From PLI’s Treatise
Trademark Law: A Practitioner’s
Guide
By Siegrun D. Kane
#651
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Chapter 9
The Evolution of Dilution:
Survival of the Strongest
§ 9:1 Overview
§ 9:1.1 Dilution Before the Supreme Court Victoria’s Secret Decision
§ 9:1.2 The Victoria’s Secret Decision
§ 9:2 Dilution Under State Law
§ 9:2.1 Dilution Defined
§ 9:2.2 The State Statutes Mean What They Say— Confusion and
Competition Are Not Required
§ 9:2.3 Elements of a Dilution Cause of Action Under Early State
Statutes
[A] Requirement
of Distinctiveness
[B] Requirement
of Likely Dilution
§ 9:2.4 The Role of Intent
§ 9:2.5 Remedies
§ 9:3 Dilution Under the Federal Trademark Dilution Act (FTDA)
§ 9:3.1 The Movement Toward National Protection
§ 9:3.2 Purpose of the FTDA
§ 9:3.3 Dilution Defined
§ 9:3.4 Elements of a Dilution Cause of Action Under the FTDA
[A] “Famous”
Mark Requirement
[B] Adoption
After Plaintiff’s Mark Became Famous
[C] Commercial
Use in Commerce
[D] Dilution
of the Distinctive Quality of Plaintiff’s Famous Mark
§ 9:3.5 Actual Harm Requirement
[A] The
Split in the Circuits
[B] The
Supreme Court Speaks:
Victor/Victoria—A Play in Three Acts
[C] Supreme
Court’s View of Dilution: Actual Harm Is Required
[D] Identical
Versus Nonidentical Marks:
A Distinction with a Difference
[E] What
Else the Court Said
§ 9:3.6 Remedies
§ 9:3.7 Defenses
[A] Federal
Registration Defense
[B] Fair
Use and First Amendment Defenses Under Section 43(c)
[C] Fair
Use Under Section 33(b)(4)
§ 9:4 Dilution in Patent and Trademark Office Proceedings
§ 9:5 The Continuing Evolution of the Species
§ 9:5.1 Protection of Niche Marks
§ 9:5.2 Meaning of “Distinctive and Famous”
[A] Are
“Distinctive” and “Famous” Two Separate Requirements?
[B] Does
the FTDA Protect Marks That Have Acquired Distinctiveness Through Secondary
Meaning?
§ 9:5.3 Role of Dilution Factors
§ 9:5.4 Protection of Product Design Trade Dress
§ 9:5.5 Dilution and Retroactivity: It’s Not Over Till the Highest
Court Sings
§ 9:5.6 Role of Tarnishment
§
9:1 Overview
Trademark law is
intended to (1) secure the goodwill of the trademark owner’s business; and (2)
protect the ability of consumers to distinguish among competing producers by
prohibiting uses that are likely to cause confusion, mistake, or deception.1
Dilution law, on the other hand, is intended to protect the value and
uniqueness of plaintiff’s mark without the need to show likelihood of
confusion.2
§
9:1.1 Dilution Before the
Supreme Court Victoria’s Secret Decision
Dilution law was
originally the creature of state statutes. The “evil” that the state dilution
statutes sought to remedy was
not public confusion caused by similar
products or services sold by competitors, but a cancer-like growth of
dissimilar products or services which feeds upon the business reputation of an
established distinctive trade-mark or name.3
Massachusetts
enacted the first state dilution statute in 1947.4
By the late 1950s about two dozen states had passed dilution statutes. These
statutes provided injunctive relief for dilution of the “distinctive quality”
of plaintiff’s mark “notwithstanding the absence of competition between the
parties or the absence of confusion as to the source of goods or services.”5
At first, courts
interpreting state dilution statutes were slow to grant dilution protection
where plaintiff failed to prove likely confusion. Eventually, the courts
accepted that there really is a dilution cause of action and even began to
extend protection to marks that were not well known to the general public.6
As an increasing
number of states adopted dilution statutes, efforts were directed to enactment
of a federal statute that would provide (1) dilution protection regardless of
the jurisdiction where suit was brought and (2) nationwide injunctive relief.7
These efforts succeeded when the Federal Trademark Dilution Act (FTDA) became
law in January 1996.
But even as
dilution ascended the national stage, courts were becoming leery of extending
dilution protection, for example, to marks that were not truly famous.8
As the Supreme Court decision in the Victoria’s
Secret case loomed on the horizon, the debate over the proper scope of
dilution intensified. However, while Victoria’s
Secret stimulated discussion of many aspects of dilution, the specific
issue before the Supreme Court was a limited one.
The Supreme Court
granted certiorari in Victoria’s Secret
to decide whether “objective proof of actual injury to the economic value of a
famous mark (as opposed to a presumption of harm arising from a subjective
‘likelihood of dilution’ standard) is a requisite for relief under the FTDA.”9
§
9:1.2 The Victoria’s Secret Decision
After reviewing
the purpose and history of dilution law, the Court in Victoria’s Secret held that proof of actual harm (actual dilution)
as opposed to likely dilution, was required under the FTDA. The decision was
based on the FTDA language “causes dilution,” which differed from the
“likelihood . . . of dilution” language of the state statutes.
The Court equated
proof of actual harm with proof that defendant’s use affects the consumer’s
conception of plaintiff’s mark. It is not sufficient that defendant’s mark
triggers a mental association with plaintiff’s mark. At least in the situation
where defendant’s mark is not identical, plaintiff must prove that defendant’s
mark has an impact on the strength of plaintiff’s mark.10
While
requiring proof of actual harm under the FTDA, the Court also indicated that
(1) proof of the economic consequences of the harm, for example, lost sales or
profits, is not required, and (2) use of a mark identical to a famous mark may
by itself be circumstantial proof of actual harm.11
Although
there is no doubt that dilution survives after Victoria’s Secret, weaker members of the species (for example, more
tenuous claims involving dissimilar marks) may be in danger because of the
difficulties of proving actual harm.
To fully
understand what the Supreme Court did and did not decide in Victoria’s Secret and the implications
for future dilution claims, we need to look at the history of dilution
protection under state law.
§
9:2 Dilution Under State Law
§
9:2.1 Dilution Defined
Dilution is
characterized as a “whittling down” of the identity or reputation of a trade
name or mark.12 To put it another way, dilution corrodes
a trademark by “blurring its product identification or by damaging positive
associations that have attached to it.”13
§
9:2.2 The State Statutes
Mean What They Say— Confusion and Competition Are Not Required
The New York
statute, enacted in 1961, uses language typical of statutes in other states
that were enacted before the FTDA. It reads:
Likelihood of injury to business
reputation or of dilution of the distinctive quality of a mark or trade name
shall be a ground for injunctive relief in cases of infringement of a mark
registered or not registered or in cases of unfair competition, notwithstanding
the absence of competition between the parties or the absence of confusion as
to the source of goods or services.14
For many years
courts interpreted the dilution statutes as though competition and confusion
were required—despite the explicit statutory language to the contrary.15
Those cases that did find dilution did so only after a finding of confusion.16
The reverse was also true; those cases that did not find confusion did not find
dilution.17 This “tying” phenomenon continued even
after courts began to acknowledge that dilution did not require confusion.18
The Pillsbury case was one of the first
cases to make a clear distinction between the confusion and dilution causes of
action. After a thorough review of the pertinent confusion factors, the court
determined that confusion was not likely, but upheld plaintiff’s dilution
claim.19
There is no doubt
now that the state statutes mean what they say: “Neither competition between
the parties nor confusion about the source of products is necessary to state a
cause of action for dilution.”20 As noted by the Second Circuit, “injury
to a recognized trade name, rather than damage arising from confusion among
consumers, lies at the heart of the wrong.”21
The next
question, of course, is what is necessary?
