TRADEMARK DILUTION DOCTRINE: THE

SCENARIO POST TDRA, 2005

Brajendu Bhaskar*

‘Trademark Dilution Doctrine’ is basically a trademark

law concept that permits the owner of a famous mark
to forbid others from using that mark in a way which
would harm its uniqueness. 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. The aim of this paper is
to study in detail this doctrine as it stands today after
the enactment of the Trademark Dilution Revision Act
2005 in the United States, and indicate key issues which
require detailed inquiry and analysis.

I. INTRODUCTION
Trademark law essentially aims at consumer protection. Therefore,
Trademark law is traditionally concerned with situations where an unauthorized
party sells 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 1 to protect trademarks as a property right, securing the
investment the trademark owner has made in establishing and promoting a strong
mark. Trademark Dilution is a trademark law concept permitting the owner of a

*
4th Year student, National Academy of Legal Studies And Research (NALSAR) University of
Law, Hyderabad.
1
The concept of ‘dilution’ is much newer than the rest of trademark law. The US enacted a law
against trademark dilution only in 1995. However, various states had begun adopting such laws
shortly after World War II, and the idea was floated in academic writing as early as 1920s.

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638 NUJS LAW REVIEW 1 NUJS L. Rev. (2008)

famous trademark to forbid others from using that mark in a way of 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.2

This paper analyzes the current state of trademark dilution doctrine

after the Moseley v. Victoria Secret Catalogue Inc3 decision and the Trademark
Dilution Revision Act, 2006 (hereinafter TDRA). Section II provides a brief
background of trademark dilution including the definition of a trademark, the
trademark registration process, and the remedies available for trademark violations,
especially under trademark dilution laws. Section III addresses the state of the
Federal Trademark Dilution Act (hereinafter FTDA), and the various interpretations
given to it before the Mosley case. Section IV discusses in detail the United States
Supreme Court’s judgment in Moseley. Section V examines the aftermath of Moseley
and the contents of the TDRA. Section VI addresses an analysis of the implications
of the TDRA and discusses key changes brought about by the Statute. Section VII
compares the current trademark dilution doctrine of United States (hereinafter US)
with similar doctrines in the European Union (hereinafter EU), especially the United
Kingdom (hereinafter UK).

II. HISTORY AND BACKGROUND OF TRADEMARK

DILUTION

A. WHAT IS A TRADEMARK?
Trademarks protect source identifications (marks of trade), which are
used by manufacturers and merchants to identify and distinguish their goods from
those of competitors.4

B. REGISTRATION OF TRADEMARKS
In the US, protectable and exclusive rights to a trademark are not
conditioned on the registration of that mark.5 Instead, an owner can automatically
acquire trademark rights in a geographical area of use simply by using or displaying
a mark in connection with goods for sale or in advertising of services.6 However,

2
Ty Inc. v. Perryman, 306 F. 3d 509 (7th Cir. 2002).
3
537 U.S. 418 (2003).
4
Anna Wong, Big Business in Their Belfry: Congress to Dumb Down Dilution, 6 LOY. L. &
TECH. ANN. 43, 45 (2006).
5
WILLIAM M. BORCHARD, A TRADEMARK IS NOT A COPYRIGHT OR A PATENT 2, 3 (Cowan, Liebowitz &
Latman, P.C. ed., 2005).

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 TRADEMARK DILUTION DOCTRINE 639

even in the US, nationwide trademark rights can be attained by registering the mark
in the U.S. Patent and Trademark Office (hereinafter USPTO). Applications for
registration of the trademark are subject to an examination by the USPTO and
registration can be refused if, among other reasons, the marks are functional,7
immoral, scandalous, merely descriptive or deceptively mis-descriptive, or consist
of a U.S. flag or coat of arms.8 Anyone with a commercial interest in a mark can
oppose federal registration.9

Unlike copyright or patent rights, trademark rights do not expire;

protection continues indefinitely as long as the mark is not abandoned or becomes
a generic term.10 Federal law presumes that a mark is abandoned after three
consecutive years of non-use.11

C. VIOLATION OF TRADEMARKS AND EMERGENCE OF THE

DILUTION DOCTRINE
The English common law is believed to be the source of trademark
infringement and unfair competition laws in the United States.12 The current federal
trademark legislation is situated in the Lanham Act, 1946.13 Unlike the other
intellectual property rights, which derive from the Patent and Copyright clause of
the US Constitution,14 trademark law emanates from the Commerce Clause and
rests on a policy of protecting consumers from fraud and deceit.15 Trademark

6
Id. In India, the law with respect to registration of a trademark is a little different. Though the
registration of a trademark in India is contingent on whether the person claiming to be the
proprietor of the trademark used or proposed to be used by him desires to get it registered, it
is explicitly settled that there shall be no remedy available for infringement of an unregistered
trademark. See § 18 & § 27, Trade Marks Act, 1999.
7
“[I]n general terms, a product feature is functional, and cannot serve as a trademark, if it is
essential to the use or purpose of the article or if it affects the cost or quality of the article,
that is, if exclusive use of the feature would put competitors at a significant non-reputation-
related disadvantage.” Qualitex Co. v. Jacobson Products Co., Inc., 514 U.S. 159, 165 (1995)
(citing Inwood Lab., Inc., v. Ives Lab., Inc., 456 U.S. 844, 850, n.10).
8
BORCHARD, supra note 5, 4.
9
Id.
10
A mark becomes generic when it loses its significance as a mark and becomes the common
name of a product, such as aspirin or xerox.
11
See The Trade Mark Act, 1946, (also known as The Lanham Act) 15 U.S.C. § 1127 (2000)
(stating that three consecutives years of non-use constitutes prima facie abandonment).
12
Moseley, supra note 3 (citing Hanover Star Milling Co. v. Metcalf, 240 U.S. 403, 413 (1916)
for the proposition that United States trademark law is grounded in the English common law
and is codified in the federal trademark statute, The Trade Mark Act, also known as the
Lanham Act, 1946).
13
15 U.S.C. §§ 1051-141 (2000).
14
Anna Wong, supra note 4.
15
Id.

