THE CONNECTICUT LAW TRIBUNE December 2006 • www.ctlawtribune.com

CONSUMER CONFUSION Dilution: The Fame Game

Congress overrules 2003 Supreme Court trademark decision and expands protection of marks By ALLAN P. HILLMAN

An offending mark may either ‘blur’ the famous mark’s ability to identify its goods or services; or ‘tarnish’ the famous mark, because the offending mark is associated with lower quality goods or services.

Courts evaluate many factors in parties’ marks are the same or virtually the reaching this conclusion, including the same, there is no “likelihood of confusion” strength and distinctiveness of the marks in (e.g., few people would think that Exxon question; their similarity; the similarity of Oil Corp. was the source of “Exxon the goods and services they identify; the massage parlors”). In those cases, rademark infringement claims arise similarity of facilities used by the parties in normally the aggrieved senior (prior) Twhen a defendant uses an identical their ; the similarity of their trademark owner has no claim. There is a mark or one “confusingly similar” to the advertising; defendant’s intent (although significant exception, however. plaintiff’s mark, so that the relevant buying this goes to the issue of damages and If a mark is “famous” (a term defined at public is likely to believe erroneously that attorney fees); and actual public confusion. length in part (c) of 15 U.S.C. §1125), there the plaintiff is the source of defendant’s Federally-registered and is additional protection for the trademark goods or services. In fact, the defendant is servicemarks are protected from infringe- holder, which may sue for “dilution” of simply trading off of the plaintiff’s mark. ment under the “,” particularly its mark. 15 U.S.C. §1114-1118, and there are also Part (c) of 15 U.S.C §1125 is the protections for unregistered marks Federal Act (FTDA). Allan Hillman is a partner at Shipman & under the Lanham Act’s federal unfair This legislation provides owners Goodwin LLP in Hartford, and a member of competition and false advertising of “famous” marks the right to gain its Intellectual and Trade Regula- provision, 15 U.S.C. §1125(a). relief without proving “likelihood tion and Franchise Practice Groups. Sometimes, however, even where the of confusion.” THE CONNECTICUT

LAW TRIBUNE December 2006

Evocative Association while no likelihood of confusion existed, recognized by the general consuming To establish dilution, the plaintiff must the plaintiff was entitled to injunctive relief public of the as a designation prove that defendant made use of a junior based on dilution by tarnishment. It of source of the goods or services of the mark sufficiently similar to the famous rejected the defendants’ argument that the mark’s owner.” However, only famous mark to evoke, in the relevant group of FTDA required proof of actual economic marks that are inherently distinctive or consumers, a mental association between harm. The U.S. Court of Appeals for the have acquired distinctiveness (a subject the two that has caused actual economic 6th Circuit affirmed. beyond the scope of this article) are harm to the famous mark’s value by l The Supreme Court reversed, holding entitled to federal dilution protection. essening its selling power. that relief under the FTDA did require The TDRA further defines and provides This can be shown by demonstrating objective proof of actual injury to the a list of factors that (among others) a court that the use of the offending mark “blurs” economic value of a famous mark, may consider in determining whether a the famous mark’s ability to identify its premising its conclusion, in part, on the mark “possesses the requisite degree of goods or services, or that it “tarnishes” the wording of 15 U.S.C §1125(c), specifically recognition” to qualify as a famous mark. famous mark, because the offending mark the requirement that the defendant’s act It also lists factors that a court may is associated with lower quality goods “causes dilution.” consider in determining whether a or services. trademark is “likely to cause dilution Blurring occurs when a trademark is Circumstantial Evidence by blurring.” used by someone other than the trademark The Court held generally that circum- owner in connection with goods or stantial evidence of dilution, consumer Blurry Distinction services that are unrelated to those with surveys, and evidence of lost sales or On the other hand, while “dilution by which the mark is normally used. profits were among the ways to prove tarnishment” is defined as an “association While a consumer may not be actual dilution. Finally, it held that where arising from the similarity between a mark confused as to the origin of the goods or the marks are not identical, “the mere fact or and a famous mark that services, there is, nevertheless, an that consumers may mentally associate the harms the reputation of the famous mark,” undesired association of the mark with junior mark with the famous mark is not no definition of “harm” is included. And, other products, causing a lessening in sufficient to establish actionable dilution.” the TDRA has no list of relevant factors a the mark’s capacity to identify and It did not decide whether, where the court may consider in determining distinguish goods and services. marks are identical, mental association is whether a trademark is “likely to cause Tarnishment occurs where a mark is sufficient to prove dilution. dilution by tarnishment.” used in connection with distasteful or Famous mark owners, primarily Finally, to address First Amendment free otherwise objectionable products or including large corporations, sought speech concerns, the TDRA specifies services, leading not only to a lessening in successfully to convince their elected rep- “” exceptions for “advertising or the uniqueness of the mark but to harm to resentatives to legislatively overrule promotion”; “identifying and parodying, its reputation as well. Moseley. They did so, resulting in the criticizing, or commenting upon the The FTDA has presented problems, Trademark Dilution Revision Act of 2006 famous mark owner or [its] goods or however. A principal one was whether (TDRA). Most important, the TDRA services”; “news reporting and news “actual” dilution or merely a “likelihood of establishes a standard of “likely to cause commentary”; and any “non-commercial dilution” was required to sustain a dilution dilution … regardless of the presence of use of a mark.” claim. In Moseley v. ’s Secret actual economic injury.…” as the touch- Thus, Victoria’s Secret, having been Catalogue, Inc., 537 U.S. 418 (2003), the stone of federal dilution protection, a denuded of its rights in 2003, inspired Court resolved this issue in favor of lesser hurdle then Moseley’s “objective corrective legislation. While it came too the defendants. proof of actual injury to the economic late for the Moseley case, Victoria’s Secret In that case, the defendants operated a value of the famous mark.” won a “moral victory.” ■ small-town adult novelty shop called The TDRA provides for a federal action This article is reprinted with permission from the December, for blurring and/or tarnishment. It makes “Victor’s Little Secret.” The plaintiff, 2006 edition of THE CONNECTICUT LAW TRIBUNE. Victoria’s Secret, the well-known source of clear that fame, and not distinctiveness, is © 2006 ALM , Inc. All rights reserved. Further lingerie products, sued for infringement the key inquiry in a dilution claim. The duplication without permission is prohibited. For informa- and dilution of its mark VICTORIA’S TDRA provides a statutory definition of a tion, contact ALM, Reprint Department at 800-888-8300 SECRET. The trial court concluded that, “famous” mark as one “which is widely x6111 or visit www.almreprints.com. #081301-12-06-0001