Trademark dilution occurs when an inherently distinctive trademark, such as a fanciful or arbitrary trademark, is used on unrelated goods or services.
Unlike likelihood of confusion trademark cases, trademark dilution allows standing to owners of famous trademarks to prevent others from using their trademark in a way that would lessen the trademark’s uniqueness regardless of how closely related the goods or services are. For example, if a company used the name GOOGLE for a hardware store, there is no likelihood of confusion between the hardware store and Alphabet Inc.’s GOOGLE search engine. However, the store’s name dilutes the famous GOOGLE trademark because it makes the GOOGLE name less unique.
Under current laws, only famous trademarks are protected under trademark dilution laws.
Trademark dilution can also occur by a trademark owner diluting their own trademark. An example of this would be a brand such as COCA-COLA using the COKE brand and name on other beverage products like orange juice or other flavor sodas. One of the reasons the COCA-COLA trademark is so powerful and unique is that it is so closely identified with one product. Companies should be weary of diluting their own trademarks because it makes them less unique to consumers.
The concept of trademark dilution first appeared in a 1927 Harvard Law Review article written by Frank Schechter. Schechter argued that inherently distinctive trademarks lose their uniqueness and their selling power when other companies use them in unrelated fields of goods or services. At the time he saw a company called KODAK BATHTUBS as diluting and hurting the fanciful KODAK brand for cameras. For years, his argument was received with hostility by courts when brands put it forward in trademark infringement cases but over time this shifted and courts began giving more protection to famous trademarks on trademark dilution grounds.
For his treatise The Historical Foundations of the Law Related to Trade-Marks and his Harvard Law Review article advocating for trademark dilution protection, Frank Schechter was inducted into the Intellectual Property Hall of Fame.
In 1995, Congress passed the Federal Trademark Dilution Act to provide the owners of famous trademarks from trademark dilution. Congress stated the harm caused by dilution is “ the lessening of the capacity of a famous mark to identify and distinguish goods or services, regardless of the presence or absence of … likelihood of confusion, mistake, or deception.” To prevent this harm and harmonize 50 states into one single standard of what trademark dilution is, Congress felt it necessary to pass the Federal Trademark Dilution Act to make a single national standard.
When interpreting whether or not trademark dilution has occurred, a court will look at many factors, but the most important ones the court will focus on are:
The similarity between the trademark and the famous trademark;
The inherent or acquired distinctiveness of the famous trademark;
How exclusively used the famous trademark is used;
The degree of recognition of the famous trademark;
Whether the alleged trademark diluter intended to create an association of the famous trademark; and
Any actual association between the two trademarks.
Preventing trademark dilution is important for any brand but at the moment, the law only protects famous trademarks. Schechter’s original article on trademark dilution argued that trademark dilution should protect any inherently distinctive trademark and not just famous trademarks. Do you agree with Schechter and any inherently distinctive trademark should receive trademark dilution protection or only famous trademarks? Leave your thoughts in the comments below or contact us.