§
9:2.3 Elements of a
Dilution Cause of Action Under Early State Statutes
State dilution
statutes enacted before the FTDA required that:
1. the
mark or name be of “distinctive quality”;
and
2. there
be likelihood of dilution.22
Over a dozen
states, including New York and California, retain the original statutory
language. More than twenty state statutes enacted or amended after passage of
the FTDA have adopted the FTDA requirements that the mark be famous and that
defendant’s use “cause dilution.”23
[A] Requirement
of Distinctiveness
It is still
unsettled as to just how distinctive a mark must be to qualify for protection
against dilution under the original state statutes. Some commentators have
suggested that only “famous” or “celebrated” marks should be protected.24
The Restatement of Unfair Competition
uses the term “highly distinctive” in describing a mark eligible for dilution
protection under state statutes.25 Other authorities phrased the test this
way: The mark must be “truly of distinctive quality or have a secondary meaning
in the mind of the public.”26
Examples of
well-known marks protected under the pre-FTDA state statutes include:
Cabbage Patch
Kids for dolls versus Garbage Pail Kids on bubble gum cards;27
American Express card versus America Express mock credit card with condom and slogan Never
Leave Home Without It;28
Coca-Cola bottle shape versus Mad Scientist Magic Powder bubble gum
in plastic container shaped like Coke bottle,29 and
John Deere deer logo versus an altered version
showing a small, frightened deer running away from the Yard-Man lawn tractor.30
Less well-known marks protected under the original state
statutes include:
Cinnabar for beauty products versus Cinnabar for haircutting salon.31
Cookie Jar and design for banking services versus Cookie Jar and design for topless go-go
bar.32
Wedgwood for residential real estate versus Wedgwood for retirement apartments.33
American United
Life Insurance Co. for life
and health insurance versus American
United Insurance Co. for car insurance.34
[B] Requirement
of Likely Dilution
Case law under
the state dilution statutes recognized two forms of dilution:
1. The
blurring of a mark’s product identification, which is defined as diminution in
uniqueness of the mark,35 and
2. The
tarnishment of the affirmative associations a mark has come to convey.36
Blurring the Identity of a Mark: The blurring theory of dilution requires
proof that the product-evoking quality of plaintiff’s mark is likely to be
weakened by defendant’s mark.
In the Sally Gee case, the Second Circuit
applied the New York state statute and found that Sally Lee did not blur the identity of Sally Gee—apparently because of the
difference in marks.
Sophisticated retailers and discerning
consumers of women’s apparel are unlikely to have blurred vision causing them
to see “Sally Gee” upon viewing a Sally Lee label.37
The Second
Circuit also rejected a claim of blurring under the New York state statute in
the Lexis case. The court found
there was no dilution of Lexis
for computer legal research services by Lexus
for automobiles because of different spelling and pronunciation and the lack of
significant overlap between attorneys and automobile purchasers.38
In the Seventh
Circuit Polaroid case, the court
found defendant’s mark Polaraid
for installation of refrigeration and heating systems likely to blur
plaintiff’s mark Polaroid for
optical devices and cameras. In applying the Illinois dilution statute, the
court noted:
No longer would the word “Polaroid” call
immediately to mind the highly regarded cameras made by the Polaroid
Corporation. The mental image would be blurred, at least to anyone who had
dealt with Polaroid or seen its ads, by recollection of Polaraid’s
refrigeration services.39
The special
nature of parody uses makes it difficult to find blurring. For example, in the
Hormel Spam case, the obvious parody
nature of the Muppet Spa’am King of the Wild Boars character was not likely to
weaken the association between plaintiff’s mark Spam and its meat product.40 And even where blurring is found,
dilution protection may not be granted to parody uses on First Amendment
grounds.41
Tarnishment: A trademark may be tarnished when it is
“linked to products of shoddy quality, or is portrayed in an unwholesome or
unsavory context,” with the result that “the public will associate the lack of
quality or lack of prestige in the defendant’s goods with the plaintiff’s
unrelated goods.”42
Tarnishment was
not found in Sally Gee because
defendant’s clothing was higher in price and higher in quality than plaintiff’s
clothing. A tarnishment argument was rejected in the Hormel Spam case because
the Spa’am character from the Muppet
Treasure Island movie did not convey a negative association to the Hormel Spam meat product. The court observed
that Spam was already the butt of
many jokes.43
Tarnishment,
however, has been successfully established in a number of other cases. In Steinway, the piano people invoked
California’s dilution statute to enjoin use of the name Stein-Way for beer can holders. The court stated:
Defendants’ use of the designation Stein-Way in connection with its
business and its products, unless enjoined, will associate or tend to associate
plaintiff’s high quality pianos and plaintiff’s business and cultural
activities with defendants’ inexpensive, mass-produced products and with the
retail liquor stores, supermarkets and similar merchandising concerns which
sell defendants’ products. Such association will inevitably tarnish plaintiff’s
reputation and image with the public of manufacturing and/or sponsoring only
products and activities of taste, quality and distinction.44
In the early
years, courts frequently found tarnishment where plaintiff’s mark was parodied
in the context of obscene, illegal, or unsavory activity. For example, in the Pillsbury case, defendant’s magazine was
enjoined under Georgia law from using the Pillsbury
Doughboy and Doughgirl in
lewd poses.45
Starting in the
late 1980s, courts began to reject dilution claims where the parody was a
“noncommercial” use, for example, contained in a literary context. The 1987 L.L. Bean case dealt with the L.L. Beam
sex catalog parody of the L.L. Bean catalog. The First Circuit held the
magazine parody noncommercial and protected by the First Amendment right to
free speech.46 The L.L.
Beam use was considered noncommercial in part because it was labeled as
“humor” and “parody” in the magazine’s table of contents and neither the
article nor L.L. Bean’s mark was featured on the magazine’s cover.47
§
9:2.4 The Role of Intent
Bad faith is not
a prerequisite for finding dilution under state statutes. Bad faith is,
however, a relevant factor, just as it is in any action seeking equitable
relief.48
§
9:2.5 Remedies
The New York
statute is again typical of the early state statutes in specifically providing
that dilution “shall be a ground for injunctive relief.”49
The scope of the injunction, however, is in doubt. Some courts refuse to issue
an injunction beyond the state’s borders.50 Other courts maintain that jurisdiction
over the defendant empowers the court to restrain his actions nationwide,
especially where plaintiff’s (and defendant’s) businesses are multistate.51
As to damages,
the state statutes have been taken at face value: the exclusive reference to
injunctive relief means that monetary relief is not available.52
§
9:3 Dilution Under the Federal
Trademark Dilution Act (FTDA)
§
9:3.1 The Movement Toward
National Protection
As acceptance of
the dilution concept grew among courts applying state dilution statutes, trademark
owners began to recognize dilution as a valuable alternative for the protection
of distinctive marks.
The
attractiveness of the dilution solution led to efforts to amend the Lanham Act
to include a federal dilution provision in the Trademark Law Revision Act of
1988. These efforts were initially unsuccessful, possibly because of concern
over use of the provision to stifle noncommercial expressions, for example,
parody, satire, and editorial comment.53
The Federal
Trademark Dilution Act (FTDA) that was finally enacted in 1996 excludes
noncommercial uses such as parody, satire, and editorial expression from its
reach.54
The FTDA adopted
much of its language from state dilution statutes. The major differences are
that the federal law:
1. limits
the dilution claim to famous marks;
2. requires
proof of actual dilution rather than likelihood of dilution;55
3. provides
nationwide injunctive relief;
4. provides
monetary relief in cases of “willful” dilution; and
5. provides
that defendant’s ownership of a federal registration acts as a bar to
plaintiff’s dilution claims based on state statutory or common law.56
§
9:3.2 Purpose of the FTDA
The FTDA is
intended to provide national uniformity by making a dilution claim available
for famous marks regardless of the state where suit is brought and by providing
nationwide injunctive relief:
Presently, the nature and extent of the
remedies against trademark dilution varies from state to state and, therefore,
can provide unpredictable and inadequate results for the trademark owner. The
federal remedy provided in H.R. 1295 against trademark dilution will bring
uniformity and consistency to the protection of famous
marks. . . .57
§
9:3.3 Dilution Defined
The FTDA 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.58
§
9:3.4 Elements of a
Dilution Cause of Action Under the FTDA
The FTDA provides
the following cause of action:
The owner of a famous mark shall be
entitled, subject to the principles of equity and upon such terms as the court
deems reasonable, to an injunction against another person’s commercial use in
commerce of a mark or trade name, if such use begins after the mark has become
famous and causes dilution of the distinctive quality of the famous mark.59
To succeed on a
federal dilution claim, plaintiff must prove that:
(1) its
mark is famous;
(2) defendant
is making commercial use in commerce;
(3) defendant
adopted its mark after plaintiff’s mark had become famous; and
(4) defendant’s
use dilutes the quality of plaintiff’s mark by diminishing the capacity of the
mark to identify and distinguish goods and services.60
[A] “Famous”
Mark Requirement
The FTDA “famous”
mark requirement appears to be a higher standard than the original state
dilution requirement that the mark have a “distinctive quality.” Although some
courts have interpreted “distinctive quality” as requiring an extremely strong
mark, a mark may be strong in the sense of unique and arbitrary without being
famous.61
The Act lists the
following factors to consider in “determining whether a mark is distinctive and
is famous”:
(A) the
degree of inherent or acquired distinctiveness of the mark;
(B) the
duration and extent of use of the mark in connection with the goods or services
with which the mark is used;
(C) the
duration and extent of advertising and publicity of the mark;
(D) the
geographical extent of the trading area in which the mark is used;
(E) the
channels of trade for the goods or services with which the mark is used;
(F) 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;
(G) the
nature and extent of use of the same or similar marks by third parties;
(H) whether
the mark was registered under the Act of March 3, 1881, or the Act of February
20, 1905, or on the principal register.62
There is some
dispute about the meaning of “distinctive” and “famous” as used in the FTDA.
