1 October 2011Jurisdiction reportsRobert Kenney and Katie Peden

Dilution of famous marks

The TDRA (Trademark Dilution Revision Act) provided for relief based on use of a mark that is “likely to cause dilution”, but it also made extensive rewrites to the repealed FTDA (Federal Trademark Dilution Act) that required clarification by the courts.

A primary issue of statutory interpretation that has arisen under the TDRA has been the degree of similarity between marks that is required for a finding of dilution. The US Court of Appeals for the Ninth and Second Circuits have recently found agreement on this issue. In February, the Ninth Circuit’s decision in Levi Strauss & Co. v Abercrombie & Fitch Trading Co brought it in line with the Second Circuit’s 2009 decision in Starbucks Corp. v Wolfe’s Borough Coffee, Inc.

In Levi Strauss, the Ninth Circuit confronted the issue of whether the ‘identical or nearly identical’ requirement established by case law under the FTDA survived under the TDRA. At trial, the jury was asked whether the two marks were identical or nearly identical as part of its advisory rulings on factual issues related to the dilution claim.

"'DILUTION BY BLURRING' CASES ARE NOW LIKELY TO HINGE ON A BALANCING OF THE TDRA FACTORS TO DETERMINE WHETHER THE JUNIOR MARK IS LIKELY TO IMPAIR THE DISTINCTIVENESS OF THE FAMOUS MARK."

The jury found that the two pocket stitching designs were not identical or nearly identical.

In its decision against Levi Strauss, the district court stated that one of the elements of the dilution claim to be proven by Levi Strauss was “that [Abercrombie] is making or has made use in commerce of an identical or nearly identical trademark”, and it relied on the jury’s finding on this question.

The Ninth Circuit found, on appeal, that its prior post-TDRA dilution cases had not yet addressed this particular issue, and so the ‘identical or nearly identical’ requirement had not been established following enactment of the TDRA.

Furthermore, the court emphasised that the TDRA’s statutory language was clear on the subject, eliminating the need to review the legislative history in order to interpret the statute. Based on statutory language, the Ninth Circuit held in Levi Strauss that similarity is one important factor to be weighed, but that no particular degree of similarity is a required element of a claim of dilution.

The decision focused on a few key passages of the TDRA. ‘Dilution by blurring’ is defined as the “association arising from the similarity of a mark or trade name and a famous mark that impairs the distinctiveness of the famous mark.” And it is only one of six non-exhaustive factors that need to be considered when judging “the degree of similarity between the mark or trade name and the famous mark”.

Based on this new language, the Ninth Circuit determined that Congress did not intend to establish a particular degree of similarity and that it had a clear desire to distinguish the TDRA from its predecessor.

In the Starbucks case, as the Ninth Circuit acknowledged, the Second Circuit also relied on the plain language of the statute in finding that the district court had erred in requiring 'substantial' similarity between the marks and placing undue significance on the similarity factor. The Second Circuit noted that the consideration of a 'degree' of similarity could not be interpreted as requiring any particular degree of similarity and that the consideration has been clearly listed as one factor among several.

As intended by its enactment, the case law interpreting the rewritten language of the TDRA appears to be increasing the utility of the dilution claim for famous mark owners beyond the limited relief provided by the FTDA. However, obstacles to the dilution claim remain as found in the US District Court for the Southern District of New York’s June decision in The Gap, Inc v G.A.P, Adventures, Inc.

Despite finding a likelihood of confusion and each of the TDRA factors in favour of the famous mark owner, the district court declined to find that the association between the marks “impairs the distinctiveness of the famous mark” where no likely impairment or injury had been proven.

‘Dilution by blurring’ cases are now likely to hinge on a balancing of the TDRA factors to determine whether the junior mark is likely to impair the distinctiveness of the famous mark. This balancing analysis is less established than that of the ‘likelihood of confusion’ analysis and will require further discussion in the courts.

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