Ninth Circuit Expands Scope of Dilution Claims

18 February 2011 Publication
Authors: Andrew Baum

Legal News Alert: Trademark, Copyright & Advertising

Owners of famous trademarks can assert a dilution claim even when the defendant’s mark is not identical or substantially identical to their own, according to a recent Ninth Circuit decision. In Levi Strauss & Co. v. Abercrombie & Fitch Trading Co., the Court acknowledged that while prior case law in the Ninth Circuit had required identity or near-identity, the Trademark Dilution Revision Act of 2006 (TDRA) changed the law and eliminated this requirement. This gives trademark owners an important new weapon in challenging the use of non-confusing marks that simply echo or call to mind the famous mark.

Here, the issue was a stitch design that was reminiscent of, but clearly different from, the famous “Arcuate” design long used on Levi’s jeans. Plaintiff lost before a jury on its infringement and unfair competition claims. The dilution claim, on which Levi Strauss dismissed its claims for money damages, was tried to the court with an advisory jury. Both the advisory jury and the court agreed that Abercrombie & Fitch’s design was not “identical or nearly identical” to the Levi Strauss mark. Citing to multiple Ninth Circuit precedents, the court held that there could be no claim for dilution under TDRA without identity or near identity.

On appeal, the Ninth Circuit carefully reviewed these precedents and concluded that none of them — even those decided after 2006 — had properly construed the text of the TDRA. Its analysis cited to four points in the text of the statute, 15 U.S.C. Section 1125(c).

  1. First, and most simply, the requirement of identity is found nowhere in the statute.
  2. The initial clause of TDRA provides that the owner of a famous mark is entitled to an injunction against one who “commences use of a mark that is likely to cause dilution” (emphasis in opinion). According to the court, the use of the indefinite article “a” (instead of “the”) “indicates that any number of unspecified, junior marks may be likely to dilute the senior mark.”
  3. The statute defines “dilution by blurring” as “association arising from the similarity between” the parties’ marks (emphasis supplied). Congress could have required “substantial similarity” or “identity” here, said the court, but it chose not to do so.
  4. The first of the statutory factors to determine whether there has been “dilution by blurring” is “the degree of similarity” between the parties’ marks. 15 U.S.C. Section 1125(c)(2)(B)(i). Identity or near identity is a factor to be considered in determining dilution, but it is not determinative. Therefore, concluded the Court, the prior Ninth Circuit requirement of “identity or near identity” cannot survive the rewriting of the federal dilution statute in the TDRA.

This decision makes clear that the TDRA was not simply a legislative “fix” for the decision in Moseley v. V Secret Catalogue, Inc., 537 U.S. 418 (2003), simply to allow relief upon proof of likelihood of dilution (not actual dilution). Rather, it was a rewriting and expansion of the dilution doctrine. As the opinion notes, the purpose of the original state and federal dilution statutes was to prevent the whittling away of an established trademark through its unauthorized use by others for dissimilar products, e.g., classic examples like KODAK pianos or BUICK aspirin. Now, the TDRA may be invoked against marks used on the same goods as those sold by the plaintiff, which are neither identical nor confusing, but which simply echo or call to mind the famous mark so as to create an association in consumer’s minds. Thus, MR. CHARBUCKS for coffee was found to dilute STARBUCKS in Starbucks Corp. v. Wolfe’s Borough Coffee, Inc., 588 F.3d 97 (2d Cir. 2009), in which the Second Circuit also held that TDRA contained no requirement of identity or even substantial similarity.

Based on these decisions, owners of famous marks can use TDRA with greater confidence against competitors who subtly imitate the famous mark in a way that is not likely to confuse. This represents an expansion of the traditional scope of trademark protection, under both infringement and dilution theories. Those adopting new marks must give famous marks a wide berth and should not feel immune from attack simply because their mark is neither identical nor confusingly similar to the famous mark.

However, the Levi Strauss case is not over. Because the District Court had dismissed the dilution claim on the sole ground of lack of substantial identity, the Ninth Circuit remanded the case with instructions to weigh all of the statutory factors to decide whether plaintiff had established a likelihood of dilution. These factors include the mark’s degree of inherent or acquired distinctiveness, the plaintiff’s exclusivity of use, the degree of recognition of the famous mark, the defendant’s intent, and proof of any actual association between the plaintiff’s and defendant’s mark. 15 U.S.C. Section 1125(c)(2)(B).

Therefore, while lack of substantial identity does not automatically bar a dilution claim, the plaintiff still has the substantial burden of proving that its mark is famous and that the defendant’s mark creates a likelihood of dilution. The Levi Strauss decision may open the field for more dilution claims to be asserted, but does not make ultimate success for the plaintiff any easier to obtain.

Legal News Alert is part of our ongoing commitment to providing up-to-the-minute information about pressing concerns or industry issues affecting our clients and our colleagues. If you have any questions about this update or would like to discuss this topic further, please contact your Foley attorney or the following:

Andrew Baum
New York, New York