Remember the days, 16 January 19961 until 4 March 20032, when many thought federal trademark dilution law required proof based on a "likelihood" of dilution, rather than "actual" dilution? Remember when Victor's Little Secret spoiled Victoria's Secret's party?
Ringing in a new era of trademark dilution law, which somewhat resembles many people's understanding of the law circa 1996, President Bush signed the Trademark Dilution Revision Act (TDRA) on 6 October 2006. As many expected, famous mark owners were invited to party and relive the glory days, while unsanctioned users of famous mark were reminded that they don't get to have fun with the goodwill of others. So what's to celebrate, you ask. Below is a brief overview of key aspects of the TDRA:
Favoring Famous Owners (Plaintiffs)
"Likelihood" of Dilution in Again
The TDRA abolishes the "actual" dilution standard, replacing it with the likelihood of dilution standard on which many famous mark owners previously relied. Although the courts will still have to determine how to measure "likelihood" of dilution, it is sure to be modeled on the likelihood of confusion standard upon which trademark infringement actions are based. Obviously, this should make trademark dilution much easier for plaintiffs to prove.
Blurring & Tarnishment Spelled Out
Old federal dilution law never did specify whether both dilution by blurring and dilution by tarnishment were covered. Now, however, the TDRA makes this clear. Dilution by blurring occurs where an association impairs a mark's distinctiveness. Dilution by tarnishment covers any association that harms a mark's reputation. How courts will actually interpret these broad definitions is another matter, but generally they favor trademark plaintiffs.
Acquired Distinctiveness Is Enough
Under previous federal dilution law, courts often differed on whether dilution of the "distinctive quality of the famous mark" meant a mark must be inherently distinctive or whether acquired distinctiveness was enough. The TDRA now specifies that distinctiveness acquired through secondary meaning is sufficient to bring a dilution action, which helps trademark plaintiffs.
Favoring Unsanctioned Users (Defendants)
Niche Fame Is Out
Courts long struggled with whether a mark having niche fame, i.e., fame within a specific region or category, was protected under federal dilution law. The TDRA resolves this issue in favor of defendants. As the current law reads, a mark is only "famous" and entitled to dilution protection "if it is widely recognized by the general consuming public of the United States as a designation of source of the goods or services of the mark's owner." Marks famous only in some podunk town, the state of Maryland, or even the southern half of the United States should not be considered famous for trademark dilution purposes.
Unregistered Trade Dress Burden
The new dilution law somewhat clarifies a mark owner's burden of proving dilution of unregistered trade dress. Taken as a whole, the claimed trade dress cannot be functional and must be famous. In addition, unregistered matter must be famous separate and apart from any fame of a registered mark. This means that a mark owner cannot rely on the fame of a registered mark to establish fame of unregistered trade dress, even if the famous mark is incorporated in unregistered trade dress.
Fair Use Expressly In the Act
The TDRA clarifies fair use defenses by providing express protection for comparative advertising, parodies, criticism and comments. Although these protections are now more apparent, they do not really afford defendants more protection than what they already had. Nevertheless, the clarifications work in favor of trademark defendants.
Although the favors dished out appear even (3 to 3), the Trademark Dilution Revision Act considerably broadened federal trademark dilution law, benefiting owners of famous marks. The original impetus behind revising federal dilution law was to change the standard from "actual" dilution to "likelihood" of dilution, which would have been a huge win for owners of famous marks without more. But, in many ways, the TDRA remade dilution law altogether. The net effect of the TDRA is to greatly expand the rights of owners of famous marks and better equip them to succeed in dilution actions, while clarifying some minor ambiguities in favor of defendants. So, for owners of a famous mark, the party is on. But for unsanctioned users of famous marks, the party is looking less and less inviting.
1 This is the date the Federal Trademark Dilution Act took effect.
2 On 4 March 2003, the Supreme Court ruled, Moseley v. V Secret Catalogue, Inc., 537 U.S. 418 (2003), that to succeed in proving dilution under the Trademark Dilution Act, a plaintiff must prove "actual" dilution, rather than a "likelihood" of dilution.
Courtesy of Jason A. Cody, Esq.