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640 NUJS LAW REVIEW 1 NUJS L. Rev. (2008)

protection was designed to shield consumers from being misled by the use of
infringing marks and also to protect producers from unfair practices.16 Federal
trademark law protects against the likelihood of confusion, and also protects the
owners of a highly distinctive or famous mark against dilution even if there is no
likelihood of confusion. Trademark infringement forms part of the broader law of
unfair competition. Infringement occurs when another uses the same or a confusingly
similar term, on the same or closely related goods or services. Unlike the traditional
trademark law which is rooted in the concern for protecting consumers, dilution
statutes aim at protecting and benefiting a seller’s investment in the mark.17

Initially, the only available federal trademark remedy was trademark

infringement, and the likelihood of consumer confusion was the essential to a
successful trademark infringement claim.18 However, trademark protection was only
designed to protect against trademark infringement in competing markets; thus,
trademark protection did not include a remedy for use of a mark on non-competing
goods.19 The first instance in modern times of a court providing ‘likelihood of
confusion’ remedy in a non-competing product and service happened in England in
1898, in the case of Eastman Photographic Material Co. v. John Griffiths Cycle
Corp.20 In this case, the court allowed the camera maker to successfully enjoin the
use of ‘Kodak’ bicycles, even though they did not directly complete with Kodak
cameras. This case marked the first significant shift from traditional trademark
protection.

Trademark dilution refers to conduct that lessens the capacity of a

famous mark to distinguish its goods or services.21 This conduct alters the public
perception of a trademarked product that over time can devalue a famous mark and
mislead the consuming public. Thus, dilution does not rely on the traditional
infringement tests of likelihood of confusion, deception, or mistake; rather dilution
results when the unauthorized use of a famous mark reduces the public opinion that
the mark signifies something unique, singular, or particular.22 According to Frank

16
Moseley v. Victoria supra note 12 [citing Qualitex Co. v. Jacobson supra note 7]. See also,
Monica Wallace, Using the Past to Predict the Future: Refocusing the Analysis of a Federal
Dilution Claim, 73 U. CIN. L. REV. 945, 951 (2005); Michael Adams, The Dilution Solution:
The History and Evolution of Trademark Dilution, 12 DE-PAUL-LCA J. ART & ENT. L. & POL’Y
143, 145 (2002).
17
(“The Dilution Act offers no benefit to the consumer public - only to the owner”). See TCPIP
Holding Co. Inc., v. Haar Commc’n Inc., 244 F.3d 88, 95 (2nd Cir. 2001), see also Nissan
Motor Co. v. Nissan Computer Corp., 378 F.3d 1002, 1012 (9th Cir. 2004) [citing Thane
Int’l Inc. v. Trek Bicycle Corp., 305 F.3d 894, 904 (9th Cir. 2002) that the purpose of
dilution law is to protect an owner’s investment in his mark].
18
Monica Wallace, supra note 16.
19
Robert Klieger, Trademark Dilution: The Whittling Away of the Rational Basis for Trademark
Protection, 58 U. PITT. L. REV. 789, 816 (1997).
20
15 R.P.C. 105 (High Ct. of Justice, Ch. 1898), as cited in Monica Wallace, supra note 16.
21
See The Trade Mark Act, 1946, (also known as The Lanham Act) 15 U.S.C. § 1127 (2000).
However, the Lanham Act defines dilution without mentioning dilution by blurring or tarnishment.
22
H.R. Rep. No. 109-23, 4 (2005).

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 TRADEMARK DILUTION DOCTRINE 641

Schechter who is considered the pioneer of the dilution doctrine, the only rational
basis for protecting a mark is to preserve the uniqueness of a trademark.23 Traditional
trademark rights did nothing to protect arbitrary, fanciful, and distinctive marks in
non-competing markets. Hence, Schechter, in his landmark article in the Harvard
Law Review, argued the need for protecting distinctive marks that were linked with
a product’s particular quality or characteristics, such as Rolls-Royce, Kodak, and
Corona.24 He urged the adoption of a new way of protecting a trademark’s ability to
generate sales and developed the classic view that the injury caused by the
unauthorized concurrent use of a distinctive mark results in the “gradual whittling
away or dispersion of the identity and hold upon the public mind”.25

The first Dilution statutes appeared in late 1940s, starting with

Massachusetts. However, they were only sporadically (and inconsistently) applied
by the courts, perhaps due to dissimilar and varied language of the state statutes.26
This led to the need for uniformity and certainty for trademark owners. As a result,
US Congress amended the Lanham Act to create a federal cause of action for
trademark dilution. This was the FTDA, 1995.27 It extended the scope of protection
available to owners of famous trademarks, and offered a remedy where traditional
trademark infringement claims would fail.28 The Act applied when an unauthorized
user of a trademark attempted to trade upon the goodwill established by a famous
mark, thereby diluting the mark’s distinctive quality. The FTDA did not offer any
benefit to the consumer, but only to the trademark owner.29 The relevant part of the
Act provides:

“The owner of a famous mark shall be entitled, subject to the

principles of equity and upon such terms as the court deems
reasonable, to an injunction against another person’s commercial
use in commerce of a mark or trade name, if such use begins after
the mark has become famous and causes dilution of the
distinctive quality of the mark.”30