For example, the Second Circuit maintains that the term “distinctive” limits
the categories of famous marks eligible for FTDA protection to inherently
distinctive marks. Other authorities maintain that trademark law has always
recognized distinctive marks as including marks that had acquired
distinctiveness through use.63
Examples of marks
protected under the FTDA include:
The Sporting
News for weekly sports
newspaper diluted by Las Vegas Sporting
News for gambling newspaper;64
Wawa for chain of 500 convenience stores in
five eastern states, in use for ninety years, diluted by the Haha market in Pennsylvania;65
Candyland for children’s game tarnished by “candyland.com”
for website showing sexually explicit pictures;66
The green and
yellow color scheme for
Crayola markers, crayons, and related products likely to be diluted by green
and yellow trade dress on defendant’s markers.67
Marks that did not qualify for FTDA protection include:
Columbia university (mark coexisted with a number
of third party uses);68
Petro truck stop services (inadequate evidence
to show mark was famous);69
Star Market chain of eight supermarkets in only one
state (Hawaii).70
[B] Adoption
After Plaintiff’s Mark Became Famous
Section
1125(c)(1) of title 15 of the U.S.C. requires that defendant’s use “begins
after the mark has become famous.”71
In Enterprise Rent-A-Car, the Federal
Circuit held that prior use of a mark even in a limited geographic area defeats
an opposition to registration based on dilution under 15 U.S.C. § 1063.
The court noted that the Lanham Act provision governing opposition, 15 U.S.C.
§ 1063, explicitly incorporates the definition of dilution from the FTDA.72
[C] Commercial
Use in Commerce
The FTDA enables
trademark owners to obtain “an injunction against another person’s commercial
use in commerce of a mark.”73 This provision reflects Congress’s
intent that the FTDA:
[incorporate] the concept of “commercial”
speech from the “commercial speech” doctrine, and [proscribe] dilution actions
that seek to enjoin use of famous marks in “non-commercial” uses (such as
consumer product reviews).74
[D] Dilution
of the Distinctive Quality of Plaintiff’s Famous Mark
Cases under the
FTDA, like cases under the state statutes, have recognized that dilution
generally occurs in one of two ways: blurring or tarnishment.75
The issue before the Supreme Court in Victoria’s
Secret was whether the statutory language “causes dilution of the distinctive
quality of the famous mark” required a showing of actual dilution (actual harm)
or only a likelihood of dilution.
§
9:3.5 Actual Harm
Requirement
[A] The
Split in the Circuits
Many authorities
had assumed that since the FTDA was enacted to provide a national dilution
remedy along the lines of the state statutes, the FTDA required only likelihood
of dilution—just like the states. Other authorities disagreed. They pointed out
that while the state statutes prohibit use of trademarks where there is a
“likelihood . . . of dilution,” the federal statute prohibits use
that “causes dilution.”
Based on this
difference in statutory language, the Fourth Circuit in Ringling Bros. v. Utah held that proof of actual harm was required
to establish dilution of a famous mark.76 According to Ringling, plaintiff must prove that:
(1) a defendant has made use of a junior
mark sufficiently similar to the famous mark to evoke in a relevant universe of
consumers a mental association of the two that (2) has caused (3) actual
economic harm to the famous mark’s economic value by lessening its former
selling power as an advertising agent for its goods or services.77
The Second
Circuit in Nabisco v. PF Brands
rejected the Fourth Circuit requirement of actual harm. Judge Leval noted that:
• the
Fourth Circuit interpretation would defeat the intent of the statute, which is
to provide for an injunction to prevent the harm before it occurs;
• the
Fourth Circuit position would subject the senior user to uncompensable injury;
• it
would be impossible to obtain declaratory relief before a junior user launched
its product;
• consumer
surveys used to show actual harm are “quite subject to manipulation and
. . . therefore not highly reliable”; and
• circumstantial
evidence can be used to justify the inference of injury in a dilution case,
just as it has long been used to establish infringement.78
The Sixth and
Seventh Circuits lined up with the Second Circuit Nabisco decision, holding that actual harm is not required.79
The Fifth Circuit in Westchester Media agreed
with the Fourth Circuit’s Ringling
decision.80
This split in the
circuits was resolved by the Supreme Court in the March 2003 Victoria’s Secret decision.81
[B] The
Supreme Court Speaks:
Victor/Victoria—A Play in Three Acts
Prologue: Defendant Victor Moseley and his wife
opened a lingerie and adult novelties store under the name Victor’s Secret.82
The store was located in a strip mall in Elizabethtown, Kentucky. An army
officer at nearby Fort Knox received a Victor’s Secret flyer and complained to
Victoria’s Secret, the nationwide lingerie retailer. The officer noted “what he
perceived to be an attempt to use a reputable company’s trademark to promote
the sale of unwholesome and tawdry merchandise.”83 Victoria’s Secret dispatched a letter of
protest, and the Moseleys responded by changing the store name to Victor’s Little Secret. Victoria’s
Secret brought suit, alleging likely confusion and dilution.
Act I:
The district
court denied Victoria’s Secret’s motion for summary judgment on its confusion
claim. However, the court granted summary judgment on dilution, finding that Victor’s Little Secret was likely to
blur and tarnish Victoria’s Secret.84
Act II: The Sixth Circuit affirmed the district
court’s ruling that plaintiff had established likelihood of dilution under the
FTDA.85 In doing so, the Sixth Circuit relied on the earlier Sixth
Circuit Kellogg decision holding that
actual harm was not required.86
Act III: The Supreme Court granted certiorari to
answer the question whether “objective proof of actual injury to the economic
value of a famous mark (as opposed to a presumption of harm arising from a
subjective ‘likelihood of dilution’ standard) is a requisite for relief under
the FTDA.”87
[C] Supreme
Court’s View of Dilution: Actual Harm Is Required
Proof of Actual Harm (Actual Dilution) Is
Required A unanimous Supreme Court held that actual harm is required
under the FTDA. The language “causes dilution” in 15 U.S.C. § 1125(c)(1)
(contrasted with the earlier state statutes, which protect against likely
dilution) requires this result.88
The Court found
that “evidence in the present record is not sufficient to support the summary
judgment on the dilution count” and remanded for further proceedings.89
Proof of Economic Loss Is Not Required
While plaintiff must
prove actual harm (actual dilution), this “does not mean that the consequences
of dilution, such as an actual loss of sales or profits, must also be proved.”90
The Supreme Court disagreed with the Fourth Circuit in Ringling Bros. to the extent that Ringling suggested that consequences of dilution must be
established.91
[D] Identical
Versus Nonidentical Marks:
A Distinction with a Difference
The Court
acknowledged that dilution was not limited to identical marks. “Even if the
legislative history might lend some support to such a contention, it surely is
not compelled by the statutory text.”92
Proving Actual Harm Where Marks Are
Identical: While dilution is not limited to identical marks, identity
does make a difference with respect to proof. Where the junior and senior marks
are identical, those circumstances alone may be proof of actual dilution:
[D]irect evidence of dilution such as
consumer surveys will not be necessary if actual dilution can reliably be
proven through circumstantial evidence—the obvious case is one where the junior
and senior marks are identical.93
Proving Actual Harm Where Marks Are Not
Identical: Where the
parties’ marks are not identical, plaintiff must show some impact on its mark,
for example, that defendant’s use will affect the consumer’s conception of
plaintiff’s mark.94 Mental association is not enough:
[T]he mere fact that consumers mentally
associate the junior user’s mark with a famous mark is not sufficient to
establish actionable dilution. . . . [S]uch mental association
will not necessarily reduce the capacity of the famous mark to identify the
goods of its owner, the statutory requirement for dilution under the FTDA.95
The Court pointed
to the Ringling Bros. case as an
example. It was not enough that the Utah Tourism Board’s slogan “The Greatest
Snow on Earth” triggered an association with the Ringling Bros. Circus slogan
“The Greatest Show on Earth.” Plaintiff must show that consumers will associate
the Ringling Bros. slogan with skiing or snow sports or will associate it less
strongly or exclusively with the circus.
