(Updated September 25, 2006)

H.R. 683
Trademark Dilution Revision Act of 2005

Floor Situation

The House considered H.R. 683, under suspension of the rules, on Tuesday, April 19, 2005.  It is debatable for 40 minutes, may not be amended, and requires a two-thirds majority vote for passage.

Summary

H.R. 683 amends the Federal Trademark Dilution Act in the wake of a recent Supreme Court decision and conflicting circuit case law on the matter. The legislation is based on a submission by the International Trademark Association (INTA).

H.R. 683 strikes the current text of the dilution statute and substitutes the following provisions: Subject to the principles of equity, the owner of a famous distinctive mark is entitled to an injunction against any person who commences use in commerce a mark that is likely to cause dilution by blurring or tarnishment.

H.R. 683 specifies that injunctive relief is appropriate even if there is no:

A mark may only be “famous” if it is widely recognized by the general consuming public in the United States as a source designation of the goods or services of the mark’s owner. In determining whether a mark is famous, a court is permitted to consider “all relevant factors” in addition to prescribed conditions set forth in H.R. 683, including the duration, extent, and geographic reach of advertising and publicity of the mark.

Again, a court is permitted to consider all relevant factors in determining the presence of dilution by blurring. Specific factors that provide guidance in this regard include –

H.R. 683 enumerates specific defenses to a dilution action: fair use in comparative commercial advertising or promotion to identify the competing goods, noncommercial use of source designation, all forms of news reporting and news commentary, and instances of “descriptive” fair use.

The owner of a famous mark is only entitled to injunctive relief under H.R. 683, unless, in an action based on dilution by blurring, the defendant willfully intended to trade on the famous mark’s recognition, or in an action based on dilution by tarnishment, the defendant willfully intended to trade on the famous mark’s reputation. In either case, the owner may also seek damages, costs, and attorneys’ fees, as well as destruction of the infringing articles under separate Lanham Act provisions.

Substantial portions of H.R. 683 are based on the existing FTDA, but there are conspicuous differences between the two texts. Under H.R. 683 , and in response to the Mosely decision, actual harm is not a prerequisite to injunctive relief. H.R. 683 also defines dilution by “blurring” as well as by “tarnishment.” In addition, it expands the threshold of “fame” and thereby denies protection for marks that are famous only in “niche” markets. Finally, H.R. 683 would protect trade dress or product configuration and it would not preempt state remedies for dilution.

Background

Trademark law “identifies” goods and services. When an individual encounters a mark (e.g., a word or symbol) in a store or watching a commercial, he or she can develop an association between a product or service and its corresponding quality, brand reputation, or origin. Generally, a trademark consists of the name or logo of a product. For example, the restaurant chain McDonald’s has trademarks in its name, its golden arches logo, and other marks associated with its business. In addition, trademark law also may protect the distinctive features of a product’s packaging. Examples of famous and distinctive packaging include the shape of Coca-Cola’s bottle or Tiffany’s little blue jewelry box.

Dilution Generally and the “Federal Trademark Dilution Act” (“FTDA”)

Trademark rights are unique because they are based on federal as well as state law. In fact, many states offer trademark protection against “dilution.” Dilution is defined as “the lessening of the capacity of a famous mark to identify and distinguish goods or services regardless of the presence or absence of: (a) competition between the owner of the famous mark and other parties; or (b) likelihood of confusion, mistake, or deception. Courts have defined dilution as either the blurring of a mark’s product identification or the tarnishment of the affirmative associations a mark has come to convey.

Dilution does not rely upon the standard test of infringement, that is, likelihood of confusion, deception, or mistake. Rather, it applies when the unauthorized use of a famous mark reduces the public’s perception that the mark signifies something unique, singular, or particular. In other words, dilution can result in the loss of the mark’s distinctiveness and, in worst-case scenarios, the owner’s rights in it.

In order to promote uniformity and certainty for trademark owners, the FTDA statute was enacted in 1995. The purpose of the FTDA is to protect famous trademarks, whether registered or unregistered, from subsequent uses that blur the distinctiveness of the mark or tarnish or disparage it, even in the absence of a likelihood of confusion. The FTDA applies when unauthorized users attempt to trade upon the goodwill and established renown of such marks, and thereby dilute their distinctive quality.

The FTDA specifies the following factors that a court may consider, but is not limited to, in determining whether a mark is distinctive and famous:

• the degree of inherent or acquired distinctiveness of the mark;
• the duration and extent of use of the mark in connection with the goods or services with which the mark is used;
• the duration and extent of advertising and publicity of the mark;
• the geographical extent of the trading area in which the mark is used;
• the channels of trade for the goods or services with which the mark is used;
• 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; and
• the nature and extent of use of the same or similar marks by third parties.

Mosely v. V Secret Catalogue, Inc.

Following passage of the FTDA, the circuit courts of appeals split as to whether the statute required the owner of a famous mark to prove actual harm as a prerequisite to injunctive relief. This question was addressed by the Supreme Court in the case of Mosely v. V Secret Catalogue, Inc. In a dilution action between the lingerie company Victoria’s Secret and a small retail company (Victor’s Little Secret) that sold, among other items, adult “novelties,” the Court determined that the FTDA “. . . unambiguously requires a showing of actual dilution, rather than a likelihood of dilution.”

Legislative History

H.R. 683 was introduced by Rep. Smith (TX) on February 9, 2005.  On March 9, 2005, the bill was reported from the Judiciary Committee by voice vote. On March 17, 2005, House Report 109-23 was filed.  On April 19, 2005, the bill was agreed to by a recorded vote of 411 - 8 (Roll no. 109). The Senate passed the bill with amendments, by unanimous consent, on March 8, 2006.

For additional information or questions, please contact the Judiciary Committee at 5-3951.