Dilution of Trademarks, Service Marks, and Trade Names Law Definition Elements Defense
Definition
A dilution cause of action under federal and California law have the same elements: (1) the mark must be famous and distinctive; (2) the defendant must use the mark in commerce; (3) defendant’s use must begin after the mark is famous; and (4) defendant’s use must be likely to cause dilution, such as by blurring or tarnishment. (Lions Gate Entertainment Inc. v. TD Ameritrade Services Company, Inc. (C.D. Cal. 2016) 170 F.Supp.3d 1249.)
A trademark dilution claim under California state law is subject to the same standards as a claim under the FTDA. (Vietnam Reform Party v. Viet Tan – Vietnam Reform Party (N.D. Cal. 2019) 416 F.Supp.3d 948.)
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Element 1: Famous and Distinctive Mark or Trade Name
“Trademark” means any word, name, symbol, or device or any combination thereof adopted and used by a person to identify goods made or sold by him and to distinguish them from goods made or sold by others. (Cal. Bus. & Prof. Code, §14202.)
“Service Mark” means a mark used in the sale or advertising of services to identify the services of one person and distinguish them from the services of others. (Cal. Bus. & Prof. Code, §14202.)
“Trade Name” means a word, name, symbol, device or any combination thereof used by a person to identify his business, vocation or occupation and distinguish it from the business, vocation or occupation of others. (Cal. Bus. & Prof. Code, §14202.)
In determining whether a mark is famous, as required to support a trademark dilution claim under the Federal Trademark Dilution Act (FTDA) and California statute prohibiting trademark dilution, a district court may consider all relevant factors, including: (1) the duration, extent, and geographic reach of advertising and publicity of the mark; (2) the amount, volume, and geographic extent of sales of goods or services offered under the mark; (3) the extent of actual recognition of the mark; and (4) whether the mark is registered; this is a high standard. (Pinterest, Inc. v. Pintrips, Inc. (N.D. Cal. 2015) 140 F.Supp.3d 997.)
In order to qualify as “famous,” as required to support a trademark dilution claim under the FTDA and California statute prohibiting trademark dilution, the asserted mark must have such powerful consumer associations that even non-competing uses can impinge on their value. (Pinterest, Inc. v. Pintrips, Inc. (N.D. Cal. 2015) 140 F.Supp.3d 997.)
Element 2: Use in Commerce
Although neither the FTDA nor California state law requires a showing of competition or likelihood of confusion to succeed on a trademark dilution claim, the second element of the dilution analysis, whether the defendant is making use of the mark in commerce, requires the plaintiff to establish that the mark used by the alleged diluter is identical, or nearly identical, to the protected mark. (Vietnam Reform Party v. Viet Tan – Vietnam Reform Party (N.D. Cal. 2019) 416 F.Supp.3d 948.)
Element 3: Likelihood
The plaintiff need not prove that dilution has occurred, but only that it is “likely” to occur unless the defendant is enjoined from using the trademark or trade name in question. See Academy of Motion Picture Arts and Sciences v. Creative House Promotions, Inc., 944 F.2d 1446, 1457 (9th Cir. 1991).
Element 4: Dilution of Distinctive Quality
“Dilution” relates to the erosion of the public’s identification of a very strong mark with its owner, thus diminishing its effectiveness. See E. & J. Gallo Winery v. Consorzio Del Gallo Nero, 782 F. Supp. 457, 469 (N.D. Cal. 1991). Likelihood of confusion is not an element of a California dilution claim. Thane International, Inc. v. Trek Bicycle Corporation, 305 F.3d 894, 904 (9th Cir. 2002).
Under California law, a cause of action for trademark dilution protects only famous trademarks. Avery Dennison Corp. v. Sumpton, 189 F. 3d 868, 874 (9th Cir. 1999) (the trademarks “Avery” and “Dennison” used by seller of office products were not “famous,” and thus were not entitled to protection under federal or California law).
To be “famous,” as required under federal and California trademark statutes, a mark must be “truly prominent and renowned,” and may not be merely distinctive. Avery Dennison Corp. v. Sumpton, 189 F. 3d 868, 877 (9th Cir. 1999). Marks that are famous only within a specialized or “niche” market receive more limited protection than those famous in the general marketplace. Thane International, Inc. v. Trek Bicycle Corporation, 305 F.3d 894, 911 (9th Cir. 2002).
The legal requirements for a dilution claim under California law are substantially similar to the requirements under the Federal Trademark Dilution Act. Thane International, Inc. v. Trek Bicycle Corporation, 305 F.3d 894, 907 n.8 (9th Cir. 2002).
The purpose of the California anti-dilution statute is to protect the owner of a mark from injury to the mark; this doctrine applies even when there is no likelihood of confusion between plaintiff’s and defendant’s products, if defendant’s action or usage tends to tarnish, degrade, or dilute the distinctive quality of plaintiff’s mark. Brown v. Adidas Int’l, 938 F. Supp. 628, 635 (S.D. Cal. 1996).