Applying this
standard to the facts in Victoria’s
Secret, the Court noted that the “army officer who saw the advertisement of
the opening of a store named ‘Victor’s Secret’ did make the mental association
with ‘Victoria’s Secret.’” However, “he did not therefore form any different
impression of the store that his wife and daughter patronized.”96
The Court also
noted that Victoria’s Secret’s marketing expert “had nothing to say about the
impact of petitioner’s name (Victor’s Little Secret) on the strength of
respondents’ [Victoria’s Secret] mark.”97
As to consumer
surveys, the Court acknowledged the argument that surveys may be difficult to
construct and subject to reliability questions. However, difficulties of proof
are not a reason to do away with plaintiff’s burden of proving actual harm:
Whatever difficulties of proof may be
entailed, they are not an acceptable reason for dispensing with proof of an
essential element of a statutory violation.98
Thus, a party
claiming dilution by a similar mark should consider surveys, testimony of
marketing experts, and testimony of consumers as possible evidence of the
impact of defendant’s use on the consumer’s conception of plaintiff’s mark.
[E] What
Else the Court Said
Justice Kennedy’s Concurrence: In his concurring opinion, Justice
Kennedy made several points that may assist trademark owners in future dilution
actions:
If a mark will erode or lessen the power
of the famous mark to give customers the assurance of quality and full
satisfaction they have in knowing they have purchased goods bearing the famous
mark, the elements of dilution may be established.99
Diminishment of the famous mark’s
capacity [to identify and distinguish plaintiff’s goods] can be shown by the
probable consequences flowing from use or adoption of the competing mark.100
A holder of a famous mark . . .
should not be forced to wait until the damage is done and the distinctiveness
of the mark has been eroded.101
The Court’s opinion does not foreclose
injunctive relief if respondents on remand present sufficient evidence of
either blurring or tarnishment.102
The Court’s Comment on Tarnishment: The Supreme Court questioned in Part III
of the opinion whether tarnishment “is actually embraced by the statutory text”
of the FTDA. While this comment has caused some practitioners to raise their
eyebrows, the Court also noted that (1) the concept of tarnishment “was
prominent in litigation brought under state antidilution statutes” and (2) the
legislative history described the purpose of the FTDA as “‘to protect famous
trademarks from subsequent uses that blur the distinctiveness of the mark or
tarnish or disparage it.’”103
§
9:3.6 Remedies
The scope of
injunctive relief under the FTDA is nationwide.104 In addition, in cases of “willful”
dilution, the remedies of profits, damages, attorneys’ fees, and even enhanced
damages under section 35 of the Lanham Act are available to a prevailing party.
The FTDA, like the
state dilution statutes, does not specify bad-faith intent as a requirement for
injunctive relief. However, “willful dilution” is required for monetary awards.105
§ 9:3.7 Defenses
[A] Federal
Registration Defense
The FTDA provides
that ownership of a valid federal registration on the principal register shall
bar an action against that mark under a state statute or common law.106
[B] Fair
Use and First Amendment Defenses Under Section 43(c)
Section 43(c)(4)
provides:
The following shall not be actionable
under this section:
(A) 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.
(B) Noncommercial
use of a mark.
(C) All
forms of news reporting and news commentary.107
The legislative
history of section 43(c) indicates that Congress was concerned primarily with
the effect the statute might have on the media:
The proposal adequately addresses
legitimate first amendment concerns espoused by the broadcasting industry and
the media. The bill will not prohibit or threaten noncommercial expression,
such as parody, satire, editorial and other forms of expression that are not a
part of a commercial transaction. The bill includes specific language exempting
from liability the “fair use” of a mark in the context of comparative
commercial advertising or promotion.108
Examples of uses
found to be noncommercial under the FTDA include:
“Barbie Girl” in song title and lyrics
lampooning Barbie Doll image.109
Use of TaftQuack duck resembling AFLAC
insurance company duck to criticize politician Robert Taft in TV political ad.110
In the Mattel case, the Ninth Circuit held that
the use of the Barbie name in the
lyrics and title of the song “Barbie Girl” constituted dilution under the FTDA
but was a protected noncommercial use. While the Barbie name was used to sell copies of the song, the song
“also lampoons the Barbie image and comments humorously on the cultural values
[defendant] claims she represents.”111 Because the commercial purpose of “Barbie
Girl” was “inextricably entwined with expressive elements,” defendant’s use was
not purely commercial speech and was therefore fully protected by the First
Amendment.112
[C] Fair
Use Under Section 33(b)(4)
In addition to
the fair use provision under the FTDA, the Lanham Act already has a fair use
provision. Section 33(b)(4) permits the use of another party’s trademark “which
is descriptive of and used fairly and in good faith only to describe the goods
or services of such party.”113
Even prior to
enactment of the FTDA, courts found that a descriptive use of plaintiff’s mark
does not constitute dilution.114
§
9:4 Dilution in Patent and
Trademark Office Proceedings
The Lanham Act
was amended on August 5, 1999, to make it clear that dilution is a ground for opposition
and/or cancellation of a registration in a PTO proceeding.115
The amendment applies to applications for registration filed on or after
January 16, 1996.
In the first
opposition proceeding dealing with the issue of dilution, the Trademark Trial and
Appeal Board (TTAB) found that opposer’s Toro
mark for power landscaping tools was not diluted by applicant’s intent to use
mark ToroMR for computer disk
drive components. The TTAB required strict proof of a mark’s fame and noted
that “unlike in likelihood of confusion cases, we will not resolve doubts in
favor of the party claiming dilution.”116
The Federal
Circuit Enterprise Rent-A-Car case
held that there can be no opposition based on dilution where the allegedly
famous mark did not achieve fame prior to any use by the accused infringer. The
Enterprise Court also held that
dilution under state statutes was not a ground for opposition.117
Likelihood
of dilution, not actual dilution, is the standard under the Lanham Act sections
governing oppositions and cancellations. As the TTAB pointed out in Nasdaq, the statutory language
contemplates prospective relief.117.1
§
9:5 The Continuing Evolution of
the Species
Even though
the Supreme Court resolved the issue of whether dilution under the FTDA
requires proof of actual harm (it does), many uncertainties remain about the
scope of dilution law. For example:
• Should
marks that are famous only in particular regions or in particular channels of
commerce (niche marks) qualify for dilution protection?
• Are
descriptive marks that have acquired distinctiveness eligible for dilution
protection under the FTDA?
• Is
it appropriate to determine dilution by reference to a multifactor test similar
to that used in evaluating likelihood of confusion?
• Should
product design trade dress be eligible for dilution protection?
• Can
the FTDA be applied retroactively to enjoin a diluting use that began before
the FTDA was enacted?
• What
will be the impact of the Supreme Court observation that it is questionable
whether tarnishment is embraced in the FTDA statutory text?
Below are some differing views on these issues.
§
9:5.1 Protection of Niche
Marks
A number of
decisions protect marks that are famous in a niche, for example, a particular
product line. For example, the Third Circuit Times Mirror case affirmed an injunction under the FTDA where The Sporting News had been found to be
famous within the sports magazine niche.118
But not all
authorities believe that the FTDA should protect niche market fame. The
argument is that dilution was designed for noncompetitive products; where the
diluting use occurs in the same niche market, the products are competitive and
the trademark infringement cause of action should be sufficient:
[T]he unauthorized use of a mark in the
same or a similar market is precisely what good old-fashioned infringement
principles have traditionally been there to remedy once actual confusion or
likelihood of confusion has been shown, and there is simply no need for
dilution principles.119
§
9:5.2 Meaning of “Distinctive
and Famous”
Section 43(c)
lists eight nonexhaustive factors to consider in determining whether a mark is
distinctive and is famous so as to merit protection under the FTDA.
