On September 25, 2006 Congress passed a bill to help protect famous brands from being "diluted," or becoming less distinctive, through use on unrelated products like "Buick aspirin" or "DuPont shoes." The Trademark Dilution Revision Act of 2006, H.R. 683, expected to be signed into law shortly, replaces the current requirement of "actual dilution" with "likelihood of dilution"—making it easier for owners of famous trademarks to pursue claims for dilution.
The new law overturns a 2003 U.S. Supreme Court decision sharply limiting the original federal trademark dilution statute, passed in 1996. The original law was enacted because dilution is not covered by trademark infringement law.
Trademark infringement law protects consumers from being confused by the use of similar marks on related products. But when a famous mark like "Kodak" is used for a product the brand owner doesn’t make, like bicycles, most people are not confused, so there is no infringement.
Nevertheless, if other companies could offer Kodak bicycles, Kodak beer, Kodak courier services, and so forth, the famous Kodak brand would become "blurred." Likewise, if a famous mark were used for an unsavory product—like altering the Coca Cola logo to read "Enjoy Cocaine"—that could "tarnish" the mark.
So while "blurring" or "tarnishment" do not confuse consumers, they hurt brand owners, by diluting the distinctiveness of marks in which they have invested huge amounts of advertising dollars. The 1996 law sought to prevent both kinds of dilution, and brand owners used it successfully for several years.
A 2003 Supreme Court decision involving retailer Victoria’s Secret changed that. Victoria’s Secret claimed that a Kentucky seller of lingerie and adult novelties called "Victor’s Secret" diluted its mark by tarnishing it. Lower courts ruled for Victoria’s Secret, but the Supreme Court reversed, holding that the law required proof not just that the famous mark was likely to be diluted, but suffered actual dilution.
This troubled famous brand owners, who feared that they might not be able to bring a federal dilution claim until the damage had already been done. Many simply stopped using the federal law, and instead brought their claims under older state laws like California’s and New York’s, which only require likelihood of dilution, but just have statewide effect.
Brand owners and the International Trademark Association proposed a new federal law to overturn the Victoria’s Secret case, by changing the standard of "actual dilution" to "likelihood of dilution," which Congress has now passed.
The next step is for the leaders of the two houses to confirm that the versions they passed are identical, after which the new law is expected to be signed by the President in a few weeks.
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