Likelihood of destruction - restructuring the trademark dilution by blurring factors in the Trademark Dilution Revision Act of 2006.

• Author: Hawkins, Derek A.

"Destroying is a necessary function in life. Everything has its season, and all things eventually lose their effectiveness and die."

--Margaret J. Wheatley *

1. INTRODUCTION II. THE LAW, AND ITS ORIGINAL APPLICATION III. BLURRING FACTORS IN ACTION IV. PROPOSAL FOR CHANGE A. Removal of the Fame Factor B. Irrelevance of Intent C. Quantifying the Effects of Consumer Perception--Creation of the Basis to Measure Likelihood of Dilution by Blurring, and Measuring Effects on Brand Equity V. CONCLUSION I. INTRODUCTION

   We have been swindled--all of us--students, professors, and practicing attorneys alike. We have been deceived into accepting what is currently the Trademark Dilution Revision Act of 2006 (hereinafter "TDRA"), and its multifactor test to measure trademark dilution by blurring, as the equitable and sensible anti-dilution law to police dilution of trademarks by blurring in the United States. With unquestioned acquiescence, courts have analyzed dilution by blurring claims without gauging the effectiveness of the TDRA. Part of this is, indeed, because federal anti-dilution law is relatively young and is still evolving. (1) Furthermore, only a few courts have interpreted the TDRA since its enactment. However, within the pool of courts that have delved into the un-navigated waters of this amended anti-dilution law, there exists a myriad of applications, explanations, and interpretations. (2) The TDRA multifactor blurring test enumerated in [section] 1125(c), the codification of the revised TDRA statute, is non-exclusive. However, from a practical standpoint, the blurring factors serve as a guideline that courts will consider first before looking to an extrinsic test unapproved by Congress. This is at least the assumption without further guidance on how to proceed with a dilution by blurring analysis.

   The TDRA and its blurring factors came to be through numerous case decisions; however, since its enactment, there has yet to be an effective challenge to the TDRA blurring factors for their effectiveness, utility, or relevance. In enacting the TDRA, Federal anti-dilution law morphed in two significant ways: "(i) a likelihood of dilution, rather than actual dilution, is now required to establish dilution by blurring ... [and] (ii) courts may apply six factors to determine whether a mark is likely to cause dilution by blurring." (3) It has been six years since the enactment of the TDRA; the time has come to examine the TDRA and its multifactor blurring test in order to gauge its efficacy in analyzing dilution by blurring claims. First, this comment will explain the origin of modern-day application of the TDRA and its blurring factors. Next, this comment will critically examine the application of the six factors in several key cases over the last six years to ascertain if they are, in fact, effective in achieving Congress' overarching purpose of policing trademark dilution by blurring. Finally, this comment will conclude with a proposal to implement a new methodology when examining a dilution by blurring claim, namely, creating a measurable basis upon which courts can tangibly gauge likelihood of dilution. Implementation of such a methodology will be significantly more effective in properly determining the existence of dilution by blurring. Congress made significant changes to anti-dilution law via the TDRA, positing that a user prove a likelihood of dilution, and adopting a list of redundant and inefficient factors without any guidance on how they should be effectively applied--Congress has failed us--that failure needs to be remedied.

2. THE LAW, AND ITS ORIGINAL APPLICATION

   To know where the future of trademark dilution by blurring law must go, it is essential to understand what it is, and where it came from. Currently, trademark dilution law, in relation to blurring, states:

   ... "[D]ilution by blurring" is [the] association arising from the similarity between a mark or trade name and a famous mark that impairs the distinctiveness of the famous mark. In determining whether a mark or trade name is likely to cause dilution by blurring, the court may consider all relevant factors, including the following: (i) The degree of similarity between the mark or trade name and the famous mark. (ii) The degree of inherent or acquired distinctiveness of the famous mark. (iii) The extent to which the owner of the famous mark is engaging in substantially exclusive use of the mark. (iv) The degree of recognition of the famous mark. (v) Whether the user of the mark or trade name intended to create an association with the famous mark. [And] (vi) Any actual association between the mark or trade name and the famous mark. (4) Plainly stated, "dilution by blurring occurs when consumers mistakenly associate a famous mark with goods and services of a junior mark, thereby diluting the power of the senior mark to identify and distinguish any associated goods and services, hence the impaired distinctiveness." (5) Prior to 2006, it was the viewpoint of the Supreme Court that the text of the anti-dilution statute unambiguously required a showing of actual dilution rather than a likelihood of dilution. (6) Congress annulled this requirement by enacting the TDRA of 2006, an act that directly opposed the viewpoint of the Supreme Court at the time by now mandating proof of a likelihood of dilution. In addition to this Congressional shift in position, the TDRA introduced a list of factors to determine whether blurring exists. (7)