The factors are
clear enough.120 But just what the statute means by “distinctive”
and “famous” in this context is not so clear. Questions relating to the
interpretation of this phrase include the following.
[A] Are
“Distinctive” and “Famous” Two Separate Requirements?
In Nabisco, the Second Circuit held that
distinctiveness is an element of a dilution claim independent from the fame
element.121 In Times
Mirror, the Third Circuit expressly rejected the Nabisco view. The Third Circuit noted that a test for
distinctiveness separate from the test for fame would be
“inconsistent with the
language and construction of the trademark statute.”122
Professor McCarthy agrees. He considers distinctiveness a synonym for fame.123
In Victoria’s Secret, the Supreme Court
stated in a footnote that: “It is quite clear that the statute intends distinctiveness,
in addition to fame, as a separate element.”124 However, this statement was dicta and
the Court did not address the dispute surrounding the meaning of “distinctive”
and “famous.”
[B] Does
the FTDA Protect Marks That Have Acquired Distinctiveness Through Secondary
Meaning?
According to the
Second Circuit, “distinctive” means inherent distinctiveness, that is, the mark
must have been distinctive at the outset as opposed to having acquired
distinctiveness through use. Writing for the court in the Nabisco case, Judge Leval concluded that a famous mark that has
acquired secondary meaning is not distinctive as that term is used in the FTDA,
and is not entitled to protection.125
Other courts have
allowed dilution protection where a mark has acquired distinctiveness through
secondary meaning.126 After all, the first of the eight
“distinctive and famous” factors refers to the “degree of inherent or acquired
distinctiveness of the mark.” And as Professor McCarthy points out,
“distinctive” in trademark law has traditionally included distinctiveness
acquired through secondary meaning.127
It should also be
noted that the Second Circuit requirement of inherent distinctiveness strips
federal dilution protection from a host of famous marks that were initially descriptive,
for example, Coca-Cola, McDonalds and DuPont.128 DuPont
shoes was given as an example of a diluting use in the legislative histories
for both the FTDA and the New York statute.129
§
9:5.3 Role of Dilution Factors
Some courts analyze
dilution by applying a series of factors. Judge Sweet in his concurring opinion
in the Second Circuit Mead decision considered the following
factors in evaluating dilution under the New York state statute: similarity of
marks and products, consumer sophistication, predatory intent, and renown of
the two marks.130
Several circuits
have criticized the Mead factors as
inappropriate for assessing a dilution claim under the FTDA. The First Circuit
in the Lund case noted that the Mead factors “work directly contrary to
the intent of a law whose primary purpose was to apply in cases of widely
differing goods, that is, Kodak pianos and Kodak
film”131 The Fourth Circuit in Ringling
Bros. said that the Mead
“analysis simply is not appropriate for assessing a claim under the federal
Act.”132 And the Seventh Circuit observed in Eli Lilly that “several of these factors are more suited to an
inquiry into the likelihood of confusion.”133
Even a later
Second Circuit decision had some critical comment on the earlier Second Circuit
Mead factors. In Nabisco, Judge Leval pronounced the Mead factors as too restrictive and applied a more elaborate
multifactor analysis:
1. distinctiveness;
2. mark
similarity;
3. product
proximity and likelihood of bridging the gap;
4. interrelationship
of 1–3;
5. shared
consumers and geographical limitations;
6. consumer
sophistication;
7. actual
confusion;
8. adjectival
quality of the junior use;
9. harm
to the junior user and delay by the senior user; and
10. the
senior user’s laxity in protecting the mark.134
The Third Circuit
in Times Mirror advocated considering
both the Mead and Nabisco factors.135
The Supreme Court
in Victoria’s Secret alluded to the Nabisco factors in its discussion of the
Sixth Circuit’s disposition below.136 But the appropriateness of a factor
analysis or the substance of specific factors was not before the Court.
Keep posted for
more input about the role of a multifactor approach in evaluating dilution.
§
9:5.4 Protection of
Product Design Trade Dress
A number of
decisions have applied dilution statutes to protect trade dress.137
Moreover, many forms of trade dress are, according to the Supreme Court, to be
treated just like other trademarks.138 The Restatement
of Unfair Competition states that the dilution statutes are “generally applicable
to slogans, trade dress, and other symbols that qualify for protection as a
trademark.”139 However, the Restatement goes on to note that the protection of product design
from nonconfusing uses under state dilution law raises special problems because
of the preemptive effect of the federal copyright and patent laws. The Restatement notes that a definitive
statement of the law is not possible from existing cases.
While the FTDA is
not subject to state law preemption problems, it may be argued that the Act
should not grant product design protection that would conflict with patent law
policy.140 However, such a conflict is usually avoided where the
product design is nonfunctional. For example, the Act was applied to protect
product design in the Sunbeam case.
The court found the overall look and shape of the Sunbeam stand mixer
nonfunctional and sufficiently distinctive to qualify as a “famous mark”
subject to protection under the FTDA for purposes of granting preliminary
relief.141
§
9:5.5 Dilution and Retroactivity:
It’s Not Over Till the Highest Court Sings
The FTDA
became effective on January 16, 1996. Like other civil statutes, it does not
operate retroactively absent a clear Congressional statement that it should.
The question is: What is a retroactive operation? There is no disagreement that
the recovery of damages for pre-statute conduct would have impermissible
retroactive effect. There is disagreement, however, as to whether an injunction
against continued use of a mark can constitute impermissible retroactive effect
where the mark has been adopted before enactment of the statute.
A number of
cases have concluded that the statute could not be applied in a case stemming
from pre-enactment events and conduct.142 The Circuit
City decision (followed by several other district court decisions) reasoned
that an injunction barring future use would deprive defendant of his commercial
investment, which was lawful at the time.
The Circuit City court acknowledged the
Supreme Court statement in Landgraf
that when the intervening statute authorizes prospective relief, its
application is not retroactive.143
But, according to Circuit City, this was dicta that spoke
solely to cases where the relevant conduct was already illegal before enactment
of the statute. In that situation, the statute merely provides a new remedy.
Circuit City was
first challenged by the Fuente Cigar
case. Fuente faulted Circuit City for its concern over the
protection of commercial expectation.144 Fuente
points to the Landgraf statement that
“a statute does not operate ‘retroactively’ merely because it . . .
upsets expectations based on prior law.”145
The Fuente reasoning was adopted by the
Eighth Circuit in the Viacom case,
reversing the district court’s refusal to apply the federal dilution statute to
enjoin a mark adopted before the statute’s enactment. The Eighth Circuit noted
that if defendant’s pre-statute investment were a problem, it could be taken
into account under the statutory provision that required injunctions to be
granted under principles of equity.146
It looks like the
more recent cases are following Viacom,
but we have yet to hear the highest Court sing.147
§
9:5.6 Role of Tarnishment
In Victoria’s Secret, the Supreme Court
noted that while the concept of tarnishment “was prominent in litigation
brought under state antidilution statutes” and while tarnishment was mentioned
in the FTDA legislative history, “[w]hether it is actually embraced by the
statutory text, however, is a different matter.” The Court stated:
Indeed, the contrast between the state
statutes, which expressly refer to both “injury to business reputation” and to
“dilution of the distinctive quality of a trade name or trademark,” and the
federal statute which refers only to the latter, arguably supports a narrower reading
of the FTDA.148
It remains to be
seen to what extent the Court’s comments will be picked up by lower courts.
However, anyone arguing that the FTDA does not cover dilution based on
tarnishment will have to confront the legislative history. As noted in Victoria’s Secret, Congress specifically
stated that the purpose of the FTDA was “to protect famous trademarks from
subsequent uses that blur the distinctiveness of the mark or tarnish or
disparage it.”149
1. See Two Pesos, Inc. v. Taco Cabana,
Inc., 505 U.S. 763, 773, reh’g denied,
505 U.S. 1244 (1992).
2. See Moseley v. V Secret Catalogue, Inc.,
123 S. Ct. 1115, 1122–23 (2003) (“Victoria’s
Secret”). See appendix 21,
illustration 46.
