Trademark Dilution
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Trademark Dilution

Trademark dilution is a relatively new concept in trademark law. Companies that have established a monopoly position in the marketplace naturally would like to preserve that monopoly as much as possible and that is the right of any company to do. That is what free enterprise is all about, companies doing what is best for them. Generally the buying public is not served well by the existance of domination in the marketplace by one or just a small number of companies. The United States, mindful of the negative effect on competition from the anti-competitive practices and behavior from monopolies, has established measures and laws that are to lessen the negative influence on competition by monopolies. These laws are generally called AntiTrust laws or competition laws that are mainly designed for purposes of consumer protection. Trademark dilution may weaken monopoly of a business owning such a trademark. This is good for consumers and not so good for the businesses whose trademarks are being diluted. What is surprising then is that around 1995 large corporations were quite successful in persuading the United States government to enact laws that would strengthen their monopolies and keep small companies from benefitting from diluting the trademarks of the larger companies.

). The famous U.S. Supreme Court Justice Oliver Wendell Holmes observed years ago that “[a] trademark does not confer a right to prohibit the use of the word or words  . . . [by others] . . . . A trademark only gives the right to prohibit the use of it so far as to protect the owner’s goodwill against the sale of another’s product [or service] as his.” (See Annex (C)).This means that if I were to sell a product or service labeled with the trademark of another affixed to a product or service or written as part of, or mentioned in, the sales transaction as being the trademark holders product but where that product or service is not of the trademark holder's manufacture or offered services, that such use of the trademark is in violation of trademark law. Conversely, if I were to use another's trademark in promoting or advertising a product other than produced or a service other than rendered by such trademark holder while not claiming it to be a product or service rendered by the trademark holder, that such use is permitted by law. Such legal use of a trademark is additionally strengthened and re-affimed by the court decision in Geico v.Google:

Google wins in trademark suit with Geico
Published: December 15, 2004, 10:40 AM PST
By Stefanie Olsen
Staff Writer, CNET

update Google scored a big legal win Wednesday when a federal judge ruled that its use of trademarks in keyword advertising is legal.

Judge Leonie Brinkema of the U.S. District Court for the Eastern District of Virginia granted Google's motion to dismiss a trademark-infringement complaint brought by Geico. The insurance company had charged Google with violating its trademarks by using the word "Geico" to trigger rival ads in sponsored search results. Geico claimed the practice diluted its trademarks and caused consumer confusion.

The judge said that "as a matter of law it is not trademark infringement to use trademarks as keywords to trigger advertising," said Michael Page, a partner at Keker & Van Nest, which represented Google.

Brinkema ended the trial Wednesday to issue a formal opinion on the matter. She also asked Google and Geico to settle a dispute over the use of Geico's marks in text of rival ads appearing on the search engine's site.

The ruling is a triumph for Google in that it derives as much as 95 percent of its advertising revenue from keyword-triggered ads, which appear next to Web search results. Trademarks play a central role to the sale of such ads because people often use Web search to find products and services with common, trademarked brand names such as Nike or Geico.

The ruling also could inform similar trademark-infringement cases online, legal experts say. For example, Google is being sued by American Blind and Wallpaper for trademark infringement by its keyword ad program.

"This could be a significant change in trademark law, making it harder for trademark owners to enforce their marks in an online context," said Terry Ross, an attorney at Gibson Dunn.

Trademark dilution

From Wikipedia, the free encyclopedia


Trademark dilution is a trademark law concept forbidding the use of a famous trademark in a way that would lessen its uniqueness. In most cases, trademark dilution involves an unauthorized use of another's trademark on products that do not compete with, and have little connection with, those of the trademark owner. For example, a famous trademark used by one company to refer to hair care products, might be diluted if another company began using a similar mark to refer to breakfast cereals or spark plugs. Trademark law is generally focused on the need for consumer protection.

