Owners of Famous Trademarks Must Prove “Actual Dilution” in Federal Trademark Dilution Act Claims

10/01/2003

Introduction

On March 4, 2003, the United States Supreme Court issued its unanimous decision, written by Justice John Paul Stevens, regarding the Federal Trademark Dilution Act (“FTDA”). The FTDA is a 1995 Amendment to the Trademark Act of 1946 and states that:

the owner of a famous mark shall be entitled, subject to the principles of equity and upon such terms as the court deems reasonable, to an injunction against another person’s commercial use in commerce of a mark or trade name, if such use begins after the mark has become famous and causes dilution of the distinctive quality of the mark, and to obtain such other relief as is provided in this subsection.

To determine whether a mark is distinctive and famous, a court may consider factors such as, but not limited to:

(A) the degree of inherent or acquired distinctiveness of the mark;

(B) the duration and extent of use of the mark in connection with the goods or services with which the mark is used;

(C) the duration and extent of advertising and publicity of the mark;

(D) the geographical extent of the trading area in which the mark is used;

(E) the channels of trade for the goods or services with which the mark is used;

(F) the degree of recognition of the mark in the trading areas and channels of trade used by the marks’ owner and the person against whom the injunction is sought;

(G) the nature and extent of use of the same or similar marks by third parties; and

(H) whether the mark was registered under the Act of March 3, 1881, or the Act of February 20, 1905, or on the principal register.

The FTDA defines “dilution” as “the lessening of the capacity of a famous mark to identify and distinguish goods or services, regardless of the presence or absence of (1) competition between the owner of the famous mark and other parties, or (2) likelihood or confusion, mistake, or deception.”  Due to uncertainty about how to prove the element “causes dilution” under the FTDA,  the parties in Moseley d/b/a Victor’s Little Secret v. V Secret Catalogue, Inc., et al.,  asked the Supreme Court to determine whether the FTDA requires a showing of (i) actual dilution; or (ii) a likelihood of dilution.

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