The anti-dilution statute protects a mark against:
- Association with something unsavory or degrading (Accuride Int’l, Inc. v. Accuride Corp., 871 F.2d 1531, 1538 (9th Cir. 1989)).
- Tarnishing of a mark caused by association with a poorly manufactured product (see, e.g., McFly, Inc. v. Universal City Studios, Inc., 228 U.S.P.Q. 153, 161 (C.D. Cal. 1985) (use of surname McFly in film Back to the Future did not dilute mark used by group of restaurants and bars, in part because of the high quality of the junior user’s goods and services)).
- Tendency of a widely-used product name to become the generic term for the product (see, e.g., Sykes Lab., Inc. v. Kalvin, 610 F. Supp. 849, 856-59 (C.D. Cal. 1985)).
- Tarnishing, degrading or diluting the distinctive quality of the mark (see, e.g., Toho Co. v. Sears, Roebuck & Co., 645 F.2d 788, 793 (9th Cir. 1981)).
The antidilution statute is directed against the “whittling away” of a plaintiff’s mark. Whittling away will not occur unless there is at least some subliminal connection in a buyer’s mind between the two parties’ uses of their marks. Such connection is not the same as likelihood of confusion, but it does require a threshold showing of some mental association between the protected mark and the alleged diluter. Fruit of the Loom, Inc. v. Girouard, 994 F. 2d 1359, 1363 (9th Cir. 1993); see also Academy of Motion Picture Arts and Sciences v. Creative House Promotions, Inc., 944 F. 2d 1446, 1457 (9th Cir. 1991); E. & J. Gallo Winery v. Pasatiempos Gallo, S.A., 905 F. Supp. 1403, 1416 (E.D. Cal. 1994) (focus of trademark dilution claim under California law is to prevent gradual whittling away of firm’s distinctive trademark, rather than to protect customers).
The mark TREK for bicycles had achieved fame only in its niche market. Therefore, defendant was entitled to summary judgment on plaintiff’s dilution claim arising from defendant’s use of ORBITREK for stationary exercise machines. Thane International, Inc. v. Trek Bicycle Corporation, 305 F.3d 894 (9th Cir. 2002).
The Academy of Motion Picture Arts could maintain an unlawful dilution action against a company selling an award similar in appearance to the Academy’s Oscar award, even though the Academy had not shown actual dilution and had not suffered any monetary damage. Academy of Motion Picture Arts and Sciences v. Creative House Promotions, Inc., 944 F.2d 1446, 1457 (9th Cir. 1991).
The phrases “FRUIT FLOPS” and “FRUIT CUPS” used to market thongs and bustiers decorated with plastic fruit did not dilute the good will and reputation associated with the “Fruit of the Loom” marks in violation of the California antidilution statute even though “fruit” was a strong mark in the apparel industry. The word “fruit” was not famous to qualify for protection, and there was no kind of mental association in a reasonable buyer’s mind between the protected mark and the alleged diluter. Fruit of the Loom, Inc. v. Girouard, 994 F. 2d 1359, 1362-63 (9th Cir. 1993).
Sears’ sales of garbage bags displaying the word “Bagzilla” and depicting a comic reptilian creature did not impair the effectiveness of the name and image of Godzilla, which the plaintiffs license to merchandisers. Toho Co., Ltd. v. Sears, Roebuck & Co., 645 F.2d 788, 793 (9th Cir. 1981).
The defendant’s use of “eye” as the name of a weekly tabloid did not dilute plaintiff’s use of “Public Eye” on a weekly column. The court found that “Public Eye” is not highly distinctive, the word “eye” appears in several other contexts in the media, the parties visually display the word “eye” differently, and giving plaintiff strong protection would essentially corner the market on the everyday word “eye”. Metro Publishing, Ltd. v. San Jose Mercury News, Inc., 861 F. Supp. 870, 880-81 (N.D. Cal. 1994).
Defendant’s use of the “Gallo” mark on playing cards and board games constituted dilution of the E. & J. Gallo Winery’s “Gallo” mark where such use likely detracted from the unique character of the winery’s “Gallo” mark. E. & J. Gallo Winery v. Pasatiempos Gallo, S.A., 905 F. Supp. 1403, 1416 (E.D. Cal. 1994).
The court granted summary judgment for defendant on plaintiff’s dilution claim because packaging and word marks for the “Teddy Ruxpin” and “TV Teddy” teddy bears were not similar. Alchemy II, Inc. v. Yes! Entertainment Corp., 844 F. Supp. 560, 571 (C.D. Cal. 1994).
A thrift store owner’s use of “Sack’s Thrift Avenue” diluted the distinctive value of the famous and strong “Sak’s Fifth Avenue” mark. Saks & Co. v. Hill, 843 F. Supp. 620, 624 (S.D. Cal. 1993).
