Federal Trademark Dilution

Federal Law protects trademarks from dilution from others. Recent changes to the federal law broadens the rights granted to famous trademarks under the Trademark Act of 1946 (also known as the Lanham Act). It strengthens the protection that famous trademarks are given by prohibiting dilution of the famous trademarks by third parties.

Determining that a Trademark is “Famous”

The Federal Trademark Dilution Act outlines specific characteristics of a trademark that qualify it as “famous,” including:

1. the degree of inherent or acquired distinctiveness of the mark;
   
   
2. the duration and extent of use of the mark;
   
   
3. the duration and extent of advertising and publicity;
   
   
4. the geographical extent of the trading area in which the mark is used;
   
   
5. the channels of trade;
   
   
6. the degree of recognition of the mark in the trading areas and channels of trade used by the mark’s owner and the person against whom the injunction is sought;
   
   
7. the nature and extent of use of the same or similar marks by third parties; and
   
   
8. whether the owner of the mark has a valid federal registration.

Determining Dilution

The Federal Trademark Dilution Act defines “dilution” as “the lessening of the capacity of a famous mark to identify and distinguish goods or services, regardless of the presence or absence of

1. competition between the owner of the famous mark and other parties, or
   
   
2. likelihood of confusion, mistake, or deception.”

Dilution generally occurs in one of two ways. One is known as the “blurring” of the distinctiveness of a trademark, which occurs when the trademark is used on a product different in nature from the original, causing the connection between the trademark and the product it was originally used for to “weaken in the minds of consumers.” Dilution can also occur in the form of “tarnishment,” in which “products that are of poor quality or which are portrayed in an unwholesome or unsavory context” use the famous trademark, “tarnishing” the reputation of the famous trademark.

Exemptions to the Act

The Federal Trademark Dilution Act does have some exemptions, including:

1. “fair use” of a mark in the context of comparative commercial advertising or promotion;
   
   
2. non-commercial uses, such as parody, satire and editorial commentary; and
   
   
3. all forms of news reporting and news commentary.

These exemptions ensure that famous trademarks receive protection without infringing on rights granted in the First Amendment.

Remedies

Generally, the only remedy available under the Dilution Act is an injunction against further dilution. However, if a plaintiff can show that the defendant willfully sought to “trade on the owner’s reputation or to cause dilution of the mark,” then attorney fees, monetary damages and even treble damages are available.