Trademark Dilution, Part 1 [1]

By Olivier Taillieu
This article is for non-lawyers, or attorneys practicing in areas of law other than trademark law, seeking to familiarize themselves with the basics of trademark dilution. This article is Part I of a three part series.

Introduction

Trademark law has evolved to give what is, in essence, a quasi-property right in a "word, name, symbol or device" that identifies and distinguishes one person's goods (or services) from those of another. 15 U.S.C. § 1127. The justification for this is twofold. First, to protect the public from confusion or deception about who is the source of a given product or, in the case of a service mark, a given service. Second, to protect a business's investment in the goodwill in the mark.

Enforcement of such "right" typically takes one of two forms: "Infringement" or "dilution." Laws barring trademark "infringement" seek to protect the first interest. They focus on whether consumers are likely to be confused by the public use of two similar marks. Conversely, laws governing "dilution" seek to protect the second interest. In so doing, dilution jurisprudence focuses on whether the owner's investment in a mark has been lessened or diminished when someone a third party uses a similar identifier. Put another way, it protects from a "free riding on the investment" the trademark holder has made. I.P. Lund Trading ApS v. Kohler Co., 163 F.3d 27, 50 (1st Cir. 1998).

Trademark Dilution is a Cause of Action in its Own Right

Trademark dilution is not a mere fallback position for an unsuccessful someone who was not able to prove infringement plaintiff. 4 McCarthy on Trademarks and Unfair Competition § 24:70 (4th ed.) (citing 15 U.S.C. § 1127, and Playboy Enterprises, Inc. v. Netscape Communications Corp., 55 F. Supp. 2d 1070 (C.D. Cal. 1999)). Rather, it is a distinct wrong and, therefore, a distinct cause of action.

The First Circuit explained this distinction rather eloquently in I.P. Lund Trading ApS v. Kohler Co.:

[I]f a cocoa maker began using the "Rolls Royce" mark to identify its hot chocolate, no consumer confusion would be likely to result. Few would assume that the car company had expanded into the cocoa making business. However, the cocoa maker would be capitalizing on the investment the car company had made in its mark. Consumers readily associate the mark with highly priced automobiles of a certain quality. By identifying the cocoa with the Rolls Royce mark, the producer would be capitalizing on consumers' association of the mark with high quality items.

Moreover, by labeling a different product "Rolls Royce," the cocoa company would be reducing the ability of the mark to identify the mark holder's product. If someone said, "I'm going to get a Rolls Royce," others could no longer be sure the person was planning on buying an expensive automobile. The person might just be planning on buying a cup of cocoa. Thus, the use of the mark to identify the hot chocolate, although not causing consumer confusion, would cause harm by diluting the mark.

Mr. Taillieu is a partner in the litigation department of Zuber & Taillieu LLP (http://www.zuberlaw.com). He earned his J.D. with highest honors from George Washington University School of Law, where he graduated #1 in the day class and was Managing Editor of the Law Review.

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