Trademark Dilution: Reserved Only for the Truly Famous

October 20, 2010, 10:20 AM

Dilution of a trademark is a claim reserved for truly famous marks, not ordinary trademarks. Dilution of a trademark occurs when someone adopts and uses a famous trademark to promote a good or service not normally associated with the trademarks brand or something that tarnishes the brand. For example, Buick aspirin, Ferrari toothpaste, Budweiser facial crme or Candyland.com (for adult website rather than kids game). The theory is that the association of the trademark with these disparate uses weakens the strength or tarnishes the goodwill of the trademark. Sounds sensible, but who qualifies? Under the Trademark Dilution Revision Act of 2006 (TDRA), such dilution is actionable only where the requisites of fame are met.

To state a dilution claim under the TDRA, a plaintiff must plead a factual basis for claiming that it owns a famous mark that is distinctive, which the defendant is diluting through its use of a similar mark. See, Louis Vittone Malletier, S.A. v. Haute Diggity Dog, LLC, 507 F.3d 252, 264-65 (4th Cir. 2007) (emphasis added). In 2006, Congress specifically amended the Lanham Act to clarify that a mark is only famous if it is widely recognized by the general consuming public of the United States as a designation of the source of goods or services of a marks owner, Trademark Dilution Revision Act of 2006, Publ. L. No. 109-312, 120 Stat. 1730 (2006); 15 U.S.C. 1125 (c)(2)(A); consistent with its clear intent in limiting such claims, the TDRA denies dilution protection to marks that are famous only in niche markets. See, e.g., Century 21 Real Estate LLC v. Century Ins. Group, 2007 W.L. 484555, * 14 (D. Ariz. 2007).

The 2006 revision to the TDRA made it clear to courts that dilution was a law to be applied sparingly. Dogan & Lemley, The Trademark Use for Quantum and Dilution Cases, 24 Santa Clara Comp. & High Tech, L.J. 541, 548 (2007). As recognized by the leading commentator on trademark law, the fame requirement under the TDRA is a difficult and demanding requirement which limits the extraordinary relief of the federal anti-dilution act to truly prominent and renowned marks. 4 J. Thomas McCarthy, McCarthy on Trademarks and Unfair Competition, 24:104, at 24-286 and 24-289. Indeed, as recent cases have recognized, [o]ne of the major purposes of the TDRA was to restrict dilution causes of action to those few truly famous marks like Budweiser Beer and the like. See Board of Regents v. KST Electric, Ltd., 550 F. Supp. 2d 657, 679 (W.D. Tex. 2008) (holding that the University of Texas Longhorn logo not a famous mark under the TDRA); see also, Anheuser-Busch, Inc. v. Andys Sportswear, Inc., 1996 W.L. 657219, No. C-96-2783 TAG, (N.D. Cal. August 28, 1996); Camel Cigarettes, R.J. Reynolds Tobacco Co. v. Premium Tobacco Stores, Inc., 2004 W.L. 1613563, No. 99-C-1174 (N.D. Ill. July 19, 2004); Barbie Dolls, Mattel, Inc., J. Com, Inc. 1998 W.L. 766711, No. 97 Civ. 7191 (S.S.), (S.D.N.Y. Sept. 10, 1998).

As a result, federal dilution as a cause of action is reserved for a select class of marks
those marks with such powerful consumer associations that even non-competing uses can impinge on their value. Avery Dennison Corp. v. Sumpton, 189 F.3d 868, 874 (9th Cir. 1999). As such, dilution protection extends only to those whose marks are a household name. Thane Intern., Inc., v. Trek Bicycle Corp., 305 F.3d 894, 905 (9th Cir. 2002). Because this stringent fame requirement is so important in limiting abusive dilution claims, trial courts often determine the fame question as an initial gateway issue before going further in analyzing dilution claims. See, e.g., Savin Corp. v. Savin Group, 391 F.3d 439, (2nd Cir. 2004) cert. denied 126 S. Ct. 116 (2005) ([W]here it is possible for a district court to determine in the first instance the issue of the famousness of a senior mark, the court would be well-advised to do so. Indeed, this will obviate the costly litigation of potentially thornier issues . . .). Accordingly, courts have reviewed and dismissed dilution claims made from marks lacking the obvious fame requisite under Rule 12(b)(6) of the Federal Rules of Civil Procedure. See, Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007); Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009) (citing Twombly, 550 U.S. at 556) (where pleading lacks sufficient factual content to support the requisite fame requirement, the claim should be dismissed as lacking facial plausibility).

Stephen E. Noona and K&Cs IP Team have brought and challenged many federal dilution claims. --Stephen E. Noona