Congress is considering changes to the trademark dilution law that would clarify and strengthen it. The changes could lead to an increase in trademark litigation and losses since the revisions would make it easier for plaintiffs to prevail.
Before addressing the changes being contemplated, let’s first examine how dilution differs from ordinary trademark misappropriation. Trademark law historically has protected identification of origin; it’s designed to prevent confusion as to the source of a product or service. The benefit to the buyer is knowing what they’re buying. If you buy a Mercedes Benz, you’re assured of receiving certain standards of quality because you know the source. The benefit to the holder of the mark is the goodwill and identification it can build through use of the mark.
Because trademark law is aimed at avoiding confusion as to source, the same mark can be used in different markets when they can be used without confusion – hence we can have Delta Air Lines and Delta Faucet Company without reasonable people thinking the airline people have gone into the faucet business on the side, or vice versa.
Trademark dilution protection, on the other hand, protects the trademark from use by others, even in non-competing markets. It provides heightened protection to the most famous of trademarks. All that is required is that use of a “famous” mark by a third party causes the dilution of the “distinctive quality” of the mark.
There is no need to prove a likelihood of confusion, nor is there any need to show competition between the goods of the plaintiff and the defendant. Therefore, it’s possible to use a dilution cause of action against users of the same mark even when the defendant’s goods and services bear no relation to the goods or services of the plaintiff’s famous mark.
The U.S. Supreme Court heard its first case under the Trademark Dilution Act in 2003, in a case named Moseley vs. V. Secret Catalogue. One issue was whether a plaintiff merely had to show a likelihood of dilution or had to show that actual dilution had occurred. The court ruled that the dilution statute required actual dilution to have occurred.
The Trademark Dilution Revision Act of 2005 is moving through Congress. It’s written to change the standard of violation from actual dilution to a likelihood of dilution. Another question has been what constituted “blurring” and “tarnishment” and the proposal would offer definitions for those terms.
The bill passed the House in mid-April and went on to the Senate.