23
Frank Schechter, The Rational Basis of Trademark Protection, 40 H ARV. L. R EV. 813, 831
(1927). See also Moseley v. Victoria supra note 12 (citing Schechter’s rational basis for
trademark protection).
24
Id.; See also Monica Wallace, supra note 16.
25
Frank Schechter, id.
26
Robert Klieger, supra note 19. See also, Restatement (Third) of Unfair Competition § 25,
Statutory Note (1995).
27
15 U.S.C. § 1125(c) (2000).
28
H.R. Rep. No. 109-23, 4 (“the purpose of the FTDA is to protect famous trademarks [...]
even in the absence of a likelihood of confusion”).
29
TCPIP Holding Co. Inc., v. Haar supra note 17.
30
15 U.S.C. § 1125(c)(1) See generally 15 U.S.C. § 1125(2), (3) (noting that only a remedy for
injunctive relief is provided). However, if a junior user willfully intended to trade on the
senior’s reputation or to cause dilution of the famous mark, then remedies (i.e. profits,
damages, or costs) set forth in §§ 1117(a) and 1118 are allowed. Also, the statute provides for
specific exclusions from a dilution cause of action; namely fair use, noncommercial use, and
news reporting and commentary.

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Furthermore, the FTDA provided a non-exclusive list of eight factors

that the court may use in considering whether a mark is distinctive and famous.31

III. INTERPRETATION OF THE FEDERAL TRADEMARK

DILUTION ACT BEFORE MOSELEY
The FTDA was interpreted dissimilarly by the various federal circuit
courts. Specifically, the phrase ‘causes dilution of the distinctive quality of the
mark’32 necessitated the courts to determine whether the Act required a showing of
actual harm for a cause of action to arise. While the Fourth, Fifth and Ninth Circuits
interpreted the FTDA strictly and required showing of an actual harm before granting
an injunction,33 the Second, Sixth and Seventh Circuits read the Act in a more liberal
manner, holding that the language did not require an actual harm for relief.34

A. STRICT INTERPRETATION OF THE FTDA

The leading case which evidenced a strict interpretation of the FTDA
was the Fourth Circuit’s decision in Ringling Brothers-Barnum & Bailey Combined

31
15 U.S.C. § 1125(c)(1)(A)-(H) (listing the factors that a court may consider in determining
whether a mark is distinctive and famous). They are as follows:
(A) the degree of inherent or acquired distinctiveness of the mark; (B) the duration and extent
of use of the mark in connection with the goods or services with which the mark is used; (C) the
duration and extent of advertising and publicity of the mark; (D) the geographical extent of the
trading area in which the mark is used; (E) the channels of trade for the goods or services with
which the mark is used; (F) the degree of recognition of the mark in the trading areas and
channels of trade used by the marks’ owner and the person against whom the injunction is
sought; (G) the nature and extent of use of the same or similar marks by third parties; and (H)
whether the mark was registered under the Act of March 3, 1881, or the Act of February 20,
1905, or on the principal register.
32
See 15 U.S.C. § 1125(c)(1) (2000).
33
For cases supporting a strict interpretation of the FTDA, see, e.g., Ringling Bros.-Barnum &
Bailey Combined Shows, Inc. v. Utah Division of Travel Dev., 170 F.3d 449 (4th Cir. 1999),
Westchester Media v. PRL USA Holdings, Inc., 214 F.3d 658 (5th Cir. 2000), and Panavision
Int’l v. Toeppen, 141 F.3d 1316 (9th Cir. 1998). In Panavision, for example, defendant
Toeppen registered the domain name www.panavision.com, 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
www.panavision.com, 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. Interestingly, the Court said that to find
dilution, it need not rely on the traditional definitions such as ‘blurring’ and ‘tarnishment’.
34
For cases supporting a liberal interpretation of the FTDA, see, e.g., Nabisco, Inc. v. PF Brands,
Inc., 191 F.3d 208 (2d Cir. 1999), Victoria Secret Catalogue Inc. v. Moseley, 259 F.3d 464
(6th Cir. 2001) and Eli Lilly & Co. v. Natural Answers, Inc., 233 F.3d 456 (7th Cir. 2000).

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 TRADEMARK DILUTION DOCTRINE 643

Shows, Inc. v. Utah Division of Travel Development.35 Ringling Brothers Circus

alleged that the Utah Tourism Department’s commercial use of the slogan ‘The
Greatest Snow on Earth’ diluted the Circus’ most famous slogan, ‘The Greatest
Show on Earth’. 36 Ringling Brothers argued that according to the statutory
interpretation of the FTDA, “dilution by ‘blurring’ occurs whenever a junior mark is
either identical to or sufficiently similar to the famous mark that persons viewing the
two instinctively will make a ‘mental association’ between the two.”37 According to
the appellants, if this interpretation was accepted, the consumer’s familiarity of the
goods or services became irrelevant; all that mattered was the identity and sufficient
similarity of the mark.38 Ringling Brothers therefore argued that the two marks were
so similar that the required ‘mental association’ between the two was obvious and
evident as a matter of law, and the establishment of dilution by blurring did not
require substantiating evidence.39

The Fourth Circuit Court rejected this interpretation and held that in
addition to the mental association element, Ringling Brothers was required to prove
that the mental association caused actual harm to the senior mark’s capacity to ‘identify
and distinguish’ its goods or services.40 The Court examined the language of both
federal and state dilution laws, and found a significant difference between the two,
being that the federal statute spoke of the ‘actual dilution’ requirement as against the
‘likelihood of dilution’ requirement found in most state laws.41 This led the Court to
determine that the Congress knowingly designed the federal dilution statute to create
a claim that provided a narrower scope and stringent burden of proof on the plaintiff
than state statutes require.42 Applying this strict rule to Ringling Brothers, the court
found that Ringling Brothers failed to meet the higher federal burden of proof necessary
to acquire an injunction because the circus could not prove actual harm by economic
injury of their mark by Utah’s use of ‘The Greatest Snow on Earth’ slogan.43