   The first court to adjudicate a dilution by blurring claim post-TDRA was the Fourth Circuit in a case involving the famous brand Louis Vuitton. (8) At the time, the Fourth Circuit never offered an opinion on the new likelihood of dilution standard, and for guidance looked to the Second Circuit application of anti-dilution law and its reliance on New York General Business Law [section]360-l, which already incorporated the very same likelihood of dilution standard that was adopted by congress. (9) New York General Business Law [section]360-l reads:

   Likelihood of injury to business reputation or of dilution of the distinctive quality of a mark or trade name shall be a ground for injunctive relief in cases of infringement of a mark registered or not registered or in cases of unfair competition, notwithstanding the absence of competition between the parties or the absence of confusion as to the source of goods or services. (10) The analysis in Louis Vuitton was the first time that New York General Business Law [section]360-l was used post-TDRA to assess a dilution by blurring claim, truly making this a case of first impression for modern trademark dilution by blurring analysis. The Fourth Circuit went on to cite to the Second Circuit and its application of New York General Business Law [section]360-l in the Tommy Hilfiger case, which took place prior to the enactment of the TDRA. (11) In Tommy Hilfiger, the Second Circuit Court posited, "the presence of a famous mark on certain products may have little diluting effect, particularly where it is obvious that the defendant intends the public to associate the use with the true owner...." (12) The Second Circuit made the previous statement primarily in reference to parody use of a famous mark; however, intent is also a factor that congress has enumerated as one to weigh when assessing a dilution by blurring claim. (13) Stating that the presence of a famous mark on a product will have little diluting effect, particularly where it is obvious that the defendant intends to associate the use with the true owner, forms a mixed message concerning the importance of intent. What happens when a user does not intend to associate their use with that of the use of the senior user? Does this lack of intent become more indicative of a diluting effect? The Second Circuit did not answer these questions; however, the Second Circuit belittled the importance of intent for a reason. While the reason is not expressly stated, the court's actions suggest that intent may not be that important for dilution analysis purposes, because even when it is found, it is not indicative of a diluting effect. Consequently, this suggestion is the root of modern day application of anti-dilution law. Application of the TDRA and its multi-factor test for dilution by blurring stems from a confusing analysis, inferring that one of the factors, namely intent, is not indicative of a diluting effect, even when found--this type of analysis also calls into question the validity of the other five blurring factors.

   Knowing now where the first application of the TDRA took place, it behooves us to look at the application of the TDRA in other cases since its enactment. An analysis of these cases will highlight the practical implications of the TDRA, and show whether later courts have taken the same approach as the Second and Fourth Circuit in the Louis Vuitton and Tommy Hilfiger cases, when tackling a dilution by blurring claim.

3. BLURRING FACTORS IN ACTION

   Several key cases have shed light on how courts deal with examining a dilution by blurring claim post-TDRA. Studying the holdings in these cases pushes us closer to a plausible remedial replacement for the current TDRA dilution by blurring factors and provides a guiding light to illuminate how to best analyze a trademark dilution by blurring claim.

   Dilution by blurring occurs when a single mark, not multiple marks, references two separate sources in the eye of the consumer. (14) It then behooves reasoned minds to draw the conclusion that when assessing a claim for trademark dilution by blurring, one should initially look to whether or not the mark in question is identical, nearly identical or substantially similar to another, and whether or not a mental association or link is made in the mind of the consumer. Ironically, in Century 21, the District Court focused on blurring factors one and six: similarity and mental association when making its final determination. (15)...