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How Courts Have Interpreted the Trademark Dilution Revision Act

Courts have had a year to interpret the Trademark Dilution Revision Act. What have they decided? Here’s a survey of the decisions I have found most instructive.

What is the significance of the Trademark Dilution Revision Act?

In Dan-Foam A/S v. Brand Named Beds, LLC, 500 F.Supp.2d 296, 306 n.87 (S.D.N.Y 2007) (STL discussion here), the Southern District of New York summarized the TDRA’s significance as follows:

“The TDRA became effective on October 6, 2006, replacing the Federal Trademark Dilution Act of 1996 (‘FTDA’). Specific changes to the federal dilution law under the TDRA include the establishment of a ‘likelihood of dilution’ standard for dilution claims, rather than an ‘actual dilution’ standard; a provision that non-inherently distinctive marks may qualify for protection; a reconfiguration of the factors used to determine whether a mark is famous for dilution purposes, including a rejection of dilution claims based on ‘niche’ fame; the specification of separate and explicit causes of action for dilution by blurring and dilution by tarnishment; and an expanded set of exclusions.”

How does the statute impact cases that were filed before the statute went into effect?

Whether the statute affects already-pending cases appears largely to depend on whether the plaintiff seeks an injunction or seeks damages. In Starbucks Corp. v. Wolfe’s Borough Coffee, Inc., 477 F.3d 765, 766 (2nd Cir. 2007) (STL discussion here), the Second Circuit found “[t]he amended statute applies to this case to the extent that Starbucks has sought injunctive relief on the issues of dilution.” Based on this finding, the court vacated the Southern District of New York’s dismissal of Starbucks’ dilution claim because the district court had “applied the pre-October 6, 2006 version of the FTDA, as construed by Moseley, and determined that Starbucks had failed to prove actual dilution.”  IdAccord, AutoZone, Inc. v. Strick, 466 F.Supp.2d 1034, 1044 (N.D. Ill. 2006) (STL discussion here).

With regard to pending cases seeking monetary relief, in Louis Vuitton Malletier v. Dooney & Bourke, Inc., 500 F.Supp.2d 276, 283 (S.D.N.Y. 2007) (STL discussion here), the Southern District of New York found the FTDA standard of “actual dilution” still governs:

“The second sentence of subsection 1125(c)(5), entitling owners of famous marks to dilution damages, contains an unambiguous date restriction that authorizes the application of the ‘likelihood of dilution’ standard as a basis for recovering damages to civil actions where the dilution mark or trade name was first introduced in commerce after October 6, 2006.”

The court added for pending claims for monetary relief, “the controlling standard is that which governed prior to the TDRA,” namely, actual dilution. Accord, Dan-Foam A/S v. Brand Nme Beds, LLC, 500 F.Supp.2d 296, 306 (S.D.N.Y. 2007); AutoZone, Inc., 466 F.Supp.2d at 1044 (“The damages provision of the amended statute apply only to offending marks first used after the Act went into effect.”).

Unfortunately, however, courts have not consistently applied this approach. Without explanation, some courts in the Ninth Circuit have continued to apply the actual dilution standard to claims that sought, or probably sought, injunctive relief. See, e.g., Horphag Research Ltd. v. Garcia, 475 F.3d 1029, (9th Cir. 2007) (applying the actual dilution standard to plaintiff’s dilution claim even though plaintiff previously had moved for a preliminary injunction and the TDRA was enacted three months before the court’s decision) (STL discussion here); Nautilus Group, Inc. v. Icon Health & Fitness, Inc., 2006 WL 3761367 (W.D. Wash.) (applying actual dilution standard two months after TDRA became effective) (STL discussion here). See also, Hodgdon Powder Co., Inc. v. Alliant Techsystems, Inc., 497 F.Supp.2d 1221, 1232 n.3 (D. Kan.) (“The parties agree that the Trademark Dilution Revision Act does not apply to plaintiff’s claims. The parties, and the court, rely on the law prior to the TDRA.”) (STL discussion here). In Jada Toys, Inc. v. Mattel, Inc., 496 F.3d 974, 981 n.2 (9th Cir. 2007), the Ninth Circuit applied the actual dilution standard because the case had been “filed in 2004, prior to the 2006 amendment of § 1125….” (STL discussion here).

Though I would expect most courts to follow Starbucks and AutoZone, I still am glad this issue will resolve itself naturally over time.

Does dilution apply to marks that are famous in a niche market?

The TDRA establishes that “[a] famous mark is one that ‘is widely recognized by the general consuming public of the United States as a designation of source of the goods or services of the mark’s owner.’” Nike, Inc. v. Nikepal Int’l, 2007 WL 2782030, *5 (E.D. Cal.) (STL discussion here) quoting the TDRA. This would seem to clarify that the TDRA does not extend to trademarks that are famous only in a “niche market.” See, e.g., Vista India v. RAAGA, LLC, __ F.Supp.2d __, 2007 WL 2257665, *15 (D.N.J.) (“Under the standard of whether a mark is famous, the question is whether the mark is well-known throughout the country by the general consuming public, regardless of the relevant consuming public….”). However, niche market fame in some instances still lives on — at least in those cases that continue to apply the FTDA standards after the TDRA was enacted. See, e.g.Arkansas Trophy Hunters Ass’n, Inc. v. Texas Trophy Hunters Ass’n, Ltd., __ F.Supp.2d __, 2007 WL 410930, *6 (W.D. Ark.); Hodgdon Powder Co., Inc., 497 F.Supp.2d at 1232.

In what cases have courts found a likelihood of dilution?

It’s been interesting to see whether lessening the standard of proof from “actual dilution” to “likelihood of dilution” and raising of the standard (in some jurisdictions) from “niche market” fame to nationwide fame on balance would favor plaintiffs or defendants. No clear answer has yet emerged. To see what the TRDA protects, one must look at the TDRA itself and cases in which courts have found dilution. See, e.g., Nike, Inc., 2007 WL 2782030 at *8; Diane Von Furstenberg Studio v. Snyder, 2007 WL 2688184, *4 (E.D. Va.); Eldorado Stone, LLC v. Renaissance Stone, Inc., 2007 WL 2403572, *5 (S.D. Calif.) (STL discussion here); Pet Silk, Inc. v. Jackson, 481 F.Supp.2d 824 (S.D. Tex. 2007) (STL discussion here).

In what cases have courts found no likelihood of dilution?

Again, it’s hard to generalize about courts’ findings of no likelihood of dilution. Take a look at cases in which courts found no likelihood of dilution: Pan American World Airways, Inc. v. Flight 001, Inc., 2007 WL 2040588, *18-19 (S.D.N.Y.); Century 21 Real Estate, LLC v. Century Ins. Group, 2007 WL 484555, *18 (D. Ariz.) (STL discussion here); and Louis Vuitton Malletier S.A. v. Haute Diggity Dog, LLC, 464 F.Supp.2d 495, 505 (E.D. Va. 2006) (STL discussion here).

Hopefully, a second year of decisions will provide more clarity.

Posted on October 14, 2007 by Registered CommenterMichael Atkins in | CommentsPost a Comment

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