B. LIBERAL INTERPRETATION OF THE FTDA

In contrast to the strict interpretation of the FTDA by the Fourth Circuit
Court, the Second Circuit adopted a liberal approach in case of Nabisco, Inc. v. PF
Brands, Inc.44 In an effort to promote its new animated series, ‘CatDog’, Nickelodeon
Television Network entered into an agreement with Nabisco to produce and launch
a snack marketed to children. These snacks were uniquely shaped cheese crackers

35
170 F.3d 449 (4th Cir. 1999).
36
Id., 451-452.
37
Id.
38
Id.
39
Id., 449.
40
Id.,464-5.
41
Id., 458.
42
Id., 459.
43
Id., 464-465.
44
191 F.3d 208 (2d Circuit. 1999).

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644 NUJS LAW REVIEW 1 NUJS L. Rev. (2008)

modeled on the cartoon,45 and consisted of three shapes: a Cat-Dog, a fish, and a
bone.46 However, the fish cracker closely resembled Pepperidge Farm’s Goldfish
cracker. Pepperidge Farm argued that Nabisco’s fish amounted to trademark
infringement and dilution under federal and New York state laws.47 Ruling for
Pepperidge Farm, the trial court found a likelihood of successfully proving dilution
and ordered a preliminary injunction against Nabisco’s market of the CatDog snack.48

The Second Circuit centered its opinion on the definition of

distinctiveness, and held that Pepperidge Farm’s Goldfish was distinctive enough
to warrant anti-dilution protection.49 Agreeing with the trial court, the Second Circuit
held that Nabisco’s fish cracker diluted the distinctiveness of Pepperidge Farm’s
Goldfish because the products were sufficiently similar to negatively affect the
distinct Goldfish.50 In this case, the Second Circuit also discussed at length the
Fourth Circuit’s judgment in the Ringling Brothers case,51 and the difficulties and
inappropriateness of proving actual dilution.52

IV. MOSELEY V. VICTORIA SECRET CATALOGUE INC. : AN

53
ANALYSIS
In Moseley, the US Supreme Court made an effort to reconcile the
significant split among the Circuit courts and to set a uniform national standard for
trademark dilution. In this case, Victoria Secret Catalogue Inc. was the owner of the
‘Victoria’s Secret’ trademark, while Victor Moseley ran a small retail store in Kentucky
called ‘Victor’s Secret’, selling a wide variety of items, including lingerie.54 Moseley
claimed that he had named the store after himself.55 Victoria’s Secret requested

45
Id., 213.
46
Id.
47
Id.
48
Id., 213-14, (granting an injunction on the dilution claims but not the infringement ones).
The court held that the Pepperidge Farm goldfish mark was nonfunctional, distinctive, and
famous; thus it was protectable under dilution and infringement laws. The court applied the
six factors proposed in a concurring opinion in Mead Data Central, Inc. v. Toyota Motor
Sales, U.S.A., Inc., 875 F.2d 1026, 1035 (2d Cir.1989) and concluded a finding in favor of
dilution. It held that Pepperidge Farm took a unique and fanciful idea of a goldfish shaped
cracker and made it its signature, and Nabisco’s use of a goldfish-shape cracker was likely to
weaken the focus of consumers on the true origin of the Goldfish.
49
Id., 216.
50
Id., 217-8.
51
Ringling Bros, supra note 33.
52
Nabisco, Inc., supra note 34.
53
537 U.S. 418 (2003).
54
Id., 423.
55
See generally, Warren Richey, Is ‘Victor’s Little Secret’, Copyright Infringement? available at
http:// www.csmonitor.com/2002/1112/p04s02-usju.htm (Last visited on August 12, 2008);
Gina Holland, High Court Fight: Victoria’s Secret v. Victor’s Little Secret, available at http://
www.freerepublic.com/focus/f-news/666366/posts (Last visited on August 12, 2008) (noting
Moseley’s reason for choosing the business name).

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 TRADEMARK DILUTION DOCTRINE 645

Moseley not to use ‘Victor’s Secret’ as a store-name as it would cause consumer

confusion with the famous ‘Victoria’s Secret’ trademark.56 At this, Moseley changed
the store-name to ‘Victor’s Little Secret’, which was not acceptable to Victoria’s
Secret.57 The Corporation filed a case against Moseley claiming, inter alia, trademark
dilution, as Victor’s use of the similar name to attract business was ‘likely to blur
and erode the distinctiveness’ and ‘tarnish the reputation’ of the well-known
‘Victoria’s Secret’ trademark.58 At the trial, while Victoria’s Secrets could not provide
any evidence concerning the impact ‘Victor’s Little Secret’ had on the famous
mark,59 the Moseleys testified that the lingerie sales made up for less than five
percent of their sales.60 Therefore, the trial court did not find a trademark infringement
violation because there was no evidence of a likelihood of confusion between the
two marks.61 However, the Court found that dilution existed under the FTDA. It
concluded that Moseley’s products, had a risqué quality that ‘widely differentiated’
it from Victoria’s Secret. As such, the court enjoined the Moseleys from using the
‘Victor’s Little Secret’ mark because it was sufficiently similar to the distinctive
‘Victoria’s Secret’ mark to dilute by tarnishment.62

