II. Trademark Dilution Revision Act

The Trademark Dilution Revision Act (“TDRA”) became effective on October 6, 2006, a little more than a decade after the first federal dilution statute, the FTDA, became law.69 The TDRA fulfilled its mission of resolving many of the FTDA's ambiguities.70 Much recent federal legislation has tipped the intellectual property balance in favor of intellectual property owners, shrinking the public domain and public access rights.71 One of the most striking features about the new act is that although it broadens dilution claims in some ways, it recreates dilution as a luxury claim available only to the most famous marks. The TDRA also provides broader fair use defenses.

The TDRA resolved the FTDA's ambiguities about the scope of dilution, by specifying that both dilution by blurring and dilution by tarnishment may be the subject of a claim. The TDRA then defines each cause of action:

“Dilution by blurring” is association arising from the similarity between a mark or trade name and a famous mark that impairs the distinctiveness of the famous mark.

“Dilution by tarnishment” is association arising from the similarity between a mark or trade name and a famous mark that harms the reputation of the famous mark. 72

This clarification arguably broadens the potential scope of federal dilution law, because the door to dilution by tarnishment claims, shut by the Supreme Court in Moseley, is now wide open. Whether this addition to the statute turns out to make a difference in practice is another question, and one that will be exceedingly interesting to watch as it evolves. As discussed below, the actual power of this claim is likely to be a function of the way courts interpret the broad defenses that come later in the statute.

The TDRA relegated Moseley to a wrong turn73 on the path of trademark legal history by lowering the burden of proof from actual dilution to a likelihood of dilution.74 Because the harm created by dilution occurs over time as a result of multiple consumer experiences, the evidence that would satisfy even this lower burden will require skill and substantial cost to assemble.75 “[U]nlike a bandaged thumb or a shattered light bulb, a diluted trademark's appearance does not change after the injury.”76 Harm to reputation and to distinctiveness is difficult to measure from visual inspection. In order to assess this harm, cultural perceptions of trademarks will take on greater importance.77

The lowered burden of proof and the broadened definition may be viewed as significant expansions of federal dilution claims, but these expansions will be counter-balanced by the TDRA's changes affecting the type of mark that may be the subject of a federal dilution claim. Although the FTDA did not expressly limit trademark rights to inherently distinctive marks, the Act was vague enough that the Second Circuit read this limitation into the statute.78 The TDRA clarifies that any “famous mark that is distinctive, inherently or through acquired distinctiveness” may be the subject of a dilution claim.79 Yet, the degree of distinctiveness remains one of the factors relevant to a determination of dilution by blurring.80

A second, more important change can be seen in the substantially narrower definition of fame articulated in the TDRA. Like the FTDA, the TDRA requires that a mark must be “famous” before its owner can assert a federal dilution claim. However, this bar has much more meaning in the TDRA. The FTDA identified fame as a requirement, but listed the degree of consumer recognition of the mark as only one of eight factors that may be considered to establish fame.81

Under the TDRA, only those who own marks that are “widely recognized by the general consuming public of the United States”82 may assert federal dilution claims. This change will end dilution as a remedy for marks not known outside of specialized “niche” markets.83 For example, although virtually every lawyer or law student would recognize the trademarks BARBRI and PMBR, the general consuming public is less likely to be familiar with these marks.84 Under the FTDA, they would have been sufficiently famous to support a dilution claim because they are so well known in the legal market. Under the new TDRA standard, it would be much more difficult to prove that these marks are “widely recognized by the general consuming public.”85 By changing the definition of what qualifies as a “famous” mark, the TDRA enacted a significant gate-keeping device that is likely to reduce the number of marks that are strong enough to meet this new definition of “fame.”

After enactment of the FTDA (but perhaps to a lesser extent after Moseley was decided), dilution claims were routinely added on to federal trademark infringement complaints.86 If the likelihood of confusion analysis seemed to be a close call, especially if the parties' products were sold in different markets, a dilution count often would be included if the mark was arguably famous to any identifiable group. Even Anne Gundelfinger, the President of the International Trademark Association conceded that dilution protection was not meant to be this broad.87 She explained in testimony before Congress, “[d]ilution protection was never meant for the average trademark. It was intended to provide extraordinary protection for extraordinary marks.”88 The TDRA's heightened threshold for fame will change dilution practice dramatically, because only marks that are well known to the general public will be proper subjects for federal dilution claims.

This definitional change has tremendous significance. Consumer recognition of the mark is no longer one factor in determining fame.89 It is a requirement. The definition on its face recognizes that fame comes from more than years of use and a large advertising budget. It is also a result of many consumer conversations. Fueled by globalization and the Internet economy, the potential value of trademarks is increasing dramatically.90 The potential for quick fame has also increased. The YouTube phenomenon demonstrates that in cyberspace, fame sufficient to meet the TDRA definition may be acquired in less than two years.91 Federal law will protect marks from dilution only if the trademark has become well integrated into our national consciousness. Federal dilution has become a luxury claim, rewarding trademark owners for becoming so deeply integrated into our culture that their marks have meaning to the general public. The statute also rewards the public by protecting the meaning of symbols we choose to make prominent in cultural discourse.

The TDRA also may be viewed as fuel for consumer and competitive discourse because it articulated relatively broad fair use provisions. The fair use amendments were intended to “more clearly protect traditional [F]irst [A]mendment uses, such as parody and criticism . . . [and to] balance . . . the law by strengthening traditional fair-use [sic] defenses.”92 A decade earlier, the FTDA created trademark infringement defenses for identification of marks in advertising and promotion, noncommercial use, news reporting and news commentary.93 The TDRA broadened this provision to include “any fair use, including nominative or descriptive fair use identifying and parodying, criticizing, or commenting upon the famous mark owner or the goods or services of the famous mark owner.”94 In doing so, the TDRA became the first federal statute to codify exclusions for several unauthorized uses courts consider to be fair. One interesting trend to watch will be how frequently the 1125(c)(2)(C)(3)(A)(ii) exclusions succeed in defeating federal dilution claims.

The interpretation of the parody exclusion should be especially interesting because one person's parody is likely to be grounds for a trademark owner's dilution by tarnishment claim. The following section explores this potential conflict through a case study of Louis Vuitton Malletier S.A. v. Haute Diggity Dog, LLC.95 If this first decision to analyze the TDRA's parody exemption is upheld and proves to be influential, its reasoning may minimize the power of dilution as a viable claim in similar contexts.96