Trademark Dilution


1. What is trademark dilution?

Trademark dilution is defined as the lessening of the capacity of a famous mark to identify and distinguish goods or services, regardless of the presence or absence of competition between the owner of the famous mark and other parties or of likelihood of confusion. This typically occurs as the result of blurring or tarnishment of the famous mark.

The law protects marks from the existence of subsequent “confusingly similar” marks. Claiming a likelihood of confusion requires a showing of similarity of the marks in sight, sound or meaning, combined with evidence that the marks being compared are associated with identical, competing, similar or related goods/services. Under this analysis, similar and possibly even identical marks used with distinguishable goods/services or goods/services traveling in different channels of trade may coexist in the same market.

Dilution developed from the concept that some marks are so well known and “famous” that they deserve an extra level of protection beyond the likelihood of confusion analysis. Dilution theory seeks to prevent the coexistence of marks that are sufficiently similar to a famous mark regardless of the goods/services associated with the allegedly diluting mark.


2. Which jurisdictions recognize the concept of dilution?

Most countries recognize some form of trademark dilution and a need for businesses to have some recourse to thwart related activities. However, the definition, the elements and the resulting penalties or forms of compensation imposed upon a trademark diluter can vary across jurisdictions. This fact sheet explains the general concept of dilution with principles that can be applied to many jurisdictions.

Some representative jurisdictions that expressly recognize forms of dilution include: the United States, the European Union (EU), several countries of Central and South America, South Africa, India and Japan.

The recognition of dilution is sometimes the result of harmonization efforts. For instance, within the EU, the Trade Mark Directive, which establishes rules that must be implemented in the national legislation of all member states, includes provisions against dilution. Likewise, WIPO's Joint Recommendation concerning provisions on the protection of well-known marks also includes a provision on dilution. The Joint Recommendation has a binding effect upon the Contracting Parties to the Dominican Republic – Central America Free Trade Agreement (United States, Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, and the Dominican Republic).

It is important to note that there may be other jurisdictions that do not recognize trademark dilution per se but may have their own similar concept. Canada, for example, recognizes the concept of “depreciation of goodwill,” which provides remedy against depreciation of the value of the goodwill attached to a registered trademark. Australia is another jurisdiction that does not use the term dilution. However, well-known marks are granted added protection by allowing their owners to oppose (even if the well-known mark is not registered), seek “defensive” registration (even if there is no real intention to use the mark in connection to those goods or services) or initiate an infringement action if a person uses the same or similar mark in relation to unrelated goods or services and it is likely to be taken as to indicate a connection with the well-known mark.


3. What are the common elements of dilution?

• Fame – A mark that enjoys a certain degree of reputation or recognition. Also related to this is a “Well-Known Mark,” which is a mark that in view of its widespread reputation may enjoy broader protection than ordinary marks. In the U.S., the 2006 Trademark Dilution Revision Act requires a well-known mark be widely recognized by the general consuming public. There can be no claim of dilution if the mark is not at least well known. In the EU, this is also a required element but it is left up to the courts to determine the notion of reputation as the Community Trade Mark (CTM) Regulation does not determine the meaning of reputation. Certain jurisdictions, such as China and Mexico, maintain well-known marks registries. In most jurisdictions, though, the courts and trademark offices decide whether a mark is famous or well-known on a case-by-case basis. Contrastingly, there are some countries that do not require a mark to be well-known for dilution protection. For example, in Andean Community Countries such as Colombia, Peru, Ecuador and Bolivia, the Andean Court indicates that protection against dilution is not only recognized regarding well-known marks but should also be extended to trademarks in the same content and commercial category.
• Protects the Strength of a Mark for the Owner – Instead of protecting consumers from confusing the source of competing, similar or related goods because of the similarity of the marks, dilution protects the owner of an unusually strong or well-known mark from experiencing a decrease in the strength or value of its mark because of another allegedly similar mark regardless of how that allegedly similar mark is used.
• Necessary Showing – In the United States, case law had developed in many states that a plaintiff had to show actual dilution of its mark before being granted relief. This carried over to the interpretation of the federal Lanham Act when it was amended to include a dilution cause of action. In 2006, U.S. Congress passed the Trademark Dilution Revision Act in response to that case law to modify the federal statute to codify that only a likelihood of dilution need be shown by the plaintiff to be awarded relief. It is expected to be easier to have evidence that dilution is likely occurring rather than actually occurring. In South America, evidence is also required by the plaintiff to show that the trademark is well known, and specifically in Andean Community countries, the court stipulates that the risk of dilution of the trademark must be proven. In Australia, the owner must prove that its trademark is well known and that use of a similar mark by others is likely to indicate a connection and/or deceive or cause confusion. In South Africa, according to the South African Constitutional Court, the detriment to a mark’s distinctive character or reputation, which is required in section 34(1)(c) of the South African Trade Marks Act, must be proven to cause substantial harm to the uniqueness and reputation of the mark in light of established facts, not mere allegations.

4. What are the forms of dilution?

• Blurring - Weakening the distinctiveness of a famous mark. This is the traditional notion of dilution – using an identical or virtually identical mark on goods or services that may be completely different and unrelated to the plaintiff’s product/service. The belief is that a mark that is highly similar or identical to the plaintiff’s unique, distinctive and well-known mark can detract from consumers’ strong association of the plaintiff’s mark with the plaintiff’s goods and services therefore lessening the strength or value of the plaintiff’s mark as an identifier of its goods/services. In the U.S., the parties tend to debate how unique, distinctive and well-known a plaintiff’s mark must be in order to have sufficient strength or value as a source-identifier that a mark used in a different trade channel can diminish that strength. In the EU, the CTM Regulation also recognizes dilution in the form of blurring if it is detrimental to the distinctive character of an earlier trademark. In South America, blurring of a mark diminishes the value of the trademark in the market and can also be considered unfair competition.
• Tarnishment - Weakening the distinctiveness of a famous mark, usually through inappropriate or unflattering associations. Examples include using a similar mark, or a term that plays on one’s mark, in association with sexual or offensive content, with subject matter contrary to or critical of the mark owner and its beliefs or philosophies or to attract the mark owner’s customers to directly criticize or attack the mark owner or its product/service. This form of dilution can conflict with free speech rights protected in the U.S. Constitution and can be considered a “fair use” exception to liability. Examples of uses that are sometimes permissible under a fair use exception include referring to a competitor’s product, and parodies and criticisms of a product. This fair use exception is typically asserted as a defense to dilution by tarnishment in U.S. courts. In the EU, CTM Regulation also sees dilution in the form of tarnishment if it is detrimental to the reputation of an earlier trademark. In South America and South Africa, tarnishment of a mark diminishes the value of the trademark in the market and can also fall within the realm of unfair competition.

Additional INTA Resources 

Famous and Well-Known Marks Fact Sheet

Topic Portal: Dilution 
 
See Print Publications for Famous and Well-Known Marks - An International Analysis