The Sixth Circuit affirmed the trial court’s decision in Moseley.63 To

implement the Second Circuit’s standards64 and to expand on the trial court’s ruling,
the Sixth Circuit examined two questions that the trial court did not address: (1)
whether the ‘Victoria’s Secret’ mark is distinctive and (2) whether injunctive relief
could be granted before actual dilution. After examining these questions, the
appellate court held that the ‘Victoria’s Secret’ mark as a whole was ‘arbitrary and
fanciful’ and hence, distinctive and worthy of vast trademark protection. Further, it
held that the evidence presented was sufficient to establish dilution, even in the
absence of actual harm.65 The Court thought it to be a ‘classic’ case of dilution by
tarnishment because a consumer was likely to associate the famous mark with the

56
Moseley v. Victoria supra note 12.
57
Id.
58
Id., 423-424. Victoria’s Secret sued under the federal trademark dilution because Kentucky has
not adopted a state trademark dilution statute. Restatement (Third) of Unfair Competition
§ 25, Statutory Note (1995).
59
Id., 424-425.
60
Id. As per the ‘Polaroid’ likelihood of confusion test, the low percentage of lingerie sales
indicated that the products were not proximate. See, Polaroid Corporation v. Polaroid
Elects. Corporation, 287 F.2d 492, 495, (2nd Circuit 1961).
61
Moseley v. Victoria supra note 12.
62
Id. See also, Tony Morrow, High Court takes a Peek at Victoria’s Secret Trademark, available
at http:// www.law.com/jsp/article.jsp?id=1036630408180 (Last visited August 20, 2008).
63
Id.
64
See generally, Nabisco, Inc., supra note 34.
65
The court relied on congressional intent found in a House report issued prior to the FTDA
enactment and also relied on the difficulty of proving actual harm. It said, “confusion leads
to immediate injury, while dilution is an infection, which if allowed to spread, will inevitably
destroy the advertising value of the mark”, Moseley v. Victoria supra note 12.

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novelties sold by the Moseleys, as well as dilution by blurring from linking the
renowned enterprise with a single, unauthorized business.66

The Moseleys petitioned the Supreme Court for Certiorari. The Supreme
Court now had to address the question whether a dilution claim required proof of
actual dilution or merely a ‘likelihood of dilution’. It must be noted that the common
language of state dilution statutes, as well as some provisions of the Lanham Act
allowed for remedy on the showing of a likelihood of injury, rather than a consummated
harm.67 The FTDA does not contain the ‘likelihood’ language; instead it provides an
injunction if a junior’s use ‘causes dilution of the distinctive quality’ of the famous
mark.68 In a unanimous decision, the Supreme Court held that in drafting the FTDA,
Congress consciously chose the words ‘causes dilution’, rather than use the
‘likelihood’ standard found in other trademark statutes. Hence, the plain text of the
statute unambiguously required a showing of actual dilution, rather than a mere
likelihood of dilution.69 By applying the actual dilution standard and the definition of
dilution, the Supreme Court reversed the lower courts’ rulings and remanded the case
for further proceedings. This was because evidence presented did not demonstrate
that the Moseleys’ use of ‘Victor’s Little Secret’ lessened the capacity of ‘Victoria’s
Secret’ to identify and distinguish its products. In Moseley, the Supreme Court settled
the disagreement among the circuit courts by rejecting the lenient interpretations
adopted by the Second, Sixth, and Seventh Circuits and embracing the overall strict
construction as espoused by the Fourth and Fifth Circuits; in doing so the Court
made clear that actual dilution is an essential element of a FTDA claim.70

V. TRADEMARK DILUTION REVISION ACT, 2005

The ambiguity in the Court’s language in Moseley caused inconsistent
application of the actual dilution standard as to whether identical marks in themselves
automatically constitute sufficient circumstantial evidence to prove actual dilution or if
circumstantial evidence, as opposed to direct evidence, may be used to prove dilution
when the marks are identical.71 For example, in Savin Corp. v. The Savin Group72 , the

66
Id., 427-28 (citing the Sixth Circuit Court of Appeals’ express rejection of the Ringling Bros.
court’s requirement of actual dilution). See also, Keola Whittaker, Trademark Dilution in a
Global Age, 27 U. PA. J. INT’L. ECON. L. 907, 917 (2006).
67
Moseley v. Victoria supra note 12; see also, 15 U.S.C. § 1125 (c) (1).
68
Id.
69
Id.; See also, Ringling Bros, supra note 33 [citing I.P. Lund Trading ApS & Kroin, Inc. v.
Kohler Co. 163 F.3d 27, 45 (1st Cir. 1998) that given the critical provisions that expressly
differentiate the federal and state statues, one must assume that the federal statute is intended
by Congress to provide a more narrow scope]. See also Warren Richey &Linda Feldman,
Court Scores One for a Store Called ‘Victor’s Little Secret,’ available at http://
www.csmweb2.emcweb.com/2003/0305/p02s02-usju.htm (Last visited on August 20, 2008).
70
Moseley v. Victoria supra note 12.
71
Id., (quoting that “Direct evidence of dilution such as consumer surveys will not be necessary if
actual dilution can reliably be proved through circumstantial evidence—the obvious case is one
where the junior and senior marks are identical”). See also, Lee Middleton Original Dolls Inc.
v. Seymour Mann Inc., 299 F. Supp. 2d 892, 902 (2004). See also, Savin Corp. v. The Savin

