Management Forum Blog

Today I am going to discuss Trademark Dilution.  I will explain what it means and how Dilution may or may not affect you as a trademark owner.

Dilution is when another company or individual uses your famous trademark or brand name on a totally unrelated product or service and their use of your trademark “dilutes” the distinctiveness of your product or service.  Dilution can occur even if the unrelated product or services is not competitive or may not cause a likelihood of confusion, i.e., consumers would confuse the two companies’ product or services.  I will explain this concept in the example below:
Your company name is XYZ, Inc. You own a trademark for distributing tech gadgets. You have built a brand name and reputation as a leader in distributing tech gadgets.  However, another company comes along and names their company XYZ, Inc. but they do not sell tech gadgets, they sell street clothing. Although, the products sold are totally unrelated, the consuming public can assume that company XYZ, Inc., which sells tech gadgets, has ventured into the business of selling street clothing.  XYZ, Inc., the tech company, does not want to be known for selling street clothing.  They want to be known as the leader in selling tech gadgets. And of course, XYZ, Inc., the street clothing company, wants to use the XYZ name because they can gain recognition off of the brand name and reputation of XYZ, Inc., the tech company.
The above scenario is how dilution of a brand occurs and why well-known or famous trademarks want to avoid it.

So how does Dilution affect you as a trademark owner or potential trademark owner?

Well the law has recently changed. Now the law heavily favors owners of nationally known or recognized trademarks. Previously, an owner of a famous trademark had to show that a company that adopted their trademark, but sold a totally unrelated product or service, was ACTUALLY diluting their brand. Actual dilution could be shown by economic injury (loss profit or sales) via blurring (consumers began to confuse the two products) or tarnishment (the use of the famous mark by the subsequent company tarnishes the reputation of the famous mark). But actual dilution was hard to prove. Currently under the new law, Trademark Dilution Revision Act (TDRA), the owner of a famous trademark only has to prove is that there is a likelihood of confusion rather than actual economic injury. Trademark Dilution Revision Act (TDRA) This standard is much easier to prove. One way a company can prove a likelihood of confusion is by simply doing customer surveys.

Second, a mark has to be recognized nationally by the general consuming public. TDRA. Previously, a highly distinctive or niche mark was considered famous even if it was only used in a specific geographic region. Now if your mark is famous or well known in the Southeast but not nationally, then you cannot claim dilution by a subsequent mark.

Third, protection from Dilution is still afforded to trademarks that are satires, parodies, or criticisms of a famous mark. TDRA. This is called the fair use doctrine. So the website Perez Hilton, which is a satire or parody of the name, Paris Hilton, is protected from any dilution claim from Paris Hilton.

I want to close out this article with three key points:

1. If your mark is nationally known or recognized, be vigilant in protecting your brand and trademark. The current law is on your side.

2. If you are a potential trademark owner, make sure you do not choose a trademark that is too similar to a nationally recognized trademark. Although you may not offer the same product or service, a company that owns a more famous mark can easily prevent you from using the mark.

3. Parodies or satires are protected. So if you have a website or an idea for a mark that parodies a famous mark, feel free to embark on that journey. Fair use is king!

Latoicha is the founding partner of the firm, Phillips Givens LLC. Her practice includes represention of start-ups, small, and mid-sized businesses in intellectual property matters. Specficially, she provides legal services in the following areas:  trademarks, copyrights, legal issues in new media, and IP licensing. She also writes a law blog entitled IPLAW101 located at www.phillipsgivenslaw.blogspot.com There she provides practical tips for individuals and small businesses in solving basic intellectual property issues.  Latoicha is a frequent speaker on intellectual property issues and has been featured in the Atlanta Tribune Magazine and the Atlanta Journal-Constitution. You can contact Latoicha at lgivens@phillipsgivenslaw.com. Latoicha is also a member of the BPCouncil.

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