Stay Clear of Famous Trademarks

Everyone recognizes famous trademarks. Who is not aware of Microsoft, Rolex, McDonald’s and Coca Cola? The tremendous value in these marks lies in their universal recognition. Because of the renown of famous trademarks, it is not uncommon for smaller businesses to attempt to capitalize on the goodwill of famous marks by associating their goods or services with another’s famous trademark or brand. Recognizing the extent of this problem, Congress enacted the Trademark Antidilution Act of 1995 (“TAA”) to specifically provide enhanced protection for famous trademarks. However, federal courts have been inconsistent in their application of the TAA. Consequently, in order to bring predictability to the protection of the most famous trademarks, the Trademark Dilution Revision Act of 2006 (“TRDA”) became law on October 6, 2006.

Under the TRDA, trademark dilution includes acts which result in “blurring” or “tarnishment” of famous trademarks. Blurring involves unauthorized use of a mark that is identical or confusing similar to a famous trademark in connection with unrelated goods and services. Left unchecked, these competing uses tend to erode the distinctiveness of the famous mark. According to the TRDA, courts can now consider several factors to analyze whether a defendant’s use is likely to cause dilution by blurring. Such factors were not provided for in prior statutes such as the TAA. The non-exclusive factors include: the degree of similarity between the competing mark and the famous mark, the degree of inherent or acquired distinctiveness of the famous mark, the extent that the owner of the famous mark is engaging in substantially exclusive use, the degree of recognition of the famous mark by the public, whether the user of the competing mark intended to create an association with the famous mark, and whether there is an actual association between the competing mark and the famous mark.

Tarnishment of a famous mark occurs when the same or similar marks is used in association with goods or services of inferior quality or in an unsavory context that cast the famous mark in an unfavorable light. A determination of tarnishment is somewhat more qualitative in nature and is based on the totality of factual circumstances surrounding the competing use.

The TRDA reduces the standard of proof for plaintiffs by requiring that famous brand owners merely show a “likelihood of dilution” as opposed to “actual dilution.” That is, the owner of the famous mark does not have to show that it has suffered monetary harm as a result of the offending use.

The TRDA makes it clear that dilution is only to be applied to the most famous trademarks. The definition of a famous mark is now narrowed to include marks that are widely recognized by the general consuming public of the United States. In the past, dilution law was difficult to apply based on conflicting methodologies for determining how famous a mark should be, how different the competing mark should be and what geographic territory was needed to encompass the mark’s fame. The TRDA applies to dilutions that existed before the Act came into being as well as violations occurring after its adoption, although monetary damages can only be recovered for unauthorized uses occurring after the Act became law.

The TRDA contains certain fair use defenses for advertising, promotion and other purposes. These uses allow consumers to compare goods and permit uses that identify, parody, criticize or comment on a famous mark owner or their goods or services. However, advice of legal counsel should be sought before adopting any trademark that might suggest association with a well-known trademark or brand.

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