11 April 2008

Trademark Dilution Explained

Everything you ever wanted to know about the law of the trademark dilution in the United States can be found at the online proceedings of a recent conference on the topic.

Trademark dilution is a concern because on its face it is a very broad prohibition on free speech, so its limitations, such as a use requirement are critical:

Unlike traditional trademark infringement – in which confusion over source or sponsorship lies at the heart of the claim – dilution turns on murkier concepts of “blurring” and “tarnishment” that do not on their face depend on consumer perceptions as to the source of a defendant’s product. Dilution, moreover, does not involve deceptive or confusing speech, or any “fraud on the consuming public.” As a result, a broad, open-ended dilution statute could target any unauthorized use of a famous trademark, almost without limitation.

Dilution by tarnishment, which is use of a trademark not otherwise infringing which gives a trademark a negative association commercially, is problematic from a free speech perspective.

Tarnishment is defined as a third party use that creates an association that “harms the reputation of the famous mark.” Although this clarifies that dilution by tarnishment is indeed actionable, the definition is hardly self-limiting, a feature that has always made tarnishment potentially overbroad. And the lack of any articulated theoretical basis for tarnishment means that courts cannot infer limits by providing a purposive gloss to the definition. Instead, courts seeking to cabin the tarnishment cause of action will likely rely on the revised affirmative defenses or develop a trademark use requirement (discussed below). A theoretical basis for those defenses does exist (e.g., free speech values), even if their application is often contested.

The 2006 statutory reform of trademark dilution does include, at least, a statutory fair use defense.

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