The New Wild West: Measuring and Proving Fame and Dilution under the Federal Trademark Dilution Act

Article excerpt

INTRODUCTION

The passage of the Federal Trademark Dilution Act of 1995 (the Dilution Act or Act) has been widely celebrated, as evidenced by the number of related articles, speeches and symposia.(1) Commentators who applauded the adoption of the Dilution Act believed that a dilution claim would now be easier to prove by trademark owners against diluters because trademark owners would not have to establish the troublesome factual issue of consumer confusion.(2) The courts have embraced the Act, and it has already proven to be an effective weapon for trademark owners.(3) One court has even suggested trademark owners asserting claims of dilution bear a lighter burden than that required under section 43(a) of the Lanham Act because they do not have to demonstrate competition between the owners and the diluters or a likelihood of confusion as to the source of the products or services.(4)

As three years have gone by since the Act first went into effect, it has become clear that proving dilution under the Act is not as easy as many had previously thought. Indeed, the Fourth Circuit, in Ringling Bros.--Barnum & Bailey Combined Shows, Inc. v. Utah Division of Travel Development,(5) has recently begun an open season in the Wild West of dilution land by requiring proof of actual economic harm to the famous mark's selling power.(6)

The problems encountered by trademark owners attempting to pursue a dilution claim are inherent in the Act itself. The Act provides no concrete guidance on how fame and dilution should be measured or proven.(7) This limitation has led judicial interpretation of the Act to a new Wild West where courts confront the task of measuring fame and dilution without the benefit of any criteria for making such measurements.(8) In analyzing the Act, no court has provided a cut-off percentage for finding fame and/or dilution under either the likelihood of dilution or actual dilution standard. As a result, a wasteland of case law has developed with cases that either superficially(9) or erroneously(10) analyze dilution claims or avoid the dilution issue altogether by finding trademark infringement under the traditional theory of likelihood of confusion.(11) Consequently, trademark owners who wish to assert dilution claims are faced with the harsh reality that, despite all the fanfare about the passage of the Act, getting protection under the Act is difficult, given the current inconsistent and incoherent jurisprudence addressing the measurement and proof of fame and dilution.(12)

This Article will attempt to conquer that new Wild West. Section I provides an overview of the Act, explains two traditional theories of dilution--tarnishment and blurring--and discusses the new diminishment theory of dilution recognized by courts in cases involving domain names on the Internet.(13) Section II explores the limitations of the Act.(14) Section III examines four authoritative cases that have addressed quantitative measurements of fame and/or dilution, and discusses the shortcomings in each case with regard to quantitative measurements.(15) Section IV suggests a new approach to measuring and proving fame and dilution.(16) This Article concludes with the assertion that this proposed approach would arm trademark owners with certainty in navigating the new Wild West of dilution claims analysis under the Dilution Act.(17)

I. OVERVIEW OF THE FEDERAL DILUTION ACT OF 1995

Fifty years after the enactment of the first state anti-dilution statute, the 1996 Federal Trademark Dilution Act went into effect.(18) The Act amended the existing federal Trademark Act of 1946, commonly known as the Lanham Act.(19) The new Act provided the owner of a famous trademark injunctive relief against unauthorized use of a mark that dilutes the distinctive quality of the famous mark.(20) The Act, signed into law by President Clinton on January 16, 1996, specifically amended section 43 of the Lanham Act, by adding the following subsection:

   The owner of a famous mark shall be entitled, subject to the principles of
   equity and upon such terms as the court deems reasonable, to an injunction
   against another person's commercial use in commerce of a mark or trade
   name, if such use begins after the mark has become famous and causes
   dilution of the distinctive quality of the [famous] mark. …