A trademark is infringed when a mark or a similar mark is used in a way that is likely to confuse the public into believing that the trademark owner is the source or sponsor of products that it does not actually make or endorse. Trademark anti-dilution laws are intended to enable trademark owners to prevent the gradual weakening or whittling away of the strength of their marks even if the public is not likely to be confused. Until 1996, trademark dilution laws consisted of a patchwork of non-uniform state statutes and common law. In early 1996, Congress enacted the Federal Trademark Dilution Act (FTDA) to provide nationwide injunctive relief for diluting uses of nationally famous trademarks.
Federal Trademark Dilution Act
The Federal Trademark Dilution Act (FTDA) became law in 1995. The new statute amends the Lanham Act to provide a federal remedy for dilution. State law is not preempted. In fact, the laws of many states go farther in granting more protection than that provided in the federal statute. Although many states had enacted laws that prohibited trademark dilution, the FTDA was intended to provide uniform and nationwide protection for famous marks. “Dilution” is defined in the FTDA 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.” Prior to the enactment of the FTDA, courts found that dilution could occur as a result of either “blurring” or “tarnishment.” Both of these concepts are encompassed within the FTDA. The FTDA applies only to famous marks.
Famous Marks
In determining whether a mark is famous a court may consider the following non-exclusive factors:
the degree of inherent or acquired distinctiveness of the mark;
the duration and extent of use of the mark in connection with the goods or services with which the mark is used;
the duration and extent of advertising and publicity of the mark;
the geographical extent of the trading area in which the mark is used;
the channels of trade for the goods or services with which the mark is used;
the degree of recognition of the mark in the trading areas and channels of trade used by the marks’ owner and the person against whom the injunction is sought;
the nature and extent of use of the same or similar marks by third parties; and
whether the mark was registered under the Act of March 3, 1881, or the Act of February 20, 1905, or on the principal register.
Blurring
“Blurring” typically refers to the “whittling away” of distinctiveness caused by the unauthorized use of a mark on dissimilar products. Dilution by blurring can occur when a trademark is used by someone other than the trademark owner on products that are very different from those normally produced by the trademark owner
Tarnishment
“Tarnishment” involves the unauthorized use of a mark which links it to products that are of poor quality or which are portrayed in an unwholesome or unsavory context that is likely to reflect adversely upon the owner’s product.
Remedy – Injunctive Relief
Generally, only injunctive relief is available under the FTDA. However, if the defendant willfully intended to trade on the owner’s reputation or to cause dilution of the famous mark, the owner of that mark may also be entitled to other remedies, including defendant’s profits, damages, attorneys’ fees and destruction of the infringing goods. The availability of monetary relief is a striking departure from state dilution laws, which have typically provided only for injunctive relief. Additionally, the FTDA provides that the ownership of a valid federal registration is a complete bar to the assertion of a dilution claim under state law.
The FTDA allows injunctive relief to owners of famous marks against another’s use of the mark if:
the use of the mark is commercial,
the use began after the senior mark became famous, and
the use dilutes the distinctive quality of the mark.
Defenses to Allegations of Dilution
The following are not actionable under the FTDA:
fair use of a famous mark by another person in comparative commercial advertising or promotion to identify the competing goods or services of the owner of the famous mark
noncommercial use of a mark
all forms of news reporting and news commentary
State Dilution Laws
More than half of the states afford protection from trademark dilution through statutory or case law. The FTDA expressly states that the federal statute does not preempt state dilution laws. Where the federal statute provides protection for dilution of nationally famous marks, state statutes seek to protect interests of a more local nature. Courts have acknowledged that trademarks need not be nationally famous for a mark to be strong in a particular geographic region or industry segments. In addition, whereas the FTDA requires actual dilution, state laws sometimes require only a showing of likelihood of dilution to grant injunctive relief.
Dilution in the United States Patent and Trademark Office
Although the FTDA became effective in 1996, it was not until 1999 that dilution became a basis on which an application or registration of a mark could be challenged in a U.S. Patent and Trademark Office opposition or cancellation proceeding. It still is not a basis on which an examiner can reject an application during an ex parte examination.