By Alissa Owen
A proposed bill known as the “Trademark Dilution Improvement Act” responds to confusion over the former Trademark Dilution statute, known as The Federal Trademark Dilution Act (FTDA). The FTDA of 1996 provided owners of “famous” marks special protection against third-party non-competitive uses of their marks, because such third-party use, even for different goods or services, might result in a whittling away, or “dilution” of their companies’ well-known marks. In other words, trademark dilution addresses the injury where there has been a “gradual whittling away or dispersion of the identity and hold upon the public mind of the mark or name by its use on non-competing goods.” (1) As an example, KODAK, an arguably famous mark, is diluted by companies who use “KODAK” for KODAK pianos or KODAK spas.
However, since the FTDA’s inception, Circuit Courts’ treatment of trademark dilution claims conflict, and there is no uniform agreement as to how the injury of dilution should be measured. In a decision attempting to overcome the disparate treatment of lower courts of trademark dilution claims, the Supreme Court held “actual dilution” must be proved in order to win on a dilution claim. However, actual dilution requires showing that measurable dilutive harm occurred, or that the mark was measurably impaired. (2) However, such a standard does not comport with Congress’ intent, which was to prevent dilution from initial third-party use, before measurable damage to the mark occurs. (3) In fact, by the time measurable, provable damage to a mark occurs, much time has passed, the damage has been done, and the remedy, which is injunctive relief, is far less effective. (4)
The proposed bill, H.R. 683, the “Trademark Dilution Improvement Act of 2005,” recently approved by the House Judiciary Committee, provides important and necessary improvements to the Federal trademark dilution statute to increase certainty for all parties involved in trademark disputes. This new legislation provides a more provable cause of action to famous marks owners while protecting free speech. Specifically, H.R. 683 does away with the requirement that a person use a famous mark as a “designation of source” before this use is deemed a “diluting” use. The new proposed law also strengthens the fair use exemption for famous marks used in parody or commentary.
In conclusion, not only may owners of famous marks soon have greater assurance that those using their marks, even for non-competitive goods or services, may not fare as well in court, but also attorneys representing famous-mark owners may more effectively understand how to protect perhaps one of their client’s greatest assets: their client’s name.
For more information please contact Alissa Owen at AOwen@kmclaw.com.