Seattle Trademark Lawyer

On Feb. 21, the Ninth Circuit took the unusual step of amending its six-month old decision in Jada Toys, Inc. v. Mattel, Inc., deciding the “new” standards established in the October 2006 Trademark Dilution Revision Act apply to Mattel’s dilution counterclaim, not the old standards set forth in the Federal Trademark Dilution Act. In doing so, the court applied the TDRA’s “likelihood of dilution” standard, four-factor test for assessing fame, and six-factor test for determining the existence of “dilution by blurring.” After applying these standards, the court found the result was the same as under the old standards: a reasonable trier of fact could conclude that Jada Toys’ HOT RIGZ mark, used in connection with toy trucks, was likely to dilute Mattel’s famous HOT WHEELS mark used in connection with toy vehicles.

The court’s Aug. 2, 2007, decision applied the old “actual dilution” standard because the case was filed before the TDRA became effective. The court explained in a footnote: “Because this action was filed in 2004, prior to the 2006 amendment of § 1125, … the previous version of § 1125 applies, codified at 15 U.S.C. § 1125(c)(1) (2000).” (STL post here.)

The amended decision replaces that footnote with an explanation as to why the “likelihood of dilution” and other standards established in the TDRA apply instead:

“We note that in this case the district court applied the prior version of the Federal Trademark Dilution Act (‘FTDA’), … which required a showing of actual dilution. The actual dilution requirement was a product of the Supreme Court’s decision in Moseley v. V Secret Catalogue, Inc., 537 U.S. 418, 433 (2003), where the Court held that the federal dilution statute required a showing of actual dilution. However, since that time the FTDA has been amended so as to require only a likelihood of dilution to succeed. In this case, we chose to apply the standard currently in operation so as to adhere to our prior precedent established in Nissan Motor Co. v. Nissan Computer Corp., 378 F.3d 1002, 1009-10 (9th Cir. 2004), in which we held that application of the FTDA to an alleged diluting mark that was in use before the statute’s passage was not retroactive because the FTDA authorizes only prospective relief.”

The court recognized that applying TDRA standards to a case that had been filed before the TDRA was enacted was inconsistent with its decision last year in Horphag Research Ltd. v. Garcia:

“We are aware that in Horphag Research Ltd. v. Garcia, 475 F.3d 1029, 1035 (9th Cir. 2007) (STL post here), we applied the FTDA retroactively, thereby creating an unintentional intra-circuit conflict with Nissan. In Horphag, however, neither party mentioned the TDRA in its briefs, nor moved for a petition for panel rehearing or to vacate the mandate in light of the TDRA’s passage. Moreover, the plaintiff in Horphag prevailed under the more stringent version of the federal dilution statute. Accordingly, recalling the Horphag mandate at this point would serve no purpose.”

It will be interesting to see whether the court’s amended decision will affect Phase Forward Inc. v. Adams, 2008 WL 340951 (N.D. Cal.) (STL post here), which granted plaintiff’s motion for reconsideration earlier this month based on the now-superseded Jada Toys decision that applied the FTDA’s standard for fame (which recognized niche market fame) rather than the TDRA’s standard (which requires nationwide fame). My guess is the Northern District of California will recognize this decision as yet another intervening change in controlling law and will restore its previous dismissal of plaintiff’s dilution claim.

The case cite is Jada Toys, Inc. v. Mattel, Inc., __ F.3d __, 2008 WL 450891, No. 05-55627 (9th Cir. Aug. 2, 2007, amended Feb. 21, 2008).