Journal of Intellectual Property Law Volume 1 | Issue 2 Article 2 March 1994 Dilution, An Idea Whose Time Has Gone; Brand Equity As Protectable Property, the New/Old Paradigm Jerre B. Swann Kilpatrick & Cody Theodore H. Davis Jr. Kilpatrick & Cody Follow this and additional works at: https://digitalcommons.law.uga.edu/jipl Part of the Intellectual Property Law Commons, and the Law and Economics Commons Recommended Citation Jerre B. Swann & Theodore H. Davis Jr., Dilution, An Idea Whose Time Has Gone; Brand Equity As Protectable Property, the New/Old Paradigm, 1 J. Intell. Prop. L. 219 (1994). Available at: https://digitalcommons.law.uga.edu/jipl/vol1/iss2/2 This Article is brought to you for free and open access by Digital Commons @ Georgia Law. It has been accepted for inclusion in Journal of Intellectual Property Law by an authorized editor of Digital Commons @ Georgia Law. Please share how you have benefited from this access For more information, please contact [email protected]. Swann and Davis: Dilution, An Idea Whose Time Has Gone; Brand Equity As Protectabl THE JOURNAL OF INTELLECTUAL PROPERTY LAW VOLUME 1 SPRING 1994 NUMBER 2 ARTICLES DILUTION, AN IDEA WHOSE TIME HAS GONE; BRAND EQUITY AS PROTECTABLE PROPERTY, THE NEW/OLD PARADIGM* Jerre B. Swann** and Theodore H. Davis, Jr.*** I. INTRODUCTION The touchstone for trademark protection under the Lanham Act is likelihood of confusion as to source or sponsorship.' Dilution statutes in twenty-five states have extended protection to likelihood of injury to business reputation or dilution of the distinctive quality * This article will also appear in The Trademark Reporter. ** Partner in the firm of Kilpatrick & Cody, Atlanta, Georgia; Former Editor-in-Chief (1988-90) of The Trademark Reporter®. *** Associate in the firm of Kilpatrick & Cody, Atlanta, Georgia; Member, Editorial Board of The Trademark Reporter. I "[T]he test for liability is likelihood of confusion: '[U]nder the Lanham Act, the ultimate test is whether the public is likely to be deceived or confused by the similarity of the marks. ... Whether we call the violation infringement, unfair competition or false designation of origin, the test is identical-is there a "likelihood of confusion?'" Two Pesos, Inc. v. Taco Cabana, Inc., 112 S. Ct. 2753,2763 (1992) (Stevens, J., concurring) (quoting New West Corp. v. NYM Co., 595 F.2d 1194, 1201 (9th Cir. 1979) (footnote omitted)). 219 Published by Digital Commons @ Georgia Law, 1994 1 Journal of Intellectual Property Law, Vol. 1, Iss. 2 [1994], Art. 2 220 J. INTELL. PROP. L. [Vol. 1:219 of a mark.2 It is the thesis of this Article that the positive asso- ciations that comprise a brand-a brand's equity-can rise to the level of a property right entitled separately to protection irrespec- tive of confusion or the existence of a dilution statute. Without more, exploitation of such associations as the principal catalyst for the sale of goods, particularly in a manner that may damage brand equity, should invoke injunctive and monetary sanctions; uses even for the expression of ideas should be carefully delineated. The likelihood of "free ride" or "negative" associations with a mark should equal the likelihood of confusion as a basis for judicial scrutiny. In a commercial context, a solid core of decisions has clearly predicated relief on evidence of negative association: [T]he uniform depicted in "Debbie Does Dallas" unquestionably brings to mind the Dallas Cowboys Cheerleaders. Indeed, it is hard to believe that anyone who had seen defendants' sexually depraved film could ever thereafter disassociate it from plain- tiff's cheerleaders. This association results in confu- sion which has "a tendency to impugn [plaintiffs services] and injure plaintiff's business reputation "3 States enacting dilution statutes include: Alabama, ALA. CODE § 8-12-17 (1993); Arkansas, AR. CODE ANN. § 4-71-113 (Michie 1991); California, CAL. Bus. & PROF. CODE § 14330 (West Supp. 1994); Connecticut, CONN. GEN. STAT. ANN. § 35-11i(c) (West 1991); Delaware, DEL. CODE ANN. tit. 6, § 3313 (Supp. 1993); Florida, FLA. STAT. ANN. § 495.151 (West 1988); Georgia, GA. CODE ANN. § 10-1-451 (Michie 1991); Idaho, IDAHO CODE § 48-512 (Supp. 1993); Illinois, ILL. REV. STAT. ch. 140, 22 (1986); Iowa, IOWA CODE ANN. § 548.11(2) (West 1987); Louisiana, LA. REV. STAT. ANN. § 51:223.1 (West 1987); Maine, ME. REV. STAT. ANN. tit. 10, § 1530 (West 1980); Massachusetts, MASS. GEN. LAWS ANN. ch. 110B, § 12 (West 1990); Missouri, Mo. REV. STAT. § 417.061(1) (1990); Montana, MONT. CODE ANN. § 30-13-334 (1991); Nebraska, NEB. REV. STAT. § 87-122 (1987); New Hampshire, N.H. REV. STAT. ANN. § 350-.12 (1984); New Mexico, N.M. STAT. ANN. § 57-3-10 (Michie 1991); New York, N.Y. GEN. Bus. LAw § 368-d (McKinney 1984); Oregon, OR. REV. STAT. § 