The court granted a preliminary injunction against using the “Voice Blaster” mark on voice recognition software because it diluted the “Sound Blaster” mark used on computer sound boards. Creative Tech. Ltd. v. SRT Inc., 29 U.S.P.Q.2d 1474, 1477 (N.D. Cal. 1993).
The court found that an Italian trade association’s use of “Gallo Nero” in connection with wines was likely to detract from the distinctiveness of the E. & J. Gallo Winery’s “Gallo” trademark, where the winery had sold some two billion bottles of wine bearing the “Gallo” mark and had spent some $500 million in promoting the “Gallo” brand of wines. E. & J. Gallo Winery v. Consorzio Del Gallo Nero, 782 F. Supp. 457, 469-70 (N.D. Cal. 1991).
Use of “Century 31” for real estate brokerage services was likely to dilute the famous “Century 21” mark, which is also for real estate brokerage services. Century 21 Real Estate Corp. v. Magee, 19 U.S.P.Q.2d 1530, 1535 (C.D. Cal. 1991).
McDonald’s prevailed on its claim against a company that used a single golden arch logo on its computers and computer components because it diluted McDonald’s own “golden arches” logo, despite defendant’s federal trademark registration of its single golden arch logo. McDonald’s Corp. v. Arche Technologies Inc., 17 U.S.P.Q.2d 1557, 1560 (N.D. Cal. 1990).
Owner of the “TOYS ‘R’ US” mark prevailed in its dilution claim against the owner of the “PHONES-R-US” retail store, where the owner of “TOYS ‘R’ US” had successfully opposed federal service mark registration of “PHONES-R-US.” Geoffrey Inc. v. Stratton, 16 U.S.P.Q.2d 1691, 1696 (C.D. Cal. 1990).
“Crime Channel” trademark owner alleged that television network’s use of mark diluted the value of the mark by suggesting that the owner’s product causes violent behavior in children. The court found that the trademark owner had stated a claim for trademark dilution under California and federal law because the mark was “inherently distinctive” and “had become known to the consuming public as identifying and distinguishing owner exclusively and uniquely as source of services to which mark applied.” Films of Distinction, Inc. v. Allegro Film Productions, Inc., 12 F. Supp. 2d 1068, 1078-79 (C.D. Cal. 1998).
The court found that use of the marks DOGIVA and CATIVA in marketing pet biscuits was likely to dilute the distinctive quality of registered trademark GODIVA, used in the marketing of chocolates and other food products. Thus, owner of mark GODIVA was entitled to injunctive relief under California law, given the mark’s inherently distinctive and well-known nature. Grey v. Campbell Soup Co., 650 F. Supp .1166, 1175-76 (C.D. Cal. 1986).
Remedies
Injunction
The only remedy available in a trademark dilution claim is injunction. (Cal. Bus. & Prof. Code, §14247.) A party is entitled to injunctive relief if there is a likelihood of dilution of the distinctive quality of a mark or trade name, notwithstanding the absence of competition between the parties or the absence of confusion as to the source of goods or services. (Cal. Bus. & Prof. Code, §14247.)
Statute of Limitations
California law does not specifically set forth a statute of limitations for this cause of action. The statute of limitations for a cause of action created by a statute is three years (Cal. Civ. Proc. Code §338(c)); the statute of limitations for misappropriation or conversion of intangible interests is two years (Cal. Civ. Proc. Code §339(1). However, it may be that there is no statute of limitations for this cause of action because it is a continuing tort and injunction is the only remedy.
Affirmative Defenses
Registrant’s Consent
Use must be without the consent of registrant. (See Cal. Bus. & Prof. Code, § 14320(a)(1).)
Prior Use
(Cal. Bus. & Prof. Code, §14245.)
Abandonment
Abandonment under Lanham Act occurs when: (1) use has been discontinued with intent not to resume such use, or (2) the owner’s course of conduct causes the mark to become the generic name for the goods or services. (See California Western School of Law v. California Western University (1981) 125 Cal.App.3d 1002, 1006; see also 15 U.S.C. §1127.)
Laches
Central purpose of laches doctrine in trademark field is to discourage trademark holder from waiting to bring suit until junior user has begun to establish secondary meaning in its mark. (See California Western School of Law v. California Western University (1981) 125 Cal.App.3d 1002, 1006; see also MDT Corp. v. New York Stock Exchange, Inc. (C.D. Cal. 1994) 858 F. Supp. 1028, 1033.)
Fair Use
Fair use a defense to any Lanham Act infringement in film and DVD cover. (Winchester Mystery House, LLC v. Global Asylum, Inc. (2012) 210 Cal.App.4th 579.)
Fraud in Obtaining Trademark Registration
Although the state trademark statute does not specifically provide for this defense, it is likely that state courts would follow the example of federal law. (See 15 U.S.C. §1064(3).)