United States: The Federal Circuit Narrows the Scope of the Federal Dilution Act

The U.S. Court of Appeals for the Federal Circuit has now construed the Federal Dilution Act in a manner that limits the usefulness of the Act to a famous trademark owner. Enterprise Rent-A-Car Co. v. Advantage Rent-A-Car, Inc., 2003 U.S. App. LEXIS 10760 (Fed. Cir. May 2003).

Enterprise Rent-A-Car (Enterprise) owns the famous slogan PICK THE COMPANY THAT PICKS YOU UP for rental car services. Advantage Rent-A-Car (Advantage) applied for the slogan WE’LL EVEN PICK YOU UP for the same services. Enterprise opposed registration of Advantage’s slogan based on the Federal Dilution Act. The Trademark Trial and Appeal Board dismissed the opposition because Advantage has made limited use of its slogan before Enterprise’s slogan had become famous.

The Federal Circuit affirmed. The Court observed that the Dilution Act provides that the owner of a famous mark is entitled to relief against the use of a diluting mark provided that such diluting use "begins after the mark has become famous." Relying on the legislative history of the Dilution Act, the Court held that any use in commerce -- no matter how geographically remote or restricted, will defeat a federal dilution claim. According to the Court, the prior use contemplated by the Act includes any use whatsoever, and is not limited to the use being challenged by the famous trademark owner. As the Court put it, "any prior use, even in a limited geographic area, defeats an injunction under [the Federal Dilution Act], and therefore bars a claim of dilution as a ground for opposition under [the Federal Dilution Act]."