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 TRADEMARK DILUTION DOCTRINE 647

trial court rejected the interpretation that identity alone was sufficient to automatically
prove dilution, holding that the existence of identical trademarks did not excuse the
plaintiff from having to present some evidence of actual dilution.73 However, the Second
Circuit reversed that decision, interpreting Moseley to stand for the proposition that the
identity of marks alone creates a presumption of future dilution, and that a plaintiff need
not submit further proof of actual dilution.74 The appellate court emphasized that the
presumption only applies when the marks are exact replications, noting that a close
similarity to the marks would not suffice to establish per se evidence of actual
dilution.75 On the other hand, the Seventh Circuit’s decision in Ty. Inc. v. Softbelly’s Inc76
stated that although the Supreme Court did not explain ‘circumstantial evidence’, it
should be interpreted to require the need for ‘trial-type evidence’.77 Simply presenting
identical marks will not suffice. In that case, the trial court determined that the plaintiff’s
mark was famous, but on appeal, the court expressed great doubt that the plaintiff
proved dilution since no evidence to meet the statutory definition was presented.78 In
response to the Supreme Court’s interpretation establishing actual harm as a necessary
element of a dilution claim, a new legislation, the TDRA was proposed, to adopt a
‘likelihood of dilution’ standard by amending the FTDA.

The TDRA in its present form makes important changes to the law of
trademark dilution and is intended to clarify Congress’s intent when it first
passed the Federal Dilution Statute in 1995.79 It strives to eliminate confusion
on key dilution issues that increases litigation, and offers guidance for the
courts in adjudicating dilution cases. Most importantly, the TDRA establishes
a ‘likelihood of harm’ standard for dilution actions and offers protection to
famous marks that are inherently distinct or acquire distinctiveness. However,
it raises the bar for proving fame, requiring that a mark be ‘widely recognized by
the general consuming public’, contrary to fame isolated in niche markets.80
The TDRA also clearly recognizes dilution by blurring and tarnishment.81
Furthermore, the TDRA reinforces express exclusions of trademark dilution
claims; specifically, allegations of trademark dilution by blurring or tarnishment

Group, 68 U.S.P.Q.2d, 1893, 1904 (2003) (providing examples of various interpretations of

the Supreme Court’s dicta in Nike Inc. v. Variety Wholesalers, 274 F. Supp. 2d. 1352, 1372
(S.D. Ga. 2003) and Pinehurst, Inc. v. Wick, 256 F. Supp. 2d 424, 431-432 (M.D.N.C. 2003)).
72
Savin Corp. v. The Savin Group, id.
73
Id.,1904-5.
74
Id.
75
Id.
76
353 F.3d 528, 535 (7th Cir. 2003). See also Lee Middleton v. Seymour supra note 71.
77
Id.
78
Id.
79
See generally, The purpose of the TDRA, available at http://www.govtrack.us/congress/
record.xpd?id=109h20050419-33&bill=h109-683 (Last visited on August 18, 2008).
80
Trademark Dilution Revision Act, H.R. 683, 109th Cong. § 2(c) (2) (2005). This comment
asserts that although the ‘likelihood’ standard will expand dilution claims, at least the
refinement of the fame requirement will serve to retrench that expansion to some degree;
thus hopefully resulting in less litigation.
81
Trademark Dilution Revision Act, H.R. 683, 109th Cong. § 2(c)(2)(B)-(C) (2005).

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648 NUJS LAW REVIEW 1 NUJS L. Rev. (2008)

will fail in cases involving any fair use, all forms of news reporting and
commentary, and any non-commercial use.82

VI. ANALYSIS OF TRADEMARK DILUTION REVISION ACT,

2005
The most critical aspect of the TDRA is its express inclusion of likelihood
of dilution as the operative standard.83 Establishing the ‘likely to cause dilution’
proof standard would have been of little practical merit without clarification of what
constitutes ‘dilution’, especially in light of the Moseley decision. The TDRA provides
much needed clarity in this regard. The FTDA had a single definition for ‘dilution’.84
This definition simply failed to elucidate the standards to be applied in cases of
alleged dilution. The Supreme Court in Moseley remarked that the FTDA, by defining
dilution in this manner, encompassed the phenomenon known as ‘blurring’ but
questioned whether the precise text of the definition encompassed tarnishment.85
The TDRA now expressly defines two species of dilution, ‘dilution by blurring’ and
‘dilution by tarnishment’, each comprising a separate cause of action with appropriately
different legal standards.86 For each cause of action, the underlying phenomenon
causing dilution harm is addressed specifically, in recognition that the nature of
dilution harm resulting from blurring is different from that resulting from tarnishment.
For blurring, the ‘distinctiveness’ of the mark is impaired by the association, whereas
for tarnishment, the reputation of the mark is harmed by the association.

In addition, the TDRA creates a new standard for demonstrating that a

mark is famous: it must be ‘widely recognized by the general consuming public of
the US as a designation of source’ and reduces the number of guiding factors in the
analysis of the fame of the mark to four. It also makes clear that a mark that is not
inherently distinctive, but that has strong secondary meaning, can be famous and
appropriate for dilution protection.87 Since none of the existing state statutes
contains such definitions, the result of the TDRA is that state laws are nearly

82
Id., § 2(c)(3) (2005).
83
See generally, Scott Duval, The Trademark Dilution Revision Act of 2006: Balanced Protection
for Famous Brands, 97 TRADEMARK REP. 1252, 1258 (2007).
84
FTDA defined dilution as the “lessening of the capacity of a famous mark to identify and
distinguish goods and services”.
85
Moseley v. Victoria supra note 12.
86
Dilution by blurring is “association arising from the similarity between a mark or trade name
and a famous mark that impairs the distinctiveness of the famous mark.” TDRA, 15 U.S.C.
§ 1125(c)(2)(B). Dilution by tarnishment is ‘association arising from the similarity between
a mark or trade name and a famous mark that harms the reputation of the famous mark’. 15
U.S.C. § 1125(c)(2)(C). See also, Louis Vuitton Maletier S.A. v. Haute Diggity Dog, LLC,
2007 WL 3348013 (4th Circuit., No. 06-2267, November. 13, 2007), where the Fourth
Circuit held that in the context of blurring, “distinctiveness refers to the ability of the
famous mark uniquely to identify a single source and thus maintain its selling power.” See
generally, Scott Duval, supra note 83.
87
It also states that a famous mark that is “distinctive, whether inherently or through acquired
distinctiveness”, can qualify for protection against dilution. Supra note 83.