3. Allied
Maint. Corp. v. Allied Mech. Trades, Inc., 42 N.Y.2d 538, 544, 369 N.E.2d 1162,
399 N.Y.S.2d 628 (1977).
4. Mass. Gen. Laws ch. 110B, § 12
(2003).
5. See section 9:2.2 infra for the text of a typical state dilution statute.
6. See sections 9:2.2 and 9:2.3, infra.
7. H.R. Rep. No. 374, 104th Cong., 1st
Sess. pt. 2 (“purpose and summary”) (1995).
8. See, e.g.,
Hasbro, Inc. v. Clue Computing, Inc., 232 F.3d 1 (1st Cir. 2000) (Clue for board game not diluted by
“clue.com” domain name for Clue Computing’s computer consulting website; mark
is not famous because it “is a common word that numerous third parties use”).
9. Moseley
v. V Secret Catalogue, 535 U.S. 985 (2002).
10. Victoria’s Secret, 123 S. Ct. at 1124–25
(citing Ringling Bros.-Barnum & Bailey Combined Shows, Inc. v. Utah Div. of
Travel Dev., 170 F.3d 449, 460–65 (4th Cir. 1999)).
11. Victoria’s Secret, 123 S. Ct. at 1124.
12. Mortellito
v. Nina of Cal., Inc., 335 F. Supp. 1288, 1296 (S.D.N.Y. 1972).
13. Ameritech,
Inc. v. Am. Info. Techs. Corp., 811 F.2d 960, 965 (6th Cir. 1987), cited in Victoria’s Secret, 123 S. Ct. 1115,
1120. See also 3 R. Callmann, The Law
of Unfair Competition, Trademarks, and Monopolies § 84.2, at 954–55
(2d ed. 1969).
14. N.Y. Gen. Bus. Law § 360-l (2003).
15. Berlitz
Schs. of Languages of Am., Inc. v. Everest House, 619 F.2d 211, 215 (2d Cir.
1980); HMH Publ’g Co. v. Lambert, 482 F.2d 595, 599 (9th Cir. 1973);
Carter-Wallace, Inc. v. Procter & Gamble Co., 434 F.2d 794, 803 (9th Cir.
1970).
16. Coca-Cola
Co. v. Gemini Rising, Inc., 346 F. Supp. 1183 (S.D.N.Y. 1972).
17. Girl
Scouts of United States v. Personality Posters Mfg. Co., 304 F. Supp. 1228
(S.D.N.Y. 1969).
18. Tetley,
Inc. v. Topps Chewing Gum, Inc., 556 F. Supp. 785 (E.D.N.Y. 1983).
19. Pillsbury
Co. v. Milky Way Prods., Inc., 215 U.S.P.Q. 124 (N.D. Ga. 1981).
20. Sally
Gee, Inc. v. Myra Hogan, Inc., 699 F.2d 621, 624 (2d Cir. 1983).
21. Dallas
Cowboys Cheerleaders, Inc. v. Pussycat Cinema, Ltd., 604 F.2d 200, 205 n.8 (2d
Cir. 1979); Mushroom Makers, Inc. v. R.G. Barry Corp., 580 F.2d 44, 49 (2d Cir.
1978), cert. denied, 439 U.S. 1116
(1979).
22. Sally
Gee, Inc. v. Myra Hogan, Inc., 699 F.2d 621, 625 (2d Cir. 1983).
23. See appendix 20 for list of states organized by type of
dilution statute.
24. Note, Dilution:
Trademark Infringement or Will-o’-Wisp? 77 Harv. L. Rev. 520, 530 (1964). These examples of famous
diluting marks were given in the legislative history of the New York statute:
DuPont shoes, Buick aspirin tablets, Schlitz varnish, Kodak pianos, and Bulova
gowns. 1954 N.Y. Legis. Ann. 49.
25. Restatement (Third) of Unfair Competition
§ 25 cmt. c at 267 (1995).
26. Allied
Maint. Corp. v. Allied Mech. Trades, Inc., 42 N.Y.2d 538, 545– 46, 369 N.E.2d
1162 (1977) (over 300 uses of Allied for companies in the New York telephone
directory precluded a finding of distinctiveness).
27. Original
Appalachian Artworks, Inc. v. Topps Chewing Gum, Inc., 642 F. Supp. 1031 (N.D.
Ga. 1986).
28. Am.
Express Co. v. Vibra Approved Labs. Corp., 10 U.S.P.Q.2d 2006 (S.D.N.Y. 1989).
29. Coca-Cola
Co. v. Alma-Leo U.S.A., Inc., 719 F. Supp. 725 (N.D. Ill. 1989) (dilution of
Coca-Cola bottle under Illinois statute).
30. Deere
& Co. v. MTD Prods., Inc., 41 F.3d 39 (2d Cir. 1994).
31. Estee
Lauder, Inc. v. Cinnabar 2000 Haircutters, Inc., 218 U.S.P.Q. 191 (S.D.N.Y.), aff’d mem., 714 F.2d 112 (2d Cir. 1982).
32. Cmty.
Fed. Sav. & Loan Ass’n v. Orondorff, 678 F.2d 1034 (11th Cir. 1982).
33. Wedgwood
Homes, Inc., v. Lund, 221 U.S.P.Q. 174 (Or. Ct. App. 1982), aff’d, 659 P.2d 377 (Or. 1983)
(protection for Wedgwood on real
estate granted because of reputation in local Portland metropolitan area,
despite argument that Wedgwood
was associated with the well-known china on the national level).
34. Am.
United Life Ins. Co. v. Am. United Ins. Co., 731 F. Supp. 480 (S.D. Fla. 1990).
35. Exxon
Corp. v. Oxxford Clothes, Inc., 109 F.3d 1070, 1081 (5th Cir.), cert. denied, 522 U.S. 915 (1997).
36. Sally
Gee, Inc. v. Myra Hogan, Inc., 699 F.2d 621, 624–25 (2d Cir. 1983).
37. Id. at 626.
38. Mead
Data Ctr., Inc. v. Toyota Motor Sales, Inc., 875 F.2d 1026 (2d Cir. 1989).
39. Polaroid
Corp. v. Polaraid, Inc., 319 F.2d 830, 836 (7th Cir. 1963). See also
Hyatt Corp. v. Hyatt Legal Servs., 736 F.2d 1153 (7th Cir. 1984) (court found a
likelihood of success on plaintiff’s claim that Hyatt for legal services blurred Hyatt for hotels).
40. Hormel
Foods Corp. v. Jim Henson Prods., Inc., 73 F.3d 497, 506 (2d Cir. 1996)
(applying New York state statute).
41. See discussion of First Amendment as a
defense to dilution under the federal Act at section 9:3.7[C] infra. See also, infra, section 12:1.3, “Parody.”
42. Deere
& Co. v. MTD Prods., Inc., 41 F.3d 39, 43 (2d Cir. 1994).
43. Hormel
Foods Corp. v. Jim Henson Prods., Inc., 73 F.3d 497 (2d Cir. 1996).
44. Steinway
& Sons v. Robert Demars & Friends, 210 U.S.P.Q. 954, 961 (C.D. Cal.
1981).
45. Pillsbury
Co. v. Milky Way Prods., Inc., 215 U.S.P.Q. 124 (N.D. Ga. 1981); see also
Hasbro, Inc. v. Internet Entm’t Group Ltd., 40 U.S.P.Q.2d 1479 (W.D. Wash.
1996) (Candyland children’s game tarnished by “candyland.com” for website
showing sexually explicit pictures); Polo Ralph Lauren L.P. v. Schuman, 46
U.S.P.Q.2d 1046 (S.D. Tex. 1998) (Ralph Lauren mark Polo tarnished by Polo for
adult entertainment business).
46. L.L.
Bean, Inc. v. Drake Publishers, Inc., 811 F.2d 26, 33 (1st Cir.) (application
of Maine state dilution statute to enjoin noncommercial parody found
unconstitutional), cert. denied, 483
U.S. 1013 (1987).
47. 811
F.2d at 32. Cf. Mut. of Omaha Ins.
Co. v. Novak, 836 F.2d 397, 403 n.9 (8th Cir. 1987) (distinguishing
noncommercial use in L.L.Bean from defendant Novak’s commercial use of Mutant of Omaha on T‑shirts,
caps, buttons and mugs protesting nuclear arms; court found likelihood of
confusion with plaintiff’s mark Mutual
of Omaha).
