The Ninth Circuit recently addressed the application of anti-dilution law to trademarks that happen to be common English words. In Visa International Service Association v. JSL Corporation (decided June 28, 2010), the Court held that the defendants’ use of the term “eVisa” for its multilingual education and information business was likely to dilute the Visa trademark. Joseph Orr, who operated eVisa through JSL Corp., ran an English language tutoring service while living in Japan called “Eikaiwa Visa.” (Eikaiwa is Japanese for “English conversation.”) After returning to the U.S., Orr started eVisa (the short form of Eikaiwa Visa) and claimed that the use of the word “visa” was meant to suggest “the ability to travel both linguistically and physically through the English speaking world.” Visa sued JSL claiming that eVisa was likely to dilute its “Visa” trademark. The district court granted summary judgment in Visa’s favor.
In reviewing the lower court’s judgment, the Ninth Circuit began by recognizing that: “A plaintiff seeking relief under federal anti-dilution law must show that its mark is famous and distinctive, that defendant began using its mark in commerce after plaintiff’s mark became famous and distinctive, and that defendant’s mark is likely to dilute plaintiff’s mark.” (Citing Jada Toys, Inc. v. Mattel, Inc., 518 F.3d 628 (9th Cir. 2008).) JSL did not dispute the first two elements but argued that the lower court incorrectly found as a matter of law that eVisa was likely to dilute the Visa trademark.
The Ninth Circuit observed that there are two types of dilution cases but that it was only concerned “with dilution by blurring, which occurs when a mark previously associated with one product also becomes associated with a second.” The court reasoned that “this weakens the mark’s ability to evoke the first product in the minds of consumers.” As examples, the Ninth Circuit listed hypothetical products such as Tylenol snowboards, Netscape sex shops and Harry Potter dry cleaners and stated that these names “would all weaken the ‘commercial magnetism’” of these marks and diminish their ability to evoke their original associations.” The Ninth Circuit emphasized that dilution isn’t about product confusion, but rather “when consumers form new and different associations with the plaintiff’s mark.” For instance, if everyone knows that Tylenol, the analgesic manufacturer, has not entered the snowboard business, the use of “Tylenol snowboards” would then bring to mind two products upon hearing the name “Tylenol.”
The Ninth Circuit recognized that whether a defendant’s mark creates a likelihood of dilution is generally a question of fact that is not suitable for summary judgment. However, the Ninth Circuit held that “summary judgment may be granted in a dilution case, as in any other, if no reasonable fact-finder could fail to find a likelihood of dilution.” The Ninth Circuit continued by recognizing that Congress “has enumerated factors courts may use to analyze the likelihood of dilution including the similarity between the two marks and the distinctiveness and recognition of the plaintiff’s mark.” The Ninth Circuit concluded that in an appropriate case a trial court could conclusively determine one or more of these factors before trial.
Turning to the matter at hand, the Ninth Circuit recognized that the two marks were “effectively identical” with the only the difference being the prefix “e”. The Ninth Circuit recognized that this is commonly used to refer to electronic or online version of a brand and does no more to distinguish the two marks than with the words “Corp.” or “Inc.” tacked on to the end.
The Ninth Circuit further recognized that Visa is a strong trademark and that: “In general, the more unique or arbitrary a mark, the more protection a court will afford it.” The court reasoned that the Visa mark draws on positive mental associations with travel visas which facilitate new opportunities and experiences which “are good attributes for a credit card.” The court continued, however, by recognizing that these associations are sufficiently remote that the word “Visa” would not necessarily make people think of credit cards “if it weren’t for the Visa brand.” The court concluded that “this suggests that any association is the result of goodwill and deserves broad protection from potential infringers.” The Ninth Circuit concluded that Visa’s undisputed evidence that it was the world’s top financial services brand and was used for more online purchases than all other credit cards combined was more than sufficient to support the district court’s summary judgment.
JSL argued that Visa’s market surveys and expert testimony showing that the eVisa name diluted the Visa mark should have been excluded, however, the court recognized that a plaintiff “seeking to establish a likelihood of dilution is not required to go to the expense of producing expert testimony or market surveys, it may rely entirely on the characteristics of the mark at issue.” The Ninth Circuit further rejected eVisa’s claim that it did not intend to dilute the Visa mark, finding that “good intentions alone do not negate a showing of a likelihood of dilution.”
JSL also argued that its eVisa mark could not cause dilution because, in addition to being an electronic payment network, a visa was also a travel document authorizing the bearer to visit other countries. JSL argued that when a trademark is also a word with a dictionary definition, it may be difficult to show that the trademark’s holder’s use of the word is sufficiently distinctive to deserve anti-dilution protection. The court recognized that, although its true that the word visa is used countless times in common English, “the prevalence of such non-trademark use does not undermine the uniqueness of Visa as a trademark.” The court continued by recognizing that “the significant factor is not whether the word itself is common, but whether the way the word is used in a particular context is unique enough to warrant trademark protection.” The court concluded that eVisa was not using the term “visa” in its literal dictionary definition, such as “Orr’s Visa Services.” Rather, JSL was using the eVisa term to create a new association for the word with a product, not merely to “evoke the word’s existing dictionary meaning.” Specifically, the Ninth Circuit found that the defendant was attempting to create “a novel meaning for the word to identify a `multilingual education and information business.’”
The Ninth Circuit concluded that: “dilution always involves use of a mark by a defendant that is `different’ from the plaintiff’s use. The injury addressed by anti-dilution law in fact occurs when marks are placed in new and different contexts, thereby weakening the mark’s ability to bring to mind the plaintiff’s goods or services.” Thus, the Ninth Circuit held that the lower court had proper granted summary judgment in Visa’s favor that “eVisa” unlawfully diluted the Visa mar.