Two Wrongs Making a Right: Using the Third and Ninth Circuits for a Uniform Standard of Fame in Federal Dilution Law
| Publication year | 2002 |
| Citation | Vol. 25 No. 03 |
I. Introduction
Barstucks, a Washington corporation, sells and brews a line of specialty teas. Barstucks was incorporated in 1977 and has federally registered its trademark. Barstucks has always been successful in its local markets, and the business has skyrocketed nationally over the past ten years. So much, in fact, that it now owns and operates stores in forty-three states and advertises on a semi-national basis.
In 1998, a furniture manufacturer in Missouri decided to start producing a line of upscale bar equipment. In order to create a mental link between its potential customers and its product, the manufacturer named its furniture "Barstucks." The furniture has been so named without benefit of federal trademark protection. Barstucks is produced and sold in a strictly regional, tri-state area. The furniture manufacturer advertises Barstucks in local media and in specialty magazines.
In early spring of 2000, the tea company, Barstucks, discovered that the Missouri furniture manufacturer was using its federally protected trademark. The tea company began proceedings against the furniture manufacturer under federal trademark law, alleging a likelihood of confusion and dilution.
This Comment analyzes the above hypothetical and examines its possible outcome under federal law that provides remedies for likelihood of confusion and dilution. In so doing, this Comment seeks to illustrate the differences between the two remedies and to clarify the appropriate standard for the federal dilution law.
Congress provided the first federal remedy for trademark dilution in 1995 by enacting the Federal Trademark Dilution Act of 1995 (FTDA), which became effective on January 16, 1996.(fn1) The purpose of the Act was to bring uniformity and consistency to the protection of famous trademarks.(fn2) However, inconsistent judicial interpretation of the Act has prevented this policy goal from being achieved. Much of the inconsistency stems from differing interpretations of the fame standard and what is required for a trademark to be "famous" and thus deserving of protection. The conflicting interpretations are exemplified by the Third Circuit case,
This Comment contains six main parts. Part II analyzes the Lanham Act of 1946(fn5) and the likelihood of confusion standard, which led to the enactment of the FTDA. Part III briefly examines the history of dilution and then looks at the FTDA. Part IV focuses on the FTDA's legislative history and intent. In light of the discussion in the foregoing parts, Part V examines differing interpretations of fame as demonstrated by the decisions by the Third and Ninth Circuits, which illustrate and incorporate the differing interpretations of the FTDA among other circuits. In Part VI, this Comment concludes by proposing a uniform standard for all courts to follow.
II. The Lanham Act of 1946 and the Likelihood of
Confusion Standard
A trademark is any word, name, symbol, or device, or any combination thereof used to identify and distinguish one's goods from those manufactured or sold by others and to indicate the source of the goods, even if the source is unknown.(fn6) Trademarks represent a business's goodwill and help it identify its goods and services, which are among its most valuable assets.(fn7)
Although the first federal trademark act was passed in 1870,(fn8) trademark law was largely undeveloped until the passage of the Lanham Act in 1946.(fn9) The Lanham Act serves two purposes: (1) to protect the interests of the public by ensuring confidence that the products purchased bear a favorable trademark and are the products asked for and wanted and (2) to protect the interests of the trademark holder who "spent energy, time, and money in presenting to the public the product . . . from . . . misappropriation by the pirates and cheats."(fn10)
Under the Lanham Act, "likelihood of confusion" is the traditional test for trademark infringement. To succeed on a trademark infringement claim, a plaintiff must show that the defendant's use is "likely to cause confusion, or to cause mistake, or to deceive."(fn11) A federal claim for infringement of an unregistered mark under section 43(a) of the Lanham Act is triggered by a use which "is likely to cause confusion, or to cause mistake, or to deceive as to the affiliation, connection, or association" of the user with the senior user.(fn12)
In the Barstucks hypothetical, in order for the tea company to succeed on a trademark infringement claim under the Lanham Act, the company would have to show that the furniture manufacturer's use of the "Barstucks" trademark is likely to cause confusion, mistake, or deception among consumers as to what the trademark pertains to: selling and brewing tea or manufacturing specialty furniture. Because the two marks are the same and the tea company has a senior use and has federally registered the mark, the company may succeed on such a claim. However, since the two businesses' uses are of such a different character, the furniture manufacturer may be able to succeed on a defense that no reasonable consumer would confuse a local furniture manufacturer and a national corporation that sells and brews teas.
Therefore, the tea company might not have had a federal remedy under the Lanham Act. The unavailability of federal protection for trademarks such as the one in this hypothetical illustrates why many felt the need for a revision in the Lanham Act to reflect changes in law and business practices.(fn13)
III. Dilution and the FTDA
This revision in federal trademark law came in the form of the FTDA. Before the enactment of the FTDA in 1995, Frank I. Schechter had analyzed the concept of dilution in his 1927 article.(fn14) In this article, Schechter argued that to limit trademark protection to a confusion standard ignores the fact that the value of a trademark also lies in the owner of the mark preserving the uniqueness or individuality of the trademark.(fn15) Schechter opined that "once a mark has come to indicate to the public a constant and uniform source of satisfaction, its owner should be allowed the broadest scope possible for the natural expansion of his trade to other lines or fields of enterprise."(fn16) The idea of protecting a mark outside its "field of enterprise" is a key component of dilution theory.(fn17)
Dilution theory differs from likelihood of confusion theory in that the former provides "protection to strong, well-recognized marks even in the absence of a likelihood of confusion, if defendant's use is such as to diminish or dilute the strong identification value of the plaintiffs mark even while not confusing customers as to source, sponsorship, affiliation or connection."(fn18) The underlying premise of dilution doctrine is that there is a "gradual whittling away" or dissolution of the identity and strength of the mark within public consciousness even when the mark is used by non-competing goods.(fn19)
Prior to the passage of the FTDA, there was no federal remedy for dilution. However, numerous states already had statutes providing such cause of action. To date, thirty-four states have antidilution statutes.(fn20) Even though a large number of states had antidilution statutes, the need for a federal remedy was apparent because without federal protection, the owner of a mark must file suit in each state in order to receive protection in the respective state. Furthermore, since some states do not have antidilution statutes, it is impossible for the owner of a mark to receive national protection absent a federal statute. Although the 1988 Trademark Revision Act did not contain a federal antidilution provision, the Trademark Review Commission's report and a bill introduced to the Senate did contain such a provision.(fn21) The House of Representatives, however, did not pass the provision, and the provision was absent from the bill finally ratified by the House and Senate.(fn22)
In 1995, approximately fifty years after the Lanham Act was passed, an antidilution provision was finally adopted in the form of the FTDA. The Act provides:
Thus, in order to succeed on a dilution claim, a plaintiff must prove four elements: (1) its mark is famous; (2) the defendant has made a commercial use in commerce of the plaintiffs mark or trade name; (3) the defendant's use of the mark began after the plaintiffs mark became famous; and (4) the defendant's use causes...
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