Trademark Enforcement for National Brands Made Easier - Not So For Others: Significant Changes to Trademark Dilution Act Signed into Law

On Oct. 6, 2006, President Bush signed into law the Trademark Dilution Revision Act of 2006. The Act modifies the Federal Trademark Dilution Act (FTDA) making it easier to prove trademark dilution for national brands, but eliminating dilution as a basis for relief for niche market and regionally famous marks. The Act is in response to a recent Supreme Court case and various conflicting decisions of the federal courts of appeals. With this amendment, proof that a defendant’s activities are likely to dilute a mark now is sufficient to obtain an injunction, and various other issues surrounding dilution law have been clarified.

Trademark dilution occurs when the capacity of a famous trademark to identify and distinguish goods or services is weakened, even if there is no competition or likelihood of confusion. For example, use of TIFFANY in connection with restaurant services, or use of POLO for an adult entertainment business.

This much-anticipated revision of the FTDA is primarily a response to the Supreme Court’s decision in Moseley v. V Secret Catalogue, Inc. 537 U.S. 418 (2003), in which the Court held that actual dilution, and not merely a likelihood of dilution, had to be proved to obtain an injunction against dilution of a mark. Congress responded to Moseley by enacting the Trademark Dilution Revision Act to explicitly allow an injunction when a likelihood of dilution is demonstrated. Actual dilution no longer need be proved.

Congress also addressed numerous conflicts among the federal courts of appeals that have muddied trademark dilution law. The amendment makes clear that dilution protection extends to trade dress (the distinctive appearance of a product or its packaging), and prohibits activities in which a famous mark is “tarnished,” such as when it is used with a disreputable product or service. In addition, what constitutes a famous mark that qualifies for dilution protection is now defined as one that is “widely recognized by the general consuming public of the United States.” This clarification rejects the holdings of some courts that a mark can be famous in a niche market or a regional market only. A separate fair-use exemption protects parody, comment and criticism while the FTDA’s preemption of state dilution law has been expanded.

Text of the Trademark Dilution Revision Act of 2006 can be found at: http://www.govtrack.us/data/us/bills.text/109/h/h683.pdf.