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Trademark Basics: Dilution

Posted in Trademark Law

By Jeff Pietsch

Trademark law is traditionally concerned with protecting consumers. Trademarks protect consumers by helping consumers identify the source of the goods or service. For example, when a consumer buys a product, she knows exactly what she is going to get with the product based on its mark. Trademark law was designed to protect these consumers by protecting these marks against copy-cats or products with confusingly similar marks. Cases based on consumer protection concern similar products with similar marks that may confuse consumers. 

Not all trademark law is aimed at protecting consumers. The Federal Trademark Dilution Act (“Act”) is aimed at protecting a company’s property right in its trademark. Dilution is defined as “the lessening of the capacity of a famous mark to identify and distinguish goods or services, regardless of the presence or absence of competition between the parties or the likelihood of confusion, mistake or deception.” In essence, dilution forbids the use of a famous trademark by others in any manner that lessens the uniqueness of the mark. Again, the purpose of the dilution doctrine is not to protect the consumer, but to protect the property right and goodwill that a company has developed in a mark.

Dilution can be separated into two related concepts: blurring and tarnishment.  Blurring occurs when a defendant uses or modifies the plaintiff’s trademark to identify the defendant’s goods and services, raising the possibility that the plaintiff’s mark will lose its ability to serve as a unique identifier of the plaintiff’s product. In these cases, consumers are not confused as to the source of the mark. The original trademark, however, is lessened. For example, if a car company decided to sell cars under the trademark McDonalds, the link and image between the word “McDonalds” and chocolate is weakened.  

 

Besides blurring, dilution can occur based on tarnishment. Tarnishment occurs when the trademark is used in an unsavory or unflattering manner. In a case last year, Hershey, the chocolate maker, claimed that an individual sold his marijuana in packages that resembled Hershey products, the Hershey trademark was degraded by such a use.

 

In order for a trademark owner to succeed on a trademark dilution claim, it must satisfy the elements of the claim. The first and most important aspect of a dilution claim is that the mark must qualify as a distinctive and famous mark. The Act states that courts should consider, but are not limited to, eight factors. These are:

 

1.       The degree of inherent or acquired distinctiveness of the mark

2.       Duration and extent of the use of the mark in connection with the goods and services

3.       Duration and extent of advertising and publicity of the mark

4.       Geographical extent of the trading area in which the mark is used

5.       Channels of trade for the goods or services for which the mark is used

6.       Degree of recognition of the mark in the trading areas and channels of trade used by the mark’s owner and the person against whom the injunction is sought

7.       Nature and extent of use of the same or similar marks by third parties; and

8.       When and how the mark was registered.

                                                 

From these eight factors, it is clear that Hershey’s, in the above case, would constitute a famous mark based on its duration of use of its mark along with its advertising and publicity.

The traditional remedy in dilution cases is an injunction against the trademark violator. In addition, monetary damages may be rewarded if the defendant is found to have willfully intended to trade on the trademark owner’s reputation or to cause dilution of the famous mark. 

 

 
Jeff Pietsch is an associate with Weintraub Genshlea Chediak Tobin & Tobin practicing in the Business, Securities & Commercial Transactions and Intellectual Property groups. Jeff focuses his practice on representing public and private companies with business transactions and intellectual property matters.