On October 6, 2006, President Bush signed the Trademark Dilution Revision Act (“the Act”), which broadens the scope of protection to owners of famous trademarks seeking injunctive relief by lowering the standard of proof required to establish a cause of action for dilution. Among other revisions, the Act also attempts to provide greater clarity to dilution jurisprudence as it defines several trademark terms of art, including the meaning of a “famous” mark, and the two types of dilution — dilution by “blurring” and dilution by “tarnishment.” The Act was primarily the result of efforts initiated by the International Trademark Association (“INTA”) in response to the Supreme Court ruling in Moseley v. V Secret Catalogue, Inc., 537 U.S. 418 (2003). According to INTA President Paul W. Reidl, Associate General Counsel of E. & J. Gallo Winery, the Act “gives brand owners a powerful tool for protecting the trademarks they have worked so hard to build.”

What is Dilution?

The Act provides a list of factors in determining dilution by blurring, including without limitation: (i) the degree of similarity between the conflicting mark and the famous mark; (ii) the degree of inherent or acquired distinctiveness of the famous mark; (iii) the extent to which the famous mark’s owner is engaged in substantially exclusive use; (iv) the degree of recognition of the famous mark; (v) the intent of the conflicting mark’s owner to create an association with the famous mark; and (vi) any actual association between the conflicting mark and the famous mark. Dilution by tarnishment, on the other hand, is “an association arising from the similarity” between the conflicting mark or trade name and the famous mark “that harms the reputation of the famous mark.” 15 U.S.C. § 1127 (c)(2)(C). Unlike its specificity with regard to dilution by blurring, the Act does not shed light on any determinative factors.

Likely To Cause Dilution Standard

At least as early as three years ago, a higher standard of proof for persons filing dilution lawsuits was required as the U.S. Supreme Court in Moseley held that owners of famous marks must prove that alleged offenders committed “actual dilution.” In Moseley, the Court opined that the owner of the VICTORIA’S SECRET mark failed to establish objective proof of actual injury to the economic value of its famous mark as a result of a local Kentucky mom-and-pop adult store’s use of the name “Victor’s Little Secret.” Moseley, 537 U.S. at 433- 34. Proving actual dilution required more than consumers’ mere mental association of the conflicting marks; demonstrating actual, objective evidence was critical. Id.

In line with the Moseley decision, a number of courts applying federal or state anti-dilution statutes found in favor of dilution in limited circumstances, typically only (a) if the challenged mark was essentially the same, sufficiently similar to, or virtually identical to or in some variation to (by adding or subtracting letters of), the famous mark, coupled with the similarity of the mark’s design, logo, color, font, size, marketing, or advertising; and/or (b) if evidence of actual dilution via consumer surveys or experts was proved (assuming the conflicting marks were not identical).

In response to the Moseley decision, the Act now provides greater clarity and establishes that an owner of a famous mark is entitled to injunctive relief against an alleged offender who uses a mark in commerce that is “likely to cause dilution . . . regardless of the presence or absence of actual or likely confusion, of competition, or of actual economic injury.” 15 U.S.C.§ 1125(c)(1) (emphasis added). Thus, proving likelihood to cause dilution — as opposed to actual dilution — has the effect of making it easier for famous trademark owners to seek injunctive relief under the Act. The degree of similarity between the conflicting marks is but one non-exclusive factor in determining dilution by blurring. 15 U.S.C. § 1125(c)(6)(2)(i).

Fair Use Defense

The Act specifically recognizes a defense — adopted by many courts already — to dilution actions if the person accused establishes a “fair use” of the famous mark. The Act states that the following shall not be actionable as dilution: “[a]ny fair use, including a nominative or descriptive fair use, or facilitation of such fair use, of a famous mark by another person other than as a designation of source for the person’s own goods or services, including use in connection with, (i) advertising or promotion that permits consumers to compare goods or services; or (ii) identifying and parodying, criticizing, or commenting upon the famous mark owner or the goods or services of the famous mark owner.” 15 U.S.C. § 1125(3)(A). In other words, a person may use a famous mark in comparative advertisements. The Act also takes into account First Amendment considerations, explicitly excluding actionable dilution claims for all forms of news reporting and news commentary, or any noncommercial use of a mark.