What exactly is with the new trademark dilution bill?

(Email exchange off the INTA email list reprinted here with Mike Atkins’s permission;)

From: Atkins, Michael G.
Sent: Friday, April 07, 2006 4:21 PM
To: ‘[email protected]
Subject: (INTA list) – H.R. 683’s Clarified Standard of Proving Dilution

I got a status update yesterday from the House Judiciary Committee on the INTA-backed Trademark Dilution Revision Act (H.R. 683). This is the bill that would amend the Federal Trademark Dilution Act by, among other things: (1) overruling Moseley v. V Secret, (2) clarifying the standard of proof needed to establish federal dilution of a famous trademark, (3)confirming that dilution can be established through blurring, and (4) defining “fame” as being “widely recognized by the general consuming public of the United States,” which would eliminate niche market fame.
[From LIKELIHOOD OF CONFUSION®]:
“Positive changes” for plaintiffs, Michael — undoubtedly, at least in termsof “blurring,” sure to be the catchall defendant-killer for the 21st century (right along with initial interest confusion). Let’s at least see if judgeswill get the hint as to the definition of “fame.”  Can you tell us more about (2)?

[From Mike in response:]

Sure.

In Moseley v. V Secret the Supreme Court found that the Federal Trademark Dilution Act required a showing of “actual dilution,” rather than the “likelihood of dilution” test the Sixth Circuit had applied. Applying the actual dilution standard, the Court held that Victoria’s Secret had not proven its claim. The Court found that unless the marks are identical, a trademark owner must offer a survey or other direct evidence that its mark has been measurably impaired to prove actual dilution. In the case of identical marks, the Court suggested that circumstantial evidence may be sufficient, but did not elaborate further.

In my view, these vague standards leave trademark owners wondering how they are supposed to prove actual dilution. The Seventh Circuit commented that the Supreme Court “did not explain and no one seems to know what [its required] ‘circumstantial evidence’ [in the case of proving dilution of identical marks] might be.” Ty Inc. v. Softbelly’s Inc., 353 F.3d 528, 536 (7th Cir. 2003). INTA testified through Anne Gundelfinger that the FTDA provided a cause of action to remedy dilution, but “the Supreme Court has interpreted it in a manner that makes it at best ambiguous and at worst nearly impossible to establish.”

That’s how I would characterize the problem. H.R. 683 would solve this problem by “overruling” Moseley and revising what a plaintiff must do to get relief. Under H.R. 683, the owner of a famous mark can prevail against another person who “at any time after the owner’s mark has become famous, commences use of a mark or trade name in commerce as a designation of source that is likely to cause dilution by blurring or dilution by tarnishment of the famous mark, regardless of the presence or absence of actual or likely confusion, of competition, or of actual economic injury.”

H.R. 683 pegs the specific proof needed to establish a likelihood of dilution to the type of dilution alleged. The bill defines “dilution by blurring” as “the association arising from the similarity between a mark or trade name and a famous mark” that impairs the ability of the famous mark to distinguish goods produced by the owner of the famous mark from goods produced by the owner of the similar mark or trade name. In considering dilution by blurring, the bill authorizes courts to consider “all relevant factors,” including:

· The degree of similarity between the mark or trade name and the famous mark;

· The degree of inherent or acquired distinctiveness of the famous mark;

· The extent to which the owner of the famous mark is engaging 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.

The bill defines “dilution by tarnishment” as “the association arising from the similarity between a mark or trade name and a famous mark that harms the reputation of the famous mark.”

Together, these revisions would bring us back (in several circuits) to a likelihood of dilution standard, make that standard uniform, more precisely define dilution, and give owners of famous marks a much better idea how to avail themselves of federal protection.

I hope this is helpful.

It is to me, Mike, and thanks again. I may not like it but I certainly need to understand it.

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Author:Ron Coleman

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