Dilution (trademark)

Definition

The use of a mark or trade name in commerce sufficiently similar to a famous mark that by association it reduces, or is likely to reduce, the public's perception that the famous mark signifies something unique, singular or particular.

Dilution is comprised of two principal harms: blurring and tarnishment.  Dilution by blurring occurs when the distinctiveness of a famous mark is impaired by association with another similar mark or trade name.  See 15 U.S.C. § 1125(c)(2)(B).  Dilution by tarnishment occurs when the reputation of a famous mark is harmed through association with another similar mark or trade name.  See 15 U.S.C. § 1125(c)(2)(C).

Overview

Enacted in 1996, the Federal Trademark Dilution Act (FTDA), 15 U.S.C. § 1125(c), creates a federal cause of action to protect famous marks from unauthorized use; to prevent others from trading upon the goodwill and established renown of such marks; and to prevent dilution of the distinctive quality of such marks.  The FTDA is intended to prevent both actual dilution and likely dilution. 

The owner of a famous mark is entitled to an injunction against another person who uses a mark or trade name in commerce that is likely to cause dilution of the famous mark regardless of the presence or absence of actual or likely confusion, of competition, or of actual economic injury. See 15 U.S.C. § 1125(c).  A mark is considered famous if it is widely recognized by the general consuming public of the United States.  Factors for determining whether a mark possesses the necessary degree of recognition include:  the duration, extent, and geographic reach of advertising and publicity of the mark; the amount volume and geographic extent of sales of goods or services offered under the mark; and the extent of actual recognition of the mark.  See 15 U.S.C. § 1125(c)(2)(A).  To establish a claim of dilution, the mark must have become famous before use of the allegedly diluting mark or trade name began.

The factors to be considered in determining whether a mark or trade name is likely to cause dilution by blurring include: the degree of similarity between the mark or trade name and the famous mark; the degree of the famous mark's inherent or acquired distinctiveness; the extent to which the owner of the famous mark is engaged in substantially exclusive use of the mark; the degree of recognition of the famous mark; whether the user of the mark or trade name intended to create an association with the famous mark; and any actual association between the mark or trade name and the famous mark.  See 15 U.S.C. § 1125(c)(2)(B).

Certain uses of famous marks, such as fair use, are not actionable as dilution.  Fair use includes use of the mark other than as a designation of source for the goods or services in connection with: advertising or promotions that permit consumers to compare goods or services; and identifying and parodying, criticizing, or commenting on the owner of the mark or the goods or services connected with the mark.  See 15 U.S.C. § 1125(c)(3)(A).  Also not actionable as dilution is use of a famous mark in any form of news commenting or news reporting, and any non-commercial use of the mark.  See 15 U.S.C. § 1125(c)(B) and (C).

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