Dilution Bill Overrules Supreme Court Decision In Victoria’s Secret
October 18, 2006
Carla Christina Calcagno - Washington
On October 6, 2006, President Bush signed into law H.R. 683, entitled the Trademark Dilution Revision Act of 2006 (TDRA). This Act amends the Federal Trademark Dilution Act (FTDA), Section 43(c) of the Lanham Act. It became effective on signing.
The TDRA overrules significant aspects of the Supreme Court’s decision in Mosley v. V Secret Catalogue, 537 U.S. 418 (2003), and lower court interpretations of the Federal Trademark Dilution Act of 1995, Section 43(c) of the Lanham Act. These decisions severely restricted the ability of an owner of a famous mark to plead and prove dilution.
At least for owners of marks recognized as famous by the general consuming public in the United States, the TDRA has re-established dilution as an important weapon for fighting infringement. For owners of marks that are known to a particular market segment only, the TDRA may pose serious obstacles to protection.
The TDRA amends the Federal Trademark Dilution Act in the following seven major respects:
1. Dilution now consists of both blurring and tarnishment of a famous mark.
• Dilution by blurring is defined as an “association arising from the similarity between a mark or trade name and famous mark that impairs the distinctiveness of the famous mark.”
• Dilution by tarnishment is defined as an “association arising from the similarity between a mark or trade name and famous mark that harms the reputation of the famous mark.”
2. Owners of marks that are not inherently distinctive but which have acquired distinctiveness are now able to bring causes of action for federal dilution. Overturning Second Circuit law, federal dilution claims are not limited to owners of inherently distinctive marks.
3. Trade dress is now expressly eligible for dilution protection. Overturning suggestions in circuit law, federal dilution claims are not limited to traditional word or design marks.
4. A mark is famous only if it is recognized by the general consuming public in the United States. A mark that is only known to a particular market segment may not be famous for purposes of dilution claims.
5. A plaintiff only has to prove a defendant’s use causes a likelihood of blurring or tarnishment dilution. Proving actual dilution is no longer required.
6. Evidentiary factors to prove dilution by blurring are clarified to include: (1) degree of similarity between the marks; (2) degree of inherent or acquired distinctiveness; (3) degree of substantially exclusive use of the famous mark; (4) degree of recognition of the famous mark; (5) defendant’s intent to create an association with the famous mark; and (6) any actual association between the marks.
7. Any fair use of a mark, including nominative fair use such as parody, is a specified defense to a dilution cause of action.
The TDRA Provides Guidance to the Courts and More Protection to Owners
The TDRA was intended to resolve conflicting court interpretations of the FTDA, and to address the Supreme Court’s decision in Mosley v. V Secret Catalogue, 537 U.S. 418 (2003), that the FTDA only provided a remedy for cases of actual dilution. The new legislation is meant to provide guidance to the courts and ensure uniform application and interpretation of the federal dilution law.
In most respects, the TDRA significantly expands a famous trademark owner’s rights under the Federal Trademark Dilution Act. Specifically, the TDRA expands rights by: (1) permitting dilution claims based on either blurring or tarnishment; (2) defining “blurring” dilution as an “association that impairs the distinctiveness of the famous mark”; and (3) permitting actions based on likelihood of dilution, rather than limiting actions to cases of actual dilution only. Each of these changes significantly relaxes the standards and evidentiary factors for proving dilution, as interpreted by Mosley.
Resolving conflicting holdings among circuits, the TDRA also significantly expands protection by permitting dilution claims to be based on: (1) trade dress, rather than word or design marks only; and (2) marks that have acquired distinctiveness, rather than inherently distinctive marks only.
The TDRA limits a trademark owner’s dilution protection, however, in several respects. First, a mark is famous, and therefore eligible for federal dilution protection, only if it is known to the “general consuming public of the United States.” Depending on how this requirement is interpreted, this amendment may deny dilution protection to trademark owners with marks that are famous only in “niche markets.” Second, the Act specifies nominative fair use, including parody, in addition to comparative advertising, as a defense to dilution. Finally, the TDRA expressly excludes noncommercial use of a mark from its scope.
The TDRA appears to give owners of famous marks increased protection. As with any new statute, however, the precise contours of the action may be subject to judicial interpretation.
For more information, e-mail Carla Calcagno at carla.calgano@hklaw.com or call toll free, 1-888-688-8500.