A Closer Look At The "Trademark Dilution Revision Act of 2006"

A number of people have already blogged about the Trademark Dilution Revision Act ("TDRA") that both Houses of Congress recently passed, and that President Bush is expected to sign into law within the next couple of weeks.  I figured a closer look is warranted.

As an initial note, anti-dilution statutes protect the owner of a famous mark from uses that dilute or lessen the mark's unique and distinctive character, regardless of whether or not there is a "likelihood of confusion" - normally the linchpin of trademark infringement law.  This means that a famous mark will be protected, and dilution will be found, even if a similar mark is used to identify the source of completely unrelated goods or services.  Such laws bestow safeguards upon the owner of a famous mark more akin to property rights than to traditional trademark rights, and ensure that the owner's considerable financial and other investments in the strong, well-known mark will be protected.

The TDRA is Congress's response to the U.S. Supreme Court's 2003 Moseley v. V Secret Catalogue, Inc. decision in which the Court held that the Federal Trademark Dilution Act required proof of actual dilution.  Up until then, the various Federal Circuit Courts (and many states) had been split as to whether there should be proof of actual dilution or likelihood of dilution.  The TDRA expressly allows for injunctive relief and other damages (in the case of willful actions) "against another person who, at any time after the owner's mark has become famous, commences use of a mark or trade name in commerce that is likely to cause dilution by blurring  or dilution by tarnishment of the famous mark."  (Emph. added).  Hence, the new standard is likelihood of dilution.  Blurring is the erosion of distinctiveness caused when another party trades on the public's recognition of the famous mark by using it to identify the source of unrelated goods and services.  Dilution by tarnishment, on the other hand, is defined as the harm caused to the reputation of a famous mark through an unsavory or unpleasant association that brings the famous mark into disrepute (e.g. use of a famous mark by a pornographic website).

Additionally, by defining a famous mark as one that is "widely recognized by the general consuming public of the United States as a designation of source of the goods or services," the TDRA essentially does away with the idea of "niche market" fame.  This concept, which refers to marks that are famous only in a certain geographic area or among a specific group of consumers, is no longer viable under the revised Act.  However, in a move that most trademark practitioners would probably consider to be appropriate, Congress preserved and clarified the exclusions already in existence in the current dilution statute (Section 43(c)), namely, (1) fair use - including descriptive use of the famous mark, use in comparative advertising, and use in parodies, social criticism or social commentary upon the owner of, or goods/services associated with, the famous mark; (2) all forms of news reporting and news commentary; and (3) any noncommercial use of a mark.  Such uses of a famous mark are not actionable as dilution under the TDRA.

It has been a long road, and many parties have been involved in making this legislation a reality.  Let's just hope that it leads to more or less consistent case law from hereon out.