Trademark Dilution

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Trademark dilution is a trademark law concept forbidding the use of a famous trademark in a way that would lessen its uniqueness. In most cases, trademark dilution involves an unauthorized use of another's trademark on products that do not compete with, and have little connection with, those of the trademark owner. For example, a famous trademark used by one company to refer to hair care products might be diluted if another company began using a similar mark to refer to breakfast cereals or spark plugs.

Background Trademark law is generally focused on the need for consumer protection. Consequently, trademark law traditionally concerned itself with situations where an unauthorized party sold goods that are directly competitive with or at least related to those sold by the trademark owner. However, in many jurisdictions the concept of dilution has developed recently to protect trademarks as a property right, securing the investment the trademark owner has made in establishing and promoting a strong mark. The concept of dilution is much newer than the rest of trademark law; only in the mid-1990s did the United States enact a law against trademark dilution, although various states had begun adopting such laws shortly after World War II, and the idea was floated in academic writing as early as the late 1920s.

A trademark is diluted when the use of similar or identical trademarks in other non-competing markets means that the trademark in and of itself will lose its capacity to signify a single source. In other words, unlike ordinary trademark law, dilution protection extends to trademark uses that do not confuse consumers regarding who has made a product. Instead, dilution protection law aims to protect sufficiently strong trademarks from losing their singular association in the public mind with a particular product, perhaps imagined if the trademark were to be encountered independently of any product (i.e., just the word Pepsi-Cola spoken, or on a Billboard (advertising)).

Requirements for protection The strength required for a trademark to deserve dilution protection differs among jurisdictions, though it generally includes the requirement that it must be distinctive, famous, or even unique. Such trademarks would include instantly recognizable brand names, such as Coca-Cola, Kleenex, Kool-Aid, or Sony, and unique terms that were invented (such as ExxonMobil) rather than surnames (such as Ford Motor Company) or ordinary words in language. Some jurisdictions require additional registration of these trademarks as defensive marks in order to qualify for dilution protection.

Another way of describing the necessary strength of a trademark may establish some basis for dilution protection from a consumer confusion standpoint. Truly famous trademarks are likely to be seen in many different contexts due to branching out or simple sponsorship, to the extent that there may be very few markets, if any, that a consumer would be surprised to see that famous trademark involved in. A prime example may be the past involvement of Coca-Cola in clothing lines.

Blurring and tarnishment Dilution is sometimes divided into two related concepts: blurring, or essentially basic dilution, which "blurs" a mark from association with only one product to signify other products in other markets (such as "Kodak shoes"); and tarnishment, which is the weakening of a mark through unsavory or unflattering associations. Not all dilution protection laws recognize tarnishment as an included concept.

United States case law Prior to specifically targeted laws being adopted, dilution protection was used in some jurisdictions to attack domain name infringement of trademarks (see Cybersquatting). For example, in the 1998 case of Panavision International v. Toeppen, defendant Toeppen registered the domain name www.panavision.com, and posted aerial views of the city of Pana, Illinois on the site. The United States Court of Appeals for the Ninth Circuit found that trademark dilution occurred when potential customers of Panavision could not find its web site at panavision.com, and instead were forced to search through other (less obvious) domain names. The fact that potential customers might be discouraged from locating Panavision's legitimate website, coupled with evidence that Toeppen was in the business of registering domain names for profit, led the court to find that Toeppen's conduct "dimished the capacity of the Panavision marks to identify and distinguish Panavision's goods and services on the Internet", and thus constituted infringement.

Lately, the Trademark Dilution Revision Act of 2006, or H.R. 683, was signed into law. H.R. 683 overturned the Supreme Court decision in Moseley v. V Secret Catalogue, Inc., 537 U.S. 418 (2003). Mosely held the plaintiff needed to prove actual dilution under the Federal Trademark Dilution Act ("FTDA"). The new law revises the FTDA so that the plaintiff only needs to show the defendant's mark is likely to cause dilution.

Further reading

Ilanah Simon, The Actual Dilution Requirement in the United States, United Kingdom and European Union: A Comparative Analysis, Journal of Science & Technology Law, Volume 12 Issue 2 - Summer 2006