Congress has enacted new legislation relating to trademark dilution.  Here's a brief article on this development by my partner, Uli Widmaier:

Dilution occurs when third-party uses of a famous mark whittle away its distinctiveness (dilution by blurring) or harm its reputation (dilution by tarnishment). Unchecked, it can quickly destroy the value and commercial magnetism of a famous mark.

Pattishall attorneys spearheaded comprehensive legislation to protect against this insidious harm. On September 25, 2006, their efforts came to fruition when Congress passed the Trademark Dilution Revision Act (H.R. 683). President Bush is expected to sign the Act within the next few weeks. The full text of the Act is set forth below.

Passage of the Revision Act constitutes a significant victory for trademark owners. The Act protects famous marks from uses that are likely to blur their distinctiveness or tarnish their reputation, even in the absence of actual or likely confusion, competition, or economic injury.

I. The Problem

Up to now, trademark owners had to rely either on the ineffective Federal Trademark Dilution Act of 1995 (the "FTDA") or on an uneven and geographically limited patchwork of state laws in order to stop diluting uses of their valuable marks.

As interpreted by in the Supreme Court's 2003 decision in Moseley v. V Secret Catalogue and by several lower courts, the FTDA provides no meaningful protection against dilution. Plaintiffs have to prove actual dilution, and courts require direct rather than circumstantial evidence in many cases. These requirements alone preclude most FTDA claims. Moreover, the FTDA affords no clear protection against tarnishment; several courts have refused to protect famous marks with acquired distinctiveness under the FTDA; and in the Ninth Circuit, even a slight admixture of "expressive elements" to a party's use of a famous mark shields that party from FTDA liability under the "noncommercial use" exemption.

II. Toward a Solution

Pattishall attorneys were at the forefront of the trademark bar's efforts to remedy this situation. When the dilution issue reached the Supreme Court for the first time in 2003 with the V Secret case, Pattishall partners Robert W. Sacoff and Uli Widmaier drafted the "friend of the court" brief submitted by the ABA. The brief's argument, adopted by Justice Kennedy in his concurring opinion, urged the key reforms now reflected in the Revision Act.

In April 2004, Mr. Sacoff testified before Congress in his position as Chair of the Intellectual Property Law Section of the American Bar Association on proposed amendments to the FTDA. Mr. Sacoff recommended amending the FTDA to change its "actual dilution" standard to "likelihood of dilution;" expressly include a claim for dilution by tarnishment; and make famous marks with acquired-distinctiveness clearly eligible for protection against dilution.

In January 2005, Pattishall partners Joseph N. Welch II, representing the American Intellectual Property Law Association, and Jonathan S. Jennings, representing the American Bar Association, met with representatives of the International Trademark Association, and the Intellectual Property Owners Association, to build a consensus for the final language of a bill to revise the FTDA.

The success of that meeting was decisive in hastening the legislation along. Barely one month later, on February 9, 2005, Representative Lamar Smith introduced the text of the agreed-upon draft legislation in the House of Representatives. The bill was passed by the House on April 19, 2005. The Senate made several revisions and passed its version on March 8, 2006. The House adopted the Senate's version on September 25, 2006. Throughout this process, Mr. Jennings, on behalf of the Intellectual Property Law Section of the American Bar Association, helped address numerous revisions sought by telecommunications and search engine companies.

III. The Trademark Dilution Revision Act - Key Provisions

The Revision Act is specifically designed to remedy the FTDA's shortcomings. It accomplishes the following key goals:

• It changes the FTDA's "actual dilution" standard to a "likelihood of dilution" standard. See Section 2(c)(1).
• It permits dilution claims to be proved by circumstantial evidence. See Section 2(c)(2)(B).
• It protects famous marks against dilution by both blurring and tarnishment. See Section 2(c)(2)(B) and (C).
• It uses a common-sense definition of fame that should make it easier to prove fame when a mark is widely recognized throughout the country, while possibly making it harder to prove fame when a mark is recognized only within a niche market.
  See Section 2(c)(2)(A).
• It closes the "noncommercial use" loophole by expressly providing effective safe harbors for fair uses and uses that involve free speech interests. See Section 2(c)(3).

In sum, prior federal dilution law was in disarray, while state dilution law offered little effective help. Congress has now enacted comprehensive legislative reform. The Revision Act constitutes a clear and effective dilution law that promises to give owners of famous trademarks the protection they need.

by Uli Widmaier