Dilution of Famous Trademarks

Famous

Part 1 of this series about famous marks discussed the well-known marks doctrine. This post discusses trademark dilution.

Famous Brands and Dilution

Owners of famous marks can prevent others from using marks that “dilute” the famous mark under federal law. See 15 U.S.C. § 1125(c). Prior to 1996, trademark owners relied on state laws that may or may not have provided protection from dilution. In contrast to trademark infringement, trademark dilution may occur regardless of actual or likely confusion, competition or economic injury.

So how famous is famous? The short answer is: really famous. Early case law under the federal dilution statute recognized marks that achieved fame in a particular niche market as “famous.” But niche fame is no longer sufficient under federal dilution law. Essentially, the mark must enjoy nationwide fame and renown.

According to the statute, a mark is “famous” when it is “widely recognized by the general consuming public of the United States as a designation of source of the goods or services of the mark’s owner.” The statute also suggests certain factors courts may consider to determine whether a mark attained fame, including: (1) the duration, extent, and geographic reach of advertising and publicity of the mark, whether advertised or publicized by the owner or third parties; (2) the amount, volume, and geographic extent of sales of goods or services offered under the mark; and (3) the extent of actual recognition of the mark.

I’m Not Confused, But You’re A Little Blurry

Trademark dilution does not require a likelihood of consumer confusion. Instead, dilution happens by “tarnishment” or “blurring.” We’ll save dilution by tarnishment for another day and focus on dilution blurring.

Dilution by blurring is the gradual diminishment in the public’s perception of a famous mark’s ability to clearly signify a unique, singular or particular source. The classic case of dilution by blurring involves an unrelated product adopting a famous name or trademark as its own – DuPont shoes, for example. The federal statute lists six factors to help determine dilution by blurring: (1) the degree of similarity between defendant’s mark and the famous mark; (2) the distinctiveness of the famous mark; (3) whether the famous mark’s owner has substantially exclusive use of the mark; (4) the degree of recognition of the famous mark; (5) whether the defendant intended to create an association with the famous mark; and (6) actual association between the defendant’s mark and the famous mark.

Fame and Parody: You Mock Me!

The statute also provides exceptions as to what may constitute dilution. One of these exceptions is fair use, which includes “identifying and parodying, criticizing, or commenting upon the famous mark owner or the goods or services of the famous mark owner.” Parody is communicating some element of satire, ridicule, joking or amusement by juxtaposing an irreverent representation of a trademark with the idealized image created by the mark’s owner.

Not surprisingly, dilution and parody present a unique challenge for famous mark owners. Indeed, fame and recognition can make it less likely that a third party’s use of parody will impair the distinctiveness of a famous mark. A good example is luxury brand Louis Vuitton, which has had its fair share of parody woes.

In the Haute Diggity Dog case, Louis Vuitton brought an unsuccessful dilution claim against a pet toy company’s use of the famous Louis Vuitton mark in connection with a line of stuffed pet toys, which parody high-end brands of products such as perfume, shoes, jewelry and handbags. In addition to the Louis Vuitton parody, the pet toys included Chewnel No. 5 (Chanel No. 5), Jimmy Chew (Jimmy Choo), Sniffany & Co. (Tiffany & Co.), and Dogior (Dior).

Haute Diggity Dog’s parody consisted of a stuffed toy in the shape of a handbag, which used “Chewy Vuiton” instead of Louis Vuitton, and a CV logo instead of the LV logo. The court concluded that Haute Diggity Dog’s use of the “Chewy Vuiton” mark was a successful parody that separated itself from the Louis Vuitton marks in order to make fun of them and, therefore, did not blur the distinctiveness of the famous Louis Vuitton mark.

Trademark Dilution and The First Amendment

Louis Vuitton made other trips to court over parody marks. Most recently, a federal district court in New York rejected its trademark dilution claims against handbag company My Other Bag (MOB) because MOB’s reference to the famous mark constituted parody protected by fair use.

MOB sells bags that on one side say “My Other Bag . . . .” and on the other a design similar to the famous Louis Vuitton logo design. MOB sells bags using other luxury brands’ designs, not just Louis Vuitton.

Similar to the court’s analysis in Haute Diggity Dog, the MOB court noted that a successful parody communicates to the consumer that an entity separate and distinct from the famous trademark owner is poking fun at the famous mark or its owner. A parody thus conveys two simultaneous, but contradictory, messages that it is the famous mark but also that it is not the famous mark. Thus, the mere fact that consumers will associate the MOB bag with Louis Vuitton does not mean that dilution by blurring will occur. The question is whether the kind of association MOB creates is likely to impair the distinctiveness of the famous marks.

The MOB court focused on the “joke” inherent in the MOB bags, noting that LV’s sense of humor (or lack thereof) does not delineate the parameters of its rights under trademark law, and advising that “in some cases it is better to accept the implied compliment in a parody and to laugh than it is to sue.”

Louis Vuitton Fights On

Louis Vuitton appealed the MOB decision to the Second Circuit Court of Appeals. A group of law professors filed an amicus (“friend of the court”) brief in support of MOB which argued, among other things, that the application of dilution law to parody is an unconstitutional content-based restriction on non-misleading commercial speech.

In its August reply brief, Louis Vuitton asserted that the case has “never been about any supposed ‘artistic’ activity by MOB” and added that it is not “a watershed First Amendment moment that the crusading law professor amici would have the court believe.”

Together with the Supreme Court’s recent decision to review the Slants case, this appeal makes plain that the intersection of the First Amendment and trademark law is an issue to watch.

Photo credit: Soupstance, used under a creative commons license.

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