of the famous mark and the degree of its recognition, were present. In its decision, the court found that these other factors may be sufficient to support a dilution claim and remanded the case to the district court in order to determine whether dilution had in fact occurred.^[7]

See also

• Genericized trademark
• Disparagement

References

1. ^ See Ty Inc. v. Perryman, 306 F.3d 509 (7th Cir. 2002)
2. ^ Ty Inc. v. Perryman, 306 F.3d 509 (7th Cir. 2002)
3. ^ Louis Vuitton Malletier S.A. v. Haute Diggity Dog, LLC, 464 F. Supp. 2d 495, 504-05 (E.D. Va. 2006)
4. ^ Panavision Int'l v. Toeppen, 141 F.3d 1316 (9th Cir. 1998)
5. ^ Trademark Dilution Revision Act of 2006, Pub.L. 109-312, § 2, 120 Stat. 1730, 1730-32 (2006) (amending 15 U.S.C. § 1125(c) (1946))
6. ^ Starbucks Corporation v. Wolfe’s Borough Coffee, Inc. d/b/a Black Bear Court Decision
7. ^ "Has STARBUCKS Been Diluted? The Ongoing Effort to Protect Famous Marks" by Steve Abreu

Further reading

• Ilanah Simon, The Actual Dilution Requirement in the United States, United Kingdom and European Union: A Comparative Analysis, Journal of Science & Technology Law, Volume 12 Issue 2 - Summer 2006

External links

• Trademark Act of 1946 (aka Title 15, Chapter 22, of the United States Code) also here Registration of trademarks is Sec. 1051, and the prohibition of dilution is in Sec. 1125
• Text of the Trademark Dilution Revision Act of 2006 from GPO