Trademark dilution Featured

8:00pm EDT August 22, 2005
Congress is poised to give the owners of famous trademarks a powerful new weapon to prevent erosion of their trademark rights.

The Senate Judiciary Committee is considering the Trademark Dilution Revision Act of 2005, which would restore trademark dilution as a powerful cause of action for trademark owners after a 2002 Supreme Court decision imposed strict requirements on trademark owners seeking to prove dilution. The bill passed the House with overwhelming bipartisan support in April and is expected to pass the Senate and be signed into law within the next few months.

The concept of trademark dilution differs significantly from the more commonly recognized violation of trademark infringement. Trademark infringement is based on protecting consumers from confusion. Under an infringement analysis, a trademark owner must show that the alleged infringer’s use of a similar mark is likely to cause consumer confusion with the owner’s trademark.

Courts weigh a number of factors in determining the likelihood of confusion, including the degree of similarity of the parties’ trademarks, goods and services, and the extent to which these goods and services are sold through the same or similar channels of trade. Therefore, it may be difficult to prove trademark infringement where the parties sell different products through different channels, even if the marks are identical.

However, dilution protection shields the trademark holder rather than the consumer. Dilution protection is thus more akin to copyright or patent protection, since the trademark owner is not required to show a likelihood of consumer confusion to establish dilution.

Instead, the trademark owner must show that the mark is famous and that the junior user’s mark is likely to dilute the fame of the senior user’s mark by preventing consumers from identifying the famous mark exclusively with the senior user’s goods and/or services. This can occur even where the parties’ goods and services are not in competition.

For example, Congress has noted that DuPont shoes, Kodak pianos and Buick aspirin are examples of potential dilution, since pianos sold under the Kodak mark would weaken its distinctiveness, even if consumers did not believe that the pianos were actually produced by Eastman Kodak Co.

Congress first passed a trademark dilution law, the Federal Trademark Anti-Dilution Act, in 1995. However, in 2002, the effectiveness of this law was drastically reduced by the Supreme Court’s decision in the case of Mosely v. Victoria’s Secret Catalog Inc. In the Victoria’s Secret case, the Supreme Court ruled that a trademark owner must show actual dilution rather than merely a likelihood of dilution. Because it is difficult to quantify the distinctiveness of a mark and to prove that distinctiveness has been damaged, trademark owners have found it difficult to successfully bring dilution claims under the new standard.

The legislation currently considered by Congress would codify the likelihood of dilution standard as the appropriate test for dilution claims, thus effectively overruling the Supreme Court’s holding in Victoria’s Secret, which required actual dilution.

If passed, the law would require the owner of a famous mark to prove a likelihood of association between its mark and the junior mark, arising from the similarity of the marks, which would impair the distinctiveness of the famous mark. This test would depend in large part upon the degree of similarity between the marks and the degree of fame in the senior mark.

Additionally, the law would also require that the trademark at issue be widely recognized by the general consuming public of the United States, not merely in a certain geographic area or in a certain market niche.

If the bill is passed, it will give the owners of nationally famous trademarks a new weapon to prevent weakening of their trademark rights. It will also force small and mid-sized businesses to take a second look at their trade names and trademarks to ensure that they are not using conflicting marks.

Bassam N. Ibrahim, a shareholder, and Bryce J. Maynard, an associate, are members of the Intellectual Property Group at Buchanan Ingersoll PC. For more information about trademark and intellectual property matters, reach Bassam at ibrahimbn@bipc.com or Bryce at maynardbj@bipc.com.