Recent amendments to US Federal Trademark dilution law improve the protection afforded to genuinely famous trade marks and expressly recognise for the first time in a US statute the ‘blurring’ and ‘tarnishment ‘ theories of brand dilution. Jonathan Eisenberg of Manatt, Phelps & Phillips’ Los Angeles office reports
Jonathan M. Eisenberg, Esq.
Manatt, Phelps & Phillips, LLP, Los Angeles, CA
Summary of Recent Amendments to U.S. Federal Trademark Dilution Law
In October 2006, the U.S. Congress substantially amended the federal trademark dilution statute, which now provides expressly that the owner of a famous mark shall be entitled to an injunction against any other party that uses in commerce a mark that is merely likely to cause dilution of the famous mark. The owner of a famous mark can obtain injunctive relief without demonstrating actual dilution of the mark.
The new statute essentially overrules Moseley v. V Secret Catalogue, Inc., the 2003 U.S. Supreme Court decision holding that the owner of a famous mark must prove actual dilution of the mark to obtain relief in court. Now the more relaxed "likelihood of dilution" standard will govern U.S court cases as well as registration-related proceedings at the U.S. Patent and Trademark Office (the "PTO").
At least six other parts of the new statute clarify and make uniform aspects of trademark dilution law that had split federal courts:
1. A famous mark subject to the protection of federal dilution law may either be inherently distinctive (e.g., arbitrary, fanciful, or suggestive) or have acquired distinctiveness. (An inherently descriptive mark may acquire distinctiveness as so-called "secondary meaning" through high sales volume of branded goods or services, a long time in use, and/or the quality and quantity of advertising or promotion of the mark.)
2. The statute now expressly recognizes two theories of dilution, "blurring" and "tarnishment." "Dilution by blurring" is defined as "association arising from a mark or trade name and a famous mark that impairs the distinctiveness of the famous mark"; the statute provides a multi-factor test for courts to use in determining whether blurring exists in particular cases. "Dilution by tarnishment" is "association arising from the similarity between a mark or trade name and a famous mark that harms the reputation of the famous mark."
3. The owner of a famous mark can demonstrate dilution of the mark regardless of the absence of actual or likely confusion between the famous mark and the alleged offending mark. (Trademark infringement law turns on the likelihood of consumer confusion between the marks in question.)
4. The owner of a famous mark can obtain injunctive relief even if the opposing party is not in "competition" with the owner of the famous mark, and regardless of the absence of actual economic injury to the owner of the famous mark.
5. A mark is famous for dilution purposes only if it is widely recognized by the general consuming public in the United States (as opposed to being famous in a "niche market" only) as a designation of the source of the goods or services offered under the mark. But nationwide recognition is not the sole determinant of a mark's fame. The new statute provides an additional multi-factor but non-exhaustive test for whether a mark is famous, compressing the prior multi-factor test. Of particular note is that the test now provides clearly that advertising or publicity of the mark done by third parties, not just the mark's owner, counts as contributing to the fame of the mark. Also the mark need not be registered at the PTO to warrant protection under federal dilution law.
6. The fair-use defense to a dilution charge can exist where the accused party uses the famous mark for such purposes as "identifying and parodying, criticizing, or commenting upon the famous mark…"
In sum, the new law considerably strengthens the position of owners of truly famous marks.