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 TRADEMARK DILUTION DOCTRINE 649

superfluous.88 Further, while many scholars have argued that it is premature to

enjoin a user of a mark before actual harm is done,89 it is also believed that requiring
the owner of a famous mark, threatened with dilution of the mark’s distinctiveness,
to wait until the damage is done before granting an injunction is contrary to the
principles of equity.90

VII. COMPARISON OF TRADEMARK DILUTION DOCTRINE

IN THE UNITED STATES WITH ‘WELL KNOWN MARKS’ IN
THE UNITED KINGDOM
The Well-Known Marks doctrine protects marks that have become well-
known in a geographic area in association with certain goods or services.91 According
to the Agreement on Trade Related Aspects of Intellectual Property Rights (hereinafter
TRIPS Agreement), well known marks are also protected against use with other goods
or services, even if there is no use with those goods and services, if that use would
lead consumers to believe that there is a connection between the source of the goods
or services that are well-known and those that are not.92 The protection of the well-
known marks doctrine extends to protect a mark within a nation if the mark “is well-
known in that nation even though the mark is not actually used or registered in that
nation.”93 One common use of the doctrine is to fight trademark pirates who rush to
register a famous mark on goods on which it has not yet been registered in a nation by
the legitimate foreign owner.94 In order to qualify for the protection, the mark must be
considered ‘well-known’ or ‘famous’ in that region.

A comparison of trademark dilution doctrine in US with the protection

against dilution of well known marks in the EU shows that the differences between

88
For a detailed discussion on this point, see David Welkowitz, State of the State: Is there a
Future for State Dilution Laws, 24 SANTA CLARA COMPUTER & HIGH TECH. L. J. 681, 693 (2007).
89
On the criticism of the TDRA on this point, see Anna Wong, supra note 4. See also, Matthew
Sumpter, Brands, Dilution and Parody: An Indigestible Dish, 11 NZBLQ 29, 42-4 (2005).
90
Moseley v. Victoria supra note 12 (Kennedy, J., concurring) (Equity principles encourage those
who are injured to assert their rights promptly. A holder of a famous mark threatened with
diminishment of the mark’s capacity to serve its purpose should not be forced to wait until the
damage is done and the distinctiveness of the mark has been eroded). In defence of the TDRA on
this point, see, Matthew Oesterle, It is as clear as Mud: A Call to Amend the Federal Trademark
Dilution Act of 1995, 81 CHI. KENT L. REV. 235, 268 (2006). See also, Julie Frymark, Trademark
Dilution: A Proposal to Stop the Infection from Spreading, 38 VAL. U. L. REV. 165, 213 (2003)
(recommending Congress amend the FTDA to reflect a likelihood of dilution standard) and
Jennifer Mae Slonaker, Conflicting Interpretations of the Federal Trademark Dilution Act Create
Inadequate Famous Mark Protection, 26 U. DAYTON L. REV. 121, 124 (2000).
91
Tashia Bunch, Well Known Marks Doctrine: Where do we go from here? 90 J. PAT. & TRADEMARK
OFF. SOC’Y 227, 228 (2008).
92
Agreement on Trade-related aspects of Intellectual Property Rights (TRIPS), 1994, Part II,
§ 2, Article 16, 108 Stat. 4809.
93
J. THOMAS MCCARTHY, MCCARTHY ON TRADEMARKS AND UNFAIR COMPETITION 29-109 (1984).
94
Id.

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the two are quite fundamental.95 The Paris Convention, the TRIPS Agreement and the
E.U. Directive all contain provisions for the protection of marks that enjoy an increased
recognition or reputation, labeled by the term ‘well-known mark’ or ‘mark with a
reputation’. These provisions, however, neither define these terms nor use them with
an identical meaning or the same legal consequences, and, interestingly, they do not
use the term ‘famous mark’, which is used in the TDRA and in the national laws in
some other countries.96 This suggests that these regimes provide dilution protection
at a lower level of recognition than required by the TDRA for the term ‘famous mark’.
Prima facie, therefore, EU laws seem to grant a greater scope of protection than the
US laws as it determines the eligibility of marks based on their recognition not only by
the general consuming public but also by specialized consumer groups.

In 2000, WIPO created guidelines for determining whether or not a mark

is well known.97 In an effort to establish a unified mark that would allow goods to
move freely between nations, the European Community sought to harmonize many
different intellectual property laws, including trademark regulations. The Trademark
Harmonization Directive98 meets that goal by providing a system of trademark
protections. Directives are generally binding as to the ‘result to be achieved’ but
individual nations may choose the form in which those results will be achieved.99
Provisions in Articles 4 and 5 provide protections that are similar to those found in
the FTDA. Article 5(1) (b) gives the owner of a mark the right to prevent uses that
may either create a ‘likelihood of confusion’ or ‘likelihood of association’. Some
have argued that this provision protects marks even when confusion has not been
demonstrated.100 Furthermore, Article 5(2) provides:

“Any Member State may also provide that the proprietor shall be
entitled to prevent all third parties not having his consent from
using in the course of trade any sign which is identical with, or
similar to, the trade mark in relation to goods or services which are
not similar to those for which the trade mark is registered, where the