48. Sally
Gee, Inc. v. Myra Hogan, Inc., 699 F.2d 621, 626 (2d Cir. 1983).
49. N.Y. Gen. Bus. Law § 360-l (2003).
50. Deere
& Co. v. MTD Prods., Inc., 41 F.3d 39, 46–47 (2d Cir. 1994).
51. Hyatt
Corp. v. Hyatt Legal Servs., 736 F.2d 1153, 1158 (7th Cir. 1984) (remanding
case to district court and suggesting issuance of nationwide injunction). On
remand, although the district court “found the strong possibility of a
constitutional infirmity in a nationwide injunction,” it issued such an
injunction at the Seventh Circuit’s request. Hyatt Corp. v. Hyatt Legal Servs.,
610 F. Supp. 381, 382, 385–86 (N.D. Ill. 1985).
52. Restatement (Third) of Unfair Competition
§ 36 cmt. a at 378 (1995).
53. See H.R.
Rep. No. 100-1028, 100th Cong., 2d Sess. (1988).
54. 15
U.S.C. § 1125(c)(4).
55. Moseley
v. V Secret Catalogue, Inc., 123 S. Ct. 1115 (2003). See infra section 9:3.5.
56. 15
U.S.C. § 1125(c).
57. H.R. Rep. No. 104-374, at 3 (1995).
58. 15
U.S.C. § 1127.
59. 15
U.S.C. § 1125(c)(1).
60. See 15 U.S.C. § 1125(c); Pinehurst,
Inc. v. Wick, 256 F. Supp. 2d 424 (M.D.N.C. 2003). See also Westchester
Media v. PRL USA Holdings, Inc., 214 F.3d 658, 670 (5th Cir. 2000); Times
Mirror Magazines, Inc. v. Las Vegas Sports News, L.L.C., 212 F.3d 157, 163 (3d
Cir. 2000), cert. denied, 531 U.S.
1071 (2001).
61. See supra
section 9:2.3[A] for examples of marks protected under pre-FTDA state statutes.
62. 15
U.S.C. § 1125(c)(1).
63. See infra
section 9:5 for differing views on this and other issues re the scope of
dilution protection.
64. Times Mirror Magazines, Inc. v. Las Vegas Sports News, L.L.C.,
212 F.3d 157 (3d Cir. 2000), cert. denied,
531 U.S. 1071 (2001).
65. Wawa, Inc. v. Haaf, 40 U.S.P.Q.2d 1629 (E.D. Pa. 1996), aff’d mem., 116 F.3d 471 (3d Cir. 1997).
66. Hasbro,
Inc. v. Internet Entm’t Group Ltd., 40 U.S.P.Q.2d 1479 (N.D. Wash. 1996).
67. Binney
& Smith v. Rose Art Indus., 60 U.S.P.Q.2d 2000 (E.D. Pa. 2001) (preliminary
injunction granted).
68. Columbia
Univ. v. Columbia/HCA Healthcare Corp., 964 F. Supp. 733, 749–50 (S.D.N.Y.
1997).
69. Petro
Shopping Ctrs., L.P. v. James River Petroleum, 41 U.S.P.Q.2d 1853 (E.D. Va.
1997), aff’d, 130 F.3d 88 (4th Cir.
1997), cert. denied, 523 U.S. 1095
(1998).
70. Star
Mkts., Ltd. v. Texaco, Inc., 950 F. Supp. 1030 (D. Haw. 1996).
71. See AM Gen. Corp. v. Daimlerchrysler
Corp., 311 F.3d 796 (7th Cir. 2002) (denial of preliminary injunction affirmed
where Daimlerchrysler failed to show its Jeep grille had become famous before
Hummer adopted its grille design, as required by dilution statute).
72. Enter.
Rent-A-Car Co. v. Advantage Rent-A-Car, Inc., 330 F.3d 1333 (Fed. Cir. 2003).
73. 15
U.S.C. § 1125(c)(1).
74. H.R. Rep. No. 104-374 (Nov. 30, 1995).
75. See, e.g.,
Thane Int’l, Inc. v. Trek Bicycle Corp., 305 F.3d 894, 905 (9th Cir. 2002)
(blurring and tarnishment are the two most common forms of dilution); Eli Lilly
& Co. v. Natural Answers, Inc., 233 F.3d 456, 466 (7th Cir. 2000) (two
principal forms of dilution are tarnishing and blurring). But note the Supreme
Court’s comment in Victoria’s Secret
that the FTDA language arguably does not embrace tarnishment. See infra
sections 9:3.5[E] and 9:5.6.
76. Ringling
Bros.-Barnum & Bailey Combined Shows, Inc. v. Utah Div. of Travel Dev., 170
F.3d 449 (4th Cir. 1999), cert. denied,
528 U.S. 923 (1999).
77. Id. at 461.
78. Nabisco,
Inc. v. PF Brands, Inc., 191 F.3d 208, 224 (2d Cir. 1999).
79. Kellogg
Co. v. Exxon Corp., 209 F.3d 562 (6th Cir. 2000); Eli Lilly & Co. v.
Natural Answers, Inc., 233 F.3d 456 (7th Cir. 2000).
80. Westchester
Media v. PRL USA Holdings, Inc., 214 F.3d 658 (5th Cir. 2000).
81. Moseley
v. V Secret Catalogue, Inc., 123 S. Ct. 1115 (2003).
82. Id.
83. Id.
84. V
Secret Catalogue, Inc. v. Moseley, 2000 U.S. Dist. LEXIS 5215 at *15 (W.D. Ky.
Feb. 9, 2000).
85. 259
F.3d 464, 477 (6th Cir. 2001).
86. Id. citing Kellogg Co. v. Exxon Corp.,
209 F.3d 562 (6th Cir. 2000). Kellogg
adopted standards for determining dilution under the FTDA that were enunciated
by the Second Circuit in Nabisco, Inc. v. PF Brands, Inc., 191 F.3d 208 (2d
Cir. 1998).
87. Moseley
v. V Secret Catalogue, 535 U.S. 985 (2002).
88. Moseley
v. V Secret Catalogue, Inc., 123 S. Ct. 1115, 1124 (2003).
89. Id. at 1125.
90. Id. at 1124.
91. Id.
92. Id.
93. Id. at 1125.
94. Id. at 1124–25.
95. Id. at 1124.
96. Id. at 1125.
97. Id.
98. Id.
99. Id. at 1125–26.
100. Id. at 1126.
101. Id.
102. Id.
103. 123 S. Ct. at 1125, citing H.R. Rep. No. 104-374, at 1029 (1995).
Justice Scalia did not join this section of the opinion (Part III). See infra section 9:5.6 for further
discussion of the role of tarnishment in dilution law.
104. 15 U.S.C.
§ 1125(c). Query whether a disclaimer may be an effective remedy to a
dilution claim. See Liquid Glass
Enter. v. Dr. Ing. h.c.F. Porsche AG, 8 F. Supp. 2d 398, 405 n.5 (D.N.J. 1998)
(stating that disclaimer will never remedy dilution because consumer confusion
is irrelevant in establishing a dilution claim; use of Porsche mark and trade
dress in advertising for defendant’s car polish preliminarily enjoined).
105. 15 U.S.C.
§ 1125(c)(3).
106. Id.
107. 15 U.S.C.
§ 1125(c)(4).
108. 141 Cong. Rec. 19,310 (1995).
109. Mattel, Inc. v.
MCA Records, Inc., 296 F.3d 894 (9th Cir. 2002), cert. denied, 123 S. Ct. 993 (2003).
110. Am. Family Life
Ins. Co. v. Hagan, 64 U.S.P.Q.2d 1865 (N.D. Ohio 2002) (no dilution of AFLAC
insurance company quacking duck).
111. Mattel, 296 F.3d at 907.
112. Id. at 906. See infra section
12:1.3[E], “The First Amendment Trump Card.”
113. 15 U.S.C.
§ 1115(b)(4). See infra section 12:2.4, “Fair Use.”
114. Sunmark, Inc. v.
Ocean Spray Cranberries, Inc., 64 F.3d 1055, 1060–61 (7th Cir. 1995); Munters Corp.
v. Matsui Am., Inc., 730 F. Supp. 790, 802 (N.D. Ill. 1989), aff’d, 909 F.2d 250 (7th Cir. 1990); Restatement (Third) of Unfair Competition
§ 25 cmt. i at 272 (1995).
