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September 1, 2012 Vol. 67 No. 15 Back to Bulletin Main Page

Trademark Dilution: Recent U.S. Case Law Rejects Requirement That Marks Must Be “Identical” or “Substantially Similar”

To bring a successful trademark dilution claim under U.S. law, owners of famous trademarks no longer need to show that third-party marks are identical or substantially similar. The U.S. Courts of Appeals for the Second and Ninth Circuits recently held that marks need not be either “substantially similar” or “identical or nearly identical” to support a finding of dilution by blurring under the Trademark Dilution Revision Act of 2006 (TDRA) (Section 43(c) of the Lanham Act, 15 U.S.C. § 1125(c)). Similarly, the Trademark Trial and Appeal Board (TTAB) has rejected the “substantial similarity” standard in favor of a “highly similar” standard.

Subsection (c)(2) of the TDRA defines “dilution by blurring” as an “association arising from the similarity between a mark or trade name and a famous mark that impairs the distinctiveness of the famous mark.” The TDRA then provides the following list of non-exhaustive factors that courts may consider in assessing dilution by blurring claims:

(i) The degree of similarity between the mark or trade name and the famous mark.
(ii) The degree of inherent or acquired distinctiveness of the famous mark.
(iii) The extent to which the owner of the famous mark is engaging in substantially exclusive use of the mark.
(iv) The degree of recognition of the famous mark.
(v) Whether the user of the mark or trade name intended to create an association with the famous mark.
(vi) Any actual association between the mark or trade name and the famous mark.

15 U.S.C. § 1125(c)(2)(B) (2006).

As discussed in greater detail below, in Starbucks Corp. v. Wolfe’s Borough Coffee, Inc., the Second Circuit held that the district court erred by requiring, in a dilution case, “substantial similarity” between the marks at issue. 588 F.3d 97, 109 (2d Cir. 2009). Just over a year later, in Levi Strauss & Co. v. Abercrombie & Fitch Trading Co., the Ninth Circuit held that a showing of dilution under the TDRA does not require “that the junior mark is identical, nearly identical or substantially similar to the senior mark.” 633 F.3d 1158, 1172 (9th Cir. 2011).

In Starbucks Corp., coffee retailer giant Starbucks sued family-run coffee manufacturer and retailer Wolfe’s Borough Coffee (d/b/a Black Bear Micro Roastery) for trademark infringement and dilution, unfair competition, and other Lanham Act and state law violations. For its dilution claim, Starbucks alleged that Wolfe’s use of the marks CHARBUCKS BLEND and MISTER CHARBUCKS diluted its STARBUCKS marks. The district court, however, concluded that “Starbucks” and “Charbucks” were not substantially similar, and that as a result “[t]his dissimilarity alone is sufficient to defeat [Starbucks’] blurring claim.” Starbucks Corp. v. Wolfe’s Borough Coffee, Inc., 559 F. Supp. 2d 472, 477 (S.D.N.Y. 2008). The Second Circuit reversed and remanded, holding that the district court erred by requiring “substantial similarity” for Starbucks to prevail on its dilution claim. On remand, however, the district court ultimately rejected Starbucks’ blurring claim, noting “[t]he minimal degree of similarity between the marks as they are used in commerce.” Starbucks Corp. v. Wolfe’s Borough Coffee, Inc., 2011 WL 6747431, at *3 (S.D.N.Y. Dec. 23, 2011).

In Levi Strauss, blue jeans manufacturer Levi Strauss sued clothing manufacturer Abercrombie for trademark infringement, dilution and unfair competition. For its dilution claim, Levi Strauss alleged that Abercrombie’s “Ruehl” stitching design on the back pockets of its jeans diluted its “Arcuate” design, also appearing on jeans back pockets. The district court instructed the jury to provide advisory rulings, including with respect to the elements of dilution: “Is Abercrombie’s Ruehl design identical or nearly identical to the Arcuate trademark?” The jury determined that the designs were not identical or nearly identical, and thus that it was not likely that the Ruehl design diluted the Arcuate design. While reporting the jury’s finding, the district court observed, “In order to be nearly identical, the two marks must be similar enough that a significant segment of the target group of customers sees the two marks as essentially the same.” Levi Strauss & Co. v. Abercrombie & Fitch Trading Co., No. C 07-03752 JSW (N.D. Cal. Apr. 22, 2009). The Ninth Circuit reversed, holding that the district court erred by requiring near identity, and finding further the district court’s error was not harmless because degree of similarity was only one of the factors weighing in favor of non-dilution.

