Most people have a general idea of what is meant when I use the term “trademark infringement”. On the other hand, there is a related term that confuses a lot of my clients – that concept is known as “trademark dilution”. Both are legal terms of art that are related but have different meanings. I’ll start with a brief discussion of what they have in common, and end up addressing a misunderstood but widely held belief in trademark law – the “duty to police.”
Both infringement and dilution are causes of action that can be taken against third parties by the owner of a trademark to enforce the rights of the trademark owner. Both can result in hefty judgments against the third party offender, including exemplary damages and attorney’s fees.
Infringement is a cause of action taken against a third party to enforce the rights of a trademark owner. In plain English, infringement is when someone who does not own a mark uses the mark (or one very similar to it) in a manner that causes confusion amongst consumers and deceives them. The most notable examples are counterfeit goods that bear the logo or marking of a source that did not produce them. In those cases, the infringer is taking advantage of the goodwill and reputation of the legitimate trademark owner to sell the infringer’s goods. Courts tend to look unfavorably on infringers for obvious reasons, namely because of the consumer deception they are perpetrating.
Dilution is a form of infringement, in that again there is the potential for consumer confusion because a mark is being used in a manner so as to cause confusion. Dilution diverges from infringement, however, in the following ways. A cause of action for dilution can only arise in cases where the mark that is being diluted is “famous.” Also, the use of the mark is likely to or actually does reduce the ability of the mark to function legally as a trademark.
In the previous paragraph I put quotes around the term “famous” because there is no bright line test as to what constitutes a famous mark for purposes of dilution. There is a series of factors to be considered by the court in determining whether a mark is famous. These factors include how long the mark has been used, the degree of distinctiveness enjoyed by the mark, the channels of trade (i.e. how it is distributed), and recognition of the mark by the consuming public, among others.
How have courts answered the question of whether a similar mark actually tarnishes or dilutes the famous mark? One example of a case where this issue was litigated occurred before the U.S. Supreme Court in 2003 involving Victoria’s Secret and a little store in Kentucky named Victor’s Little Secret. The two stores were not owned by the same company, but both sold forms of lingerie. Victoria’s Secret, obviously the famous mark of the two, sued Victor’s Little Secret, alleging dilution of its famous mark.
In this case, Victoria’s Secret met the criteria of famousness for dilution purposes, but did not prevail when the case was appealed to the Supreme Court because Victoria’s Secret was unable to prove actual dilution. Ultimately, Congress stepped in and amended the dilution portion of the Trademark Act to specify that only a mere likelihood of dilution was required and Victoria’s Secret ultimately prevailed.
There is a widely held belief (including by many lawyers) that when trademark owners become aware of a potentially infringing use of their marks, they legally must take action against the alleged infringer because that is part of their legal “duty to police” their marks. If they don’t, they believe they risk dilution and eventual loss of their mark’s legal protection. In fact, there is no such “duty” imposed by law. On the other hand, it is almost always good practice to monitor the use of your marks by others and take action to ensure that the public is not confused by the unauthorized use of identical or confusingly similar marks.
If you have questions about trademark law, including how best to protect and monitor the use of your marks, please feel free to contact me at email@example.com.