Federal dilution law provides owners of famous trademarks powerful protection against junior users of certain marks. While infringement law protects trademark owners against marks that are likely to lead to consumer confusion, dilution law protects the distinctiveness and reputation of famous marks. For example, the use of PEPSI in connection with construction equipment is not likely to confuse customers as to the source of that equipment. The unique association between PEPSI and soda, however, is likely impaired through the use of PEPSI in connection with other goods (known as dilution by blurring). If PEPSI were used in connection with adult entertainment products, the association between PEPSI and such products may harm the reputation of PEPSI (known as dilution by tarnishment). Federal dilution law aims to protect these unique and positive associations, even in the absence of consumer confusion. It marks a shift in trademark theory from protection against consumer confusion to protection from misappropriation.
In dilution by blurring claims, courts have historically required a showing that the famous mark and allegedly diluting mark are "identical or nearly identical." Courts have treated substantial similarity—a judicially created standard—as a threshold showing in dilution by blurring claims. This threshold showing has posed a significant limitation on such claims and has made it easier for third parties to avoid liability by using marks that are similar, but not "identical or nearly identical" or "substantially similar," to the famous mark. Courts have continued to apply the "identical or nearly identical" standard following passage of the Trademark Dilution Revision Act ("TDRA") in 2006, which identifies a number of non-exhaustive factors to be assessed in determining dilution by blurring, including "degree of similarity."
Earlier this year, the Ninth Circuit, in Levi Straus & Co. v. Abercrombie & Fitch Trading Co., 633 F.3d 1158 (9th Cir. 2011), removed the "identical or nearly identical" standard from its dilution by blurring analysis, joining the Second Circuit (Starbucks Corp. v. Wolfe's Borough Coffee, Inc., 588 F.3d 97 (2nd Cir. 2009)) in holding that the standard did not survive Congress's adoption of the TDRA in 2006. The Ninth Circuit held that among the list of statutory factors for assessing dilution by blurring is the "degree of similarity" between the marks. The plain language of the dilution statute, therefore, does not require a plaintiff to establish that the allegedly diluting mark is identical, nearly identical or substantially similar to the famous mark. Rather, a plaintiff must show, based on an analysis of all the statutory factors, including "degree of similarity," that the junior mark is likely to impair the distinctiveness of the famous mark.
Recently, the United States Trademark Trial and Appeal Board—the chief venue for disputes over the registerability of trademarks—also abandoned the "identical or nearly identical" standard. Citing the Ninth Circuit's decision in Levi Strauss and the Second Circuit's decision in Starbucks, the TTAB also found that, based on the plain language of the dilution statute, the standard did not survive the passage of the TDRA in 2006. See Nike, Inc. v. Maher, 100 USPQ2d 1018 (TTAB 2011).
These decisions represent a significant change in federal dilution law (at least in the Second and Ninth Circuits, the TTAB, and likely other courts in the future) and should provide trademark owners greater protection for their famous trademarks. Third parties that use variations of famous marks cannot shield themselves from liability by using a mark that is similar, but not "identical or nearly identical," to the famous mark. Moreover, the "identical or nearly identical" standard no longer usurps the dilution statute's multi-factor approach for assessing dilution by blurring claims. The shift away from the "identical or nearly identical" standard should make it easier for owners of famous trademarks to pursue dilution by blurring claims against users of diluting marks.
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