647.107 (1988); Pennsyl- vania, 54 PA. CONS. STAT. ANN. § 1124 (Supp. 1994); Rhode Island, R.I. GEN. LAws § 6-2-12 (1992); Tennessee, TENN. CODE ANN. § 47-25-512 (1988); Texas, TEL Bus. & COM. CODE ANN. § 16.29 (West Supp. 1994); Washington, WASH REV. CODE ANN. § 19.77 (West Supp. 1994). ' Dallas Cowboys Cheerleaders, Inc. v. Pussycat Cinema, Ltd., 604 F.2d 200, 205 (2d Cir. 1979) (quoting Coca-Cola Co. v. Gemini Rising, Inc., 346 F. Supp. 1183, 1189 (E.D.N.Y. 1972)). https://digitalcommons.law.uga.edu/jipl/vol1/iss2/2 2 Swann and Davis: Dilution, An Idea Whose Time Has Gone; Brand Equity As Protectabl 1994] BRAND EQUITY [T]he plaintiff has a property interest in the slogan ["Where there's life, there's Bud"], ... and ... the defendant, ... with the purpose of appropriating some of the value engendered in the minds of the public by its use has used.., a deceptively similar slogan ["Where there's life, there's bugs"] in a man- ner that will bring direct financial loss to the plain- tiff ... by reason of the peculiarly unwholesome association of ideas when the word "bugs" was substituted in the slogan for the word "Bud," refer- ring to a food product.4 The evidence indicates that defendant's marks are being associated with the plaintiffs and this associa- tion adversely affects plaintiffs mark.' In each negative association precedent, the court paid lip-service to likelihood of confusion, and the facts bore many characteristics of a strong likelihood of confusion case, e.g., the infringing mark would not have existed but for the genuine article.' Likelihood of confusion itself, however, was attenuated,7 and in the principal 'Chemical Corp. v. Anheuser-Busch, Inc., 306 F.2d 433, 437 (5th Cir. 1962), cert. denied, 372 U.S. 965 (1963). " Original Appalachian Artworks, Inc. v. Topps Chewing Gum, Inc., 642 F. Supp. 1031, 1039 (N.D. Ga. 1986) ("Cabbage Patch Kids" v. "Garbage Pail Kids*). The views of the senior author of this Article with respect to this opinion may be influenced by the fact that he assisted plaintiff's counsel in the matter, and has represented Original Appalachian Artworks in related litigation. The authors or their firm have also had substantive involvement in other actions that are analyzed herein: Anheuser-Busch, Inc. v. L & L Wings, Inc., 962 F.2d 316 (4th Cir. 1992), cert. denied, 113 S. Ct. 206 (1992) (retained after appeal argued); Anheuser-Busch, Inc. v. Pacific Beachwear, Anheuser-Busch, Inc. v. Bargain Beachwear, and Anheuser.Busch, Inc. v. USA Beachwear, Nos. 4:91-1744-2,4:91-1743-2, and 4:91-1742-2 (D.S.C. filed June 17, 1991) (represented plaintiff; settled); General Mills, Inc. v. Johnson, No. 4-93-936 (D. Minn filed Oct. 5, 1993) (represented plaintiff; settled); Rolls- Royce Motors, Ltd. v. A & A Fiberglass, Inc., 428 F. Supp. 689 (N.D. Ga. 1977) (represented plaintiff); DC Comics, Inc. v. Unlimited Monkey Business, Inc., 598 F. Supp. 110 (N.D. Ga. 1984) (represented plaintiff). ' For example, 'Wonder Wench" would not have existed but for "Wonder Woman." See DC Comics v. Unlimited Monkey Business, 598 F. Supp. at 110. ' For example, notwithstanding record sales volumes of both items, evidence of actual confusion in OriginalAppalachian Artworks v. Topps was de minimis, see Amstar Corp. v. Domino's Pizza, Inc., 615 F.2d 252, 263 (5th Cir.) (isolated instances of confusion Published by Digital Commons @ Georgia Law, 1994 3 Journal of Intellectual Property Law, Vol. 1, Iss. 2 [1994], Art. 2 222 J. INTELL. PROP. L. [Vol. 1:219 free ride association case, the court so conceded.8 In both free ride and negative association actions, the common denominator has been the use of the infringed mark as the "trigger- ing mechanism" for the sale of defendant's goods,9 and in each, the court was offended by "a brazen [often detrimental] ... effort by the defendant... to capitalize on the good will created by the... plaintiff."' Given the current economic function and acceptance of trademarks, and recognition of their value and performance in the marketplace, it is submitted that such facts alone should man- date relief whether or not confusion is present. Equally, the right of a trademark owner to protect its brand equity as property must be constitutionally balanced against the right of free speech. insignificant in face of large sales), cert denied, 449 U.S. 899 (1980), and plaintiff's survey showed only association. See OriginalAppalachian Artworks v. Topps, 162 F. Supp. at 1038. See also Coca-Cola Co. v. Gemini Rising, Inc., 346 F. Supp. 1183, 1191 (E.D.N.Y. 1972) ("Even though in this case there is no confusion of goods or passing off in the strict trade- mark sense, there is a sufficiently clear showing of the impairment of plaintiff's mark as a selling device because of defendant's use.").