Intellectual Property Newsletter

The Federal Trademark Dilution Act

The federal Lanham Act addresses the registration, use and infringement of trademarks and related marks. In 1995, Congress amended the Lanham Act by adding the Federal Trademark Dilution Act (FDTA). A congressional subcommittee stated that the purpose of the FDTA was to “protect famous trademarks from subsequent uses that blur the distinctiveness of the mark or tarnish or disparage it, even in the absence of a likelihood of confusion.”

“Dilution”

The FDTA provides a remedy for the “dilution of famous marks,” where the term “dilution” is defined as “the lessening of the capacity of a famous mark to identify and distinguish goods and services, regardless of the presence or absence of:

1. Competition between the owner of the famous mark and other parties, or
2. Likelihood of confusion, mistake, or deception.”

When drafting this legislation, Congress cited the following examples of actionable “dilution”:

• DUPONT shoes
• BUICK aspirin
• KODAK pianos

“Famous” and “Distinctive” Marks

Under the FDTA, the owner of a famous mark is entitled “to an injunction (e.g., a court order directing the competitor to stop using the mark) against another person’s commercial use in commerce of a mark or trade name, if such use begins after the mark has become famous and causes dilution of the distinctive quality of the mark.” To determine whether a mark is “distinctive and famous,” a court may consider the following factors:

• The degree of inherent or acquired distinctiveness of the mark
• The duration and extent of use of the mark in connection with the goods or services with which the mark is used
• The duration and extent of advertising and publicity of the mark
• The geographical extent of the trading area in which the mark is used
• The channels of trade for the goods or services with which the mark is used
• The 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
• The nature and extent of use of the same or similar marks by third parties
• Whether the mark was registered under the Act of March 3, 1881, or the Act of February 20, 1905, or on the principal register

Remedies

In the typical dilution case, the owner of a famous mark will only be able to obtain injunctive relief (e.g., a court order prohibiting the competitor from using the mark). However, under certain circumstances, the FDTA grants the owner more significant remedies. For example, if the person against whom the injunction is sought “willfully intended to trade on the owner’s reputation or to cause dilution of the famous mark,” the owner may be entitled to recover enhanced remedies, such as defendant’s profits; damages and costs; attorney fees; and the destruction of infringing articles.

First Amendment Concerns

Seven years before the FDTA was enacted, Congress had given consideration to a similar piece of anti-dilution legislation. At that time, Congress objected to the legislation due to fears that it may have restricted expression protected by the First Amendment. To address these fears, the FDTA protects the following activities:

• Fair use of a famous mark by another person in comparative commercial advertising or promotion to identify the competing goods or services of the owner of the famous mark
• Noncommercial use of a mark
• All forms of news reporting and news commentary

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