95
Marcus Luepke, Taking Unfair Advantage or Diluting a Famous Mark: A 20/20 Perspective
on the Blurred Differences between US and EU Dilution Law, 98 TRADEMARK REP. 789 (2008).
96
Such as in Germany, where the status ‘famous mark’ designates the highest level of recognition,
which traditionally allows protection against dilutive uses. See generally, FREDERICK W. MOSTERT,
FAMOUS AND WELL-KNOWN MARKS: AN INTERNATIONAL ANALYSIS 4-179 (2004).
97
Keola Whittaker, supra note 66. See also, World Intellectual Property Organization, Joint
Recommendation Concerning Provisions On the Protection of Well-Known Marks, 9-11
(2000), available at http://www.wipo.org/about-ip/en/development_iplaw/pub833.htm (Last
visited on May 3, 2009)(showing guidelines for determining whether a mark is well-known).
98
First Council Directive 89/104, 1989 O.J. (L 40) 1 (EEC). (also known as Trademark
Harmonization Code).
99
See Consolidated Version of the Treaty Establishing the European Community, December 24,
2002, 2002 O.J. (C 325) 33, 132 (“A directive shall be binding, as to the result to be achieved
[...] but shall leave to the national authorities the choice of form and methods”).
100
DAVID S. WELKOWITZ, TRADEMARK DILUTION: FEDERAL, STATE, AND INTERNATIONAL LAW, 439 (2006) “It
has also been argued that the ‘likelihood of association’ language in Article 5(1) (b) […]
permits protection of marks without any demonstration of confusion”.

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 TRADEMARK DILUTION DOCTRINE 651

latter has a reputation in the Member State and where use of that
sign without due cause takes unfair advantage of, or is detrimental
to, the distinctive character or the repute of the trade mark.” 101

As its language indicates, Article 5(2) is not binding on member nations;

nonetheless most states have implemented its protections.102 While Article 5 seems
to provide protections similar to those in the FTDA, there has been varying
applications in EU member nations.

The United Kingdom implemented the Trademark Harmonization

Directive in 1994 by enacting the Trademark Act, 1994. The strongest protections
for trademark dilution are granted to marks in Section 10(3) of the Act, which
specifically protects registered trademarks and prohibits use of the mark:

“[…] in relation to goods or services which are not similar to

those for which the trade mark is registered, where the trade
mark has a reputation in the United Kingdom and the use of the
sign [. . .] takes unfair advantage of, or is detrimental to, the
distinctive character or the repute of the trade mark.”103

Unlike other sections of the Act, a claim under Section 10(3) does not
require proof of confusion. Interpretations of the statute, like interpretations of
similar statutes in the U.S. and Japan, have confused the distinction between
trademark dilution and other trademark claims and have required a showing of
confusion for claims under Section 10(3). Baywatch Prod. Co. Ltd. v. Home Video
Channel104 pitted the popular U.S. television series Baywatch that features male
and female lifeguards usually wearing red bathing suits against the Adult Channel,
which broadcast episodes of a pornographic film series, entitled ‘Babewatch’. Like
Baywatch, Babewatch featured lifeguards wearing red bathing suits.105 Instead of
saving drowning victims, however, these ‘lifeguards’ engaged in sexual acts.106
Seeking a preliminary injunction against the Adult Film Channel, Baywatch asserted
actions under Section10(2) and Section 10(3) of the Trade Marks Act as well as a
passing off claim.107 While Section 10(2) requires a showing of a ‘likelihood of
confusion’, Section 10(3) does not have such a requirement. Baywatch, however,
admitted that consumers would not be confused between the television series and
the pornographic film.108 In determining Baywatch’s claim under Section 10(3), the

101
Article 5 (2), Trademark Harmonization Code, First Council Directive 89/104, 1989 O.J. (L
40) 1 (EEC).
102
W ELKOWITZ, supra note 100, 439 (“As its language indicates, it was not mandatory that
countries adopt this provision [...] but it has been widely implemented”).
103
§ 10(3) (b), Trademark Act, 1994.
104
[1997] F.S.R. 22.
105
Baywatch Prod. Co. Ltd. v. Home Video Channel, [1997] F.S.R. 22, 24.
106
Id.
107
Id., 26.
108
Id., 27.

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Chancery Division held that it would be illogical to grant greater protection to

famous marks with regards to non-similar goods or services.109 Despite the wording
of the statute, the judge found that since the television show and the pornographic
video are not similar goods, they will not cause confusion of source and, therefore,
the plaintiff has no claim under Section10(3). It is not clear under Baywatch case if
the Chancery Division would distinguish between Sections 10(2) and 10(3) or if
they would provide any greater protections to well-known marks.

VIII. CONCLUSION
In 1927, Frank Schechter displayed remarkable prescience when he stated:

“The fact that through the existence of the telephone, the

automobile, the motor bus, the high-speed interurban trolley, and
the railroad, the consumer now projects his shopping far from home
and comes to rely more and more upon trademarks and tradenames
as symbols of quality and guaranties of satisfaction.”110

In this era of globalization, worldwide branding has become an

increasingly important marketing tool as companies seek to provide their goods
and services to a public that is less and less restricted by international borders.
As the Internet becomes a common form of communicating to the four corners
of the world, trademarks may become key assets in a global branding campaign.
Entities conducting business internationally must be increasingly vigilant
against brand piracy.

Given these diminishing barriers to trade and increase in globalization,

the issue as to protection of famous and well-known trademarks has become even
more important. Internationally, the trend appears to be moving towards making
dilution-style arguments more readily available to owners of famous and well-known
marks. A potential model for a dilution statute already exists in the US in form of the
TRDA. It remains to be seen what will eventually develop in this increasingly
important area of the law.

109
Id., 29.
110
Frank Schechter, supra note 23.

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