™️Trademark Law Unit 6 – Trademark Dilution

What's Trademark Dilution?

• Trademark dilution weakens the distinctiveness and strength of a famous trademark
• Occurs when a similar mark is used on dissimilar goods or services (Nike shoes vs. Nike landscaping)
• Dilution by blurring impairs the distinctiveness of the famous mark
  • Consumers form new associations with the mark, diminishing its unique link to the original goods
• Dilution by tarnishment harms the reputation of the famous mark
  • Occurs when the mark is linked to inferior or unsavory products (Tiffany's dog food)
• Dilution differs from traditional trademark infringement as it doesn't require likelihood of confusion
• Protects the investment and goodwill built up in a famous trademark over time

Types of Trademark Dilution

• Dilution by blurring impairs the distinctiveness of a famous mark
  • Occurs when consumers form mental associations between the famous mark and the similar mark
  • Weakens the unique link between the famous mark and its original goods or services (Kodak bicycles)
• Dilution by tarnishment harms the reputation of a famous mark
  • Arises when the mark is linked to products of shoddy quality or unsavory nature
  • Portrays the famous mark in an unwholesome or unsavory context (Rolls-Royce garbage bags)
• Non-commercial use of a mark, like parody or commentary, generally doesn't constitute dilution
• Dilution can occur even in the absence of competition or likelihood of confusion

Legal Framework

• The Federal Trademark Dilution Act (FTDA) of 1995 first established federal dilution law
  • Required the mark to be famous and distinctive
  • Plaintiff had to prove actual dilution occurred
• The Trademark Dilution Revision Act (TDRA) of 2006 clarified and strengthened the FTDA
  • Expanded protection to marks that are famous within a niche market
  • Plaintiff only needs to show likelihood of dilution, not actual dilution
• State dilution laws, like California's, can offer broader protection than federal law
• Dilution protection is generally limited to famous, distinctive marks

Famous Marks and Why They Matter

• Famous marks are widely recognized by the general consuming public
  • Enjoy a high degree of distinctiveness and consumer recognition (Coca-Cola, Google)
• Famousness is often measured through consumer surveys and evidence of extensive use and promotion
• Famous marks are more likely to suffer dilution as consumers readily form mental associations
• Owners of famous marks have invested heavily in building brand recognition and goodwill
  • Dilution law protects this investment from being whittled away
• Niche fame, recognition within a specific market segment, can also qualify for dilution protection

Proving Dilution

• Under the TDRA, plaintiff must show the mark is famous and the defendant's use is likely to cause dilution
• Factors for determining likelihood of dilution by blurring:
  • Similarity between the marks
  • Distinctiveness of the famous mark
  • Extent of substantially exclusive use of the famous mark
  • Degree of recognition of the famous mark
  • Intent of the defendant to create an association
  • Actual association between the marks
• Proving dilution by tarnishment requires showing the defendant's use harms the reputation of the famous mark
  • Often shown through unsavory or poor quality products (Rolls-Royce car air fresheners)

Defenses and Exceptions

• Fair use, including nominative and descriptive fair use, is a defense to dilution claims
  • Allows use of a mark to describe the defendant's goods or to refer to the plaintiff's goods (comparing products)
• Noncommercial use, such as parody, commentary, and news reporting, is exempt from dilution liability
  • Protects free speech and allows critical discourse involving trademarks (Saturday Night Live skits)
• Prior use defense applies if the defendant used the mark before the plaintiff's mark became famous
• Federal registration is a complete bar to state dilution claims
  • Encourages federal registration and national uniformity in trademark law

Key Cases and Precedents

• Moseley v. V Secret Catalogue (2003): U.S. Supreme Court held that the FTDA required proof of actual dilution
  • Led to the enactment of the TDRA, which clarified that only likelihood of dilution is needed
• Nabisco v. PF Brands (1999): Second Circuit established 10 factor test for likelihood of dilution by blurring
  • Factors include distinctiveness, similarity of the marks, consumer sophistication, and predatory intent
• Starbucks v. Wolfe's Borough Coffee (2009): Second Circuit held that the TDRA does not require identity or near identity of the marks
  • Similarity is one of many factors in the blurring analysis
• V Secret Catalogue v. Moseley (2010): Sixth Circuit found that the TDRA overturned the Supreme Court's actual dilution requirement
  • Plaintiffs can prevail by showing likelihood of dilution

Real-World Impact and Examples

• Dilution law has been invoked to protect famous marks like Budweiser, Barbie, and Tiffany
  • Budweiser v. Buttwiser novelty products
  • Mattel v. Pitt's Barbecue Chain's Barbie-Q restaurant
• Louis Vuitton v. Haute Diggity Dog: Fourth Circuit found parody pet products did not dilute Louis Vuitton's mark
  • Parody is a protected fair use under the TDRA
• Nike v. Nikepal: Nike prevailed on dilution claim against Nikepal's laboratory equipment
  • Nikepal's use blurred the distinctiveness of the Nike mark
• Dilution law can be a powerful tool for owners of famous marks to protect their brand investment
  • Offers protection beyond the likelihood of confusion standard
  • Allows mark owners to police use of their marks in unrelated markets