Consequently, trademark law traditionally concerned itself with situations where an unauthorized party sold goods that are directly competitive with or at least related to those sold by the trademark owner. However, in many jurisdictions the concept of dilution has developed recently to protect trademarks as a property right, securing the investment the trademark owner has made in establishing and promoting a strong mark. The concept of dilution is much newer than the rest of trademark law; only in the mid-1990s did the United States enact a law against trademark dilution, although various states had begun adopting such laws shortly after World War II, and the idea was floated in academic writing as early as the late 1920s.

A trademark is diluted when the use of similar or identical trademarks in other non-competing markets means that the trademark in and of itself will lose its capacity to signify a single source. In other words, unlike ordinary trademark law, dilution protection extends to trademark uses that do not confuse consumers regarding who has made a product. Instead, dilution protection law aims to protect sufficiently strong trademarks from losing their singular association in the public mind with a particular product, perhaps imagined if the trademark were to be encountered independently of any product (i.e., just the word Pepsi spoken, or on a billboard).

The strength required for a trademark to deserve dilution protection differs among jurisdictions, though it generally includes the requirement that it must be distinctive, famous, or even unique. Such trademarks would include instantly recognizable brand names, such as Coca Cola, Kleenex, Cool-Aid, or Sony, and unique terms that were invented (such as Exxon) rather than surnames (such as Ford) or ordinary words in language. Some jurisdiction require additional registration of these trademarks as defensive marks in order to qualify for dilution protection.

Another way of describing the necessary strength of a trademark may establish some basis for dilution protection from a consumer confusion standpoint. Truly famous trademarks are likely to be seen in many different contexts due to branching out or simple sponsorship, to the extent that there may be very few markets, if any, that a consumer would be surprised to see that famous trademark involved in. A prime example may be the past involvement of Coca-Cola in clothing lines.

Dilution is sometimes divided into two related concepts: blurring, or essentially basic dilution, which "blurs" a mark from association with only one product to signify other products in other markets (such as "Kodak shoes"); and tarnishment, which is the weakening of a mark through unsavory or unflattering associations. Not all dilution protection laws recognize tarnishment as an included concept.

Prior to specifically targeted laws being adopted, dilution protection was used in some jurisdictions to attack domain name infringement of trademarks (see Cybersquatting). For example, in the 1998 case of Panavision International v. Toeppen, defendant Toeppen registered the domain name, and posted aerial views of the city of Pana, Illinois on the site. The Ninth Circuit Court of Appeals found that trademark dilution occurred when potential customers of Panavision could not find its web site at, and instead were forced to search through other (less obvious) domain names. The fact that potential customers might be discouraged from locating Panavision's legitimate website, coupled with evidence that Toeppen was in the business of registering domain names for profit, led the court to find that Toeppen's conduct "diminished the capacity of the Panavision marks to identify and distinguish Panavision's goods and services on the Internet", and thus constituted infringement.

Lately, the Trademark Dilution Revision Act of 2006, or H.R. 683, was signed into law. H.R. 683 overturned the Supreme Court decision in Mosely v. V Secret Catalogue, Inc., 537 U.S. 418 (2003). Mosely held the plaintiff needed to prove actual dilution under the Federal Trademark Dilution Act ("FTDA"). The new law revises the FTDA so that the plaintiff only needs to show the defendant's mark is likely to cause dilution.

So on the one hand we have now consumer protection laws that seek to protect the consumer from anticompetitive practices and monopolistic attitudes of large corporations and then we have a new "Trademark Dilution Revision Act of Oct.6, 2006" that greatly aids businesses to protect themselves from competition and will strengthen their monopoly position, all at the detriment of the consumer. As a rule Courts will not do anything that creates less conflict and less litigation. On the contrary, Courts most often create more complication that will make for more controversy and greater amounts of conflict and more business for their bretheren lawyers that will file more legal actions. Not much that Courts do is done for the benefit of the general public or the greater good in general.