Protecting Famous, Distinctive Marks: The Trademark Dilution Revision Act of 2006 (CRS Report for Congress)
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| Release Date |
Oct. 16, 2006 |
| Report Number |
RL33393 |
| Report Type |
Report |
| Authors |
Brian T. Yeh, American Law Division |
| Source Agency |
Congressional Research Service |
Summary:
The Federal Trademark Dilution Act of 1995 (FTDA) amended section 43 of the Trademark Act of 1946 to provide a new federal cause of action for the dilution of famous, distinctive marks. "Trademark dilution" is statutorily defined in 15 U.S.C. § 1127 to mean "the lessening of the capacity of a famous mark to identify and distinguish goods or services, regardless of the presence or absence of ... (1) competition between the owner of the famous mark and other parties, or (2) likelihood of confusion, mistake, or deception." Under the FTDA, the owner of a famous mark may seek an injunction against another person's commercial use 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.
Since the FTDA was enacted, however, some trademark owners have sought to use the law in ways that arguably go beyond the statute's scope and purpose (e.g., owners of insufficiently famous marks attempting to sustain a FTDA action, or others trying to apply the FTDA to prohibit parody and criticism of their marks). In adjudicating these expansive claims, several federal courts have narrowly interpreted the FTDA (notably the United States Supreme Court in the 2003 case Moseley v. V Secret Catalogue, Inc.), and protection against trademark dilution is said to be challenging if not impossible to obtain, according to many intellectual property scholars. There is a split among the regional federal circuit courts of appeal over the meaning and application of several central FTDA elements. For example, one federal circuit court has determined that the federal anti-dilution law does not apply to "descriptive" marks that have acquired distinctiveness over time, including famous ones such as MCDONALD'S or KRAFT, because they lack "inherent distinctiveness."
The Trademark Dilution Revision Act of 2006 (H.R. 683) is a legislative response to these issues, offering more precise definitions for key terms in the FTDA (such as "famous," "distinctive," "blurring," and "tarnishment") and expressly clarifying standards of proof and other eligibility requirements to obtain relief under the FTDA. Critics of H.R. 683, however, raise concerns that the bill too heavily favors major corporations over small and future businesses. In addition, they worry that the bill could negatively affect free speech rights, small business commercial speech, and consumer interests. Finally, they believe that the bill amends federal trademark law in a manner that essentially confers to major corporations a monopoly over the use of famous marks that may contain common words and phrases.
H.R. 683 was passed by the House on a vote of 411 to 8, on April 19, 2005. The Senate passed H.R. 683 with an amendment in the nature of a substitute, by unanimous consent, on March 8, 2006. Among other things, the amendment added a non-commercial use liability exclusion to protect free speech interests, and addressed concerns raised by Internet service providers over secondary liability for trademark dilution by their end users. On September 25, 2006, the House, by unanimous consent, agreed to the Senate amendment. The President signed the bill into law on October 6, 2006, P.L. 109-312.