115. Trademark
Amendments Act of 1999, Pub. L. No. 106-43, 113 Stat. 218 (1999).
116. Toro Co. v.
ToroHead, Inc., 61 U.S.P.Q.2d 1164, 1174 (T.T.A.B. 2001).
117. Enter. Rent-A-Car
Co. v. Advantage Rent-A-Car, Inc., 330 F.3d 1333 (Fed. Cir. 2003).
117.1. Nasdaq Stock Mkt., Inc. v. Antarctica S.r.l.,
No. 91121204 (T.T.A.B. June 30, 2003) (noting both that 15 U.S.C.
§ 1052(f) permits Board proceedings to be based on claim that newcomer’s
mark “when used would cause dilution” and also that 15 U.S.C. §§ 1063 and
1064 recite owner’s belief that he “would be” or “will be” damaged by dilution).
118. Times Mirror
Magazines, Inc. v. Las Vegas Sports News, L.L.C., 212 F.3d 157 (3d Cir. 2000), cert. denied, 531 U.S. 1071 (2001);
Advantage Rent-A-Car, Inc. v. Enter. Rent-A-Car Co., 238 F.3d 378, 381 (5th
Cir. 2001) (“We’ll Pick You Up” sufficiently famous within the car rental
industry); Syndicate Sales, Inc. v. Hampshire Paper Corp., 192 F.3d 633 (7th
Cir. 1999) (floral basket design fame sufficient in wholesale and retail
florists market).
119. 4 J. Thomas McCarthy, McCarthy on Trademarks
& Unfair Competition § 24:112.1 at p. 24-246 (4th ed. 2003)
quoting dissent in Times Mirror, 212
F.3d at 174.
120. See supra
section 9:3.4[A], “The ‘Famous’ Mark Requirement.”
121. Nabisco, Inc. v.
PF Brands, Inc., 191 F.3d 208, 216 (2d Cir. 1999) (goldfish-shaped snack food
diluted by similar shape used as part of snack food mix).
122. Times Mirror
Magazines, Inc. v. Las Vegas Sports News, L.L.C., 212 F.3d 157, 166–67 (3d Cir.
2000), cert. denied, 531 U.S. 1071
(2001).
123. 4 J. Thomas McCarthy, McCarthy on Trademarks
& Unfair Competition § 24:91–24:91.1 (4th ed. 2003).
124. Moseley v. V
Secret Catalogue, Inc., 123 S. Ct. 1115, 1121, n.5 (2003).
125. Nabisco, 191 F.3d at 215–16; see also
TCPIP Holding Co. v. Haar Communications, Inc., 244 F.3d 88, 95 (2d Cir. 2001)
(Leval, J.) (a mark must possess a sufficient degree of inherent
distinctiveness to be protectable under the FTDA). The Second Circuit followed TCPIP in N.Y. Stock Exch., Inc. v. N.Y.,
N.Y. Hotel, LLC, 293 F.3d 550, 557–58 (2d Cir. 2002) (affirming summary judgment
of no dilution under the FTDA as to plaintiff’s marks with acquired
distinctiveness; remanding for determination of whether mark consisting of New
York Stock Exchange name combined with architecture façade of the exchange was
inherently distinctive).
126. Times Mirror Magazines, 212 F.3d at 166.
127. 2 J. Thomas McCarthy, McCarthy on Trademarks
& Unfair Competition § 11:2 (4th ed. 2003) (citing Two Pesos,
Inc. v. Taco Cabana, Inc., 505 U.S. 763, 769 (1992)). See also Wal-Mart Stores,
Inc. v. Samara Bros., Inc., 529 U.S. 205, 210–11 (2000).
128. Surnames such as McDonalds and DuPont cannot be protected unless they have acquired
distinctiveness. 15 U.S.C. § 1052(e)(3). See supra section 2:3.1,
“Personal Names.”
129. H.R. Rep. No. 104-374, at 1030 (1995); 1954 N.Y.
Legis. Ann. 49.
130. Mead Data Ctr.,
Inc. v. Toyota Motor Sales, Inc., 875 F.2d 1026, 1035 (2d Cir. 1989); see also
Times Mirror Magazines, Inc. v. Las Vegas Sports News, L.L.C., 212 F.3d 157,
168–69 (3d Cir. 2000), cert. denied,
531 U.S. 1071 (2001) (approving use of Judge Sweet’s Mead factors).
131. I.P. Lund Trading
ApS v. Kohler Co., 163 F.3d 27, 49 (1st Cir. 1998).
132. Ringling
Bros.-Barnum & Bailey Combined Shows, Inc. v. Utah Div. of Travel Dev., 170
F.3d 449, 464 (4th Cir. 1999) (“inferring actual harm and effective causation
from such factors as ‘consumer sophistication,’ and ‘predatory intent’ is a
chancy process at best”).
133. Eli Lilly &
Co. v. Natural Answers, Inc., 233 F.3d 456, 469 (7th Cir. 2000) (court
considered only similarity of marks and renown of plaintiff’s mark).
134. Nabisco, Inc. v.
PF Brands, Inc., 191 F.3d 208, 217–22 (2d Cir. 1999).
135. Times Mirror
Magazines, Inc. v. Las Vegas Sports News, L.L.C., 212 F.3d 157, 169 (3d Cir.
2001).
136. Moseley v. V
Secret Catalogue, Inc., 123 S. Ct. 1115, 1121 n.8 (2003).
137. See, e.g.,
Nabisco, 191 F.3d 208 (2d Cir. 1999)
(goldfish-shaped cracker); Coca-Cola Co. v. Alma-Leo U.S.A., Inc., 719 F. Supp.
725 (N.D. Ill. 1989) (Coca-Cola bottle shape); Binney & Smith v. Rose Art
Indus., 60 U.S.P.Q.2d 2000 (E.D. Pa. 2001) (yellow and green color scheme for
crayons, markers, etc.).
138. Two Pesos, Inc.
v. Taco Cabana, Inc., 505 U.S. 763, 770 (1992).
139. Restatement (Third) of Unfair Competition
§ 25 cmt. d at 268.
140. See I.P. Lund Trading ApS v. Kohler Co.,
163 F.3d 27 (1st Cir. 1998) (constitutional issue of whether dilution statute
can be applied to enjoin a competitor’s product design trade dress discussed
but not decided as moot).
141. Sunbeam Prods.,
Inc. v. W. Bend Co., 39 U.S.P.Q.2d 1545 (D.C. Miss. 1996), aff’d, 123 F.3d 246, 259–60 (5th Cir. 1997) (Sunbeam’s seventeen
years’ use of trade dress for its stand mixer design sufficient to show
likelihood of success on the merits), cert.
denied, 523 U.S. 1118 (1998).
142. Circuit City Stores,
Inc. v. OfficeMax, Inc., 949 F. Supp. 409 (E.D. Va. 1996); Resorts of
Pinehurst, Inc. v. Pinehurst Nat’l Corp., 973 F. Supp. 552 (M.D.N.C. 1997), aff’d in part, rev’d in part and
remanded, 148 F.3d 417 (4th Cir. 1998); Nike, Inc. v. Nike Sec. L.P., 50
U.S.P.Q.2d 1202 (N.D. Ill. 1999).
143. Landgraf v. USI
Film Prods., 511 U.S. 244, 272 (1994).
144. Fuente Cigar,
Ltd. v. Opus One, 985 F. Supp. 1448 (M.D. Fla. 1997).
145. Landgraf v. USI
Film Prods., 511 U.S. 244, 270 n.24 (1994).
146. Viacom, Inc. v. Ingram
Enters., Inc., 141 F.3d 886 (8th Cir. 1998).
147. Westchester Media
v. PRL USA Holdings, Inc., 214 F.3d 658, 669 n.11 (5th Cir. 2000); see also
Kellogg Co. v. Exxon Mobil Corp., 192 F. Supp. 2d 790 (W.D. Tenn. 2001);
Santa’s Best v. Seattle Coffee Co., 58 U.S.P.Q.2d 1855 (N.D. Ill. 2001).
148. Moseley v. V
Secret Catalogue, Inc., 123 S. Ct. 1115, 1124 (2003).
149. Id. at 1123 (citing H.R. Rep. No. 104-374, at 1029 (1995)).