The Second and Ninth Circuits did more than simply reject the stringent “similarity” standards applied by the district courts. Rather, both appellate courts looked to why the lower courts reached the decisions they did, tracing the origins of the substantial similarity or virtual identity requirement to case law relying on the Federal Trademark Dilution Act (FTDA), the predecessor to the TDRA. The Second Circuit noted that the FTDA provided little guidance on what degree of similarity was required to support a finding of dilution, thereby leaving courts to look to state dilution statutes. Similarly, the Ninth Circuit traced the roots of pre-TDRA case law requiring virtual identity to a virtual identity requirement in New York state dilution laws.

Both circuits concluded that while the FTDA arguably left room for a heightened similarity requirement, the TDRA removed any such ambiguity. First, both courts observed that the TDRA declined to use terms such as “identical,” “nearly identical,” “substantially” or “very” similar. Second, they pointed out that the TDRA introduced six non-exhaustive dilution factors, only one of them being “[t]he degree of similarity between the mark or trade name and the famous mark.” 15 U.S.C. § 1125(c)(2)(B)(i). Both courts noted that had Congress intended to make near identity a threshold issue or controlling factor, similarity would not then be listed as merely one of six factors. The Ninth Circuit also observed that by completely rewriting 15 U.S.C. § 1125(c), instead of simply altering select wording or reorganizing subsections, Congress showed its intent to distance the TDRA from the FTDA and its associated case law. The Second Circuit, meanwhile, focused on the FTDA’s use of the term “degree” of similarity, noting that looking to what “degree” of similarity two marks share strongly suggests that marks need not have a “substantial” degree of similarity to support a dilution finding. (See below discussion of INTA’s amicus participation in these appeals.)

Following the Second and Ninth Circuits, the TTAB announced, “[T]he previously enunciated standard requiring ‘substantial similarity’ between the famous mark and the mark at issue is no longer the standard for dilution by blurring.” UMG Recordings, Inc. v. Mattel, Inc., 100 U.S.P.Q.2d 1868, 1888 (T.T.A.B. 2011) (quoting Nike, Inc. v. Maher, 100 U.S.P.Q.2d 1018, 1030 (T.T.A.B. 2011)). Instead, as the TTAB observed, “The question before us in this regard is ‘whether the two involved marks are sufficiently similar to trigger consumers to conjure up a famous mark when confronted with the second mark.’” UMG Recordings, 100 U.S.P.Q.2d at 1888 (quoting National Pork Board v. Supreme Lobster & Seafood Co., 96 U.S.P.Q.2d 1479, 1497 (T.T.A.B. 2010)). In finding a likelihood of dilution by blurring in National Pork Board, the TTAB held that the marks THE OTHER RED MEAT and THE OTHER WHITE MEAT were “highly similar.” 96 U.S.P.Q.2d at 1497. Again, in Research in Motion Ltd. v. Defining Presence Marketing Group, Inc., the TTAB held that the marks BLACKBERRY and CRACKBERRY were “highly similar,” thus supporting a finding of likelihood of dilution by blurring. 2012 WL 893481, at *10 (T.T.A.B. Feb. 27, 2012).

In light of these recent decisions, owners of famous marks should take comfort that their marks are protected against dilution by not only virtually identical or substantially similar marks but also marks of lesser degrees of similarity. Thus, when considering bringing dilution claims, trademark holders should cast a wider net, looking to factors beyond similarity of marks, and prepare their cases accordingly.

INTA and U.S. Dilution Law

In addition to championing the U.S. Congress’s passage of the Trademark Dilution Revision Act of 2006 (TDRA), INTA has filed amicus briefs in dilution cases to help courts correctly apply the TDRA’s provisions. These included briefs in
Levi Strauss v. Abercrombie & Fitch and Starbucks v. Wolfe’s Borough that advocated the proper standard of similarity for a finding of likely dilution.

Starbucks, INTA  argued that the lower court erred because it failed to take account of the TDRA’s list of six non-exclusive factors that courts should consider in assessing dilution by blurring claims, including the “degree of similarity” of the marks and whether the defendant “intended to create an association with the famous mark.” By requiring that the marks be very or substantially similar, and by requiring that the defendant’s intent to associate be in bad faith, the district court disregarded the factors as articulated by Congress. The Second Circuit agreed with INTA’s position on both counts.

Levi Strauss, INTA’s  amicus brief traced the origins of the “identical or nearly identical” standard of similarity to New York statutory law enacted in the 1950s—decades prior to enactment of the Federal Trademark Dilution Act in 1996 (which was repealed and replaced by the TDRA). In Levi Strauss, the Ninth Circuit agreed with INTA’s position and held that the “identical or nearly identical” standard did not survive enactment of the TDRA. In this way, the court prevented a threshold “identicality” requirement from swallowing the TDRA’s multifactor approach for assessing claims of dilution by blurring.

Although every effort has been made to verify the accuracy of items in the INTA Bulletin, readers are urged to check independently on matters of specific concern or interest.

© 2012 International Trademark Association