Dilution of trademark:

dilution

Trademark dilution is a legal clause which allows the company to prevent others from using such a mark in a way that would lessen the unique standing of the trademark. The owner of the trademark can take the legal action against anyone who purposefully blurs or tarnishes the mark.

It is somewhat related to lowering the value of earlier trademark. The mark is said to be diluted if the exclusivity of the earlier trademark gets lowered. It is a lot of different proposition than deceptive or confusing similarity.

Dilution: Later mark resulting in association with earlier mark –Section 11(1):

 

In India there has been a lot of impetus to the doctrine of dilution. One of the results for successful opposition under section 11(1) is likelihood of associating the later mark with an earlier mark.

 

If the public shall associate or are likely to associate the subsequent or junior mark with the earlier or senior mark, it is a new ground for opposition to registration introduced in the 1999 act. In the literature on law of trademarks it is referred as the doctrine of dilution.

Any action in relation to an existing trademark, if the action attempts or results in lowering the value, sales or esteem of the goods or services being made available under that trademark, is dilution of trademark.

 

Dilution may occur in many ways e.g., by use of trademark on substandard materials, undermining the selling power of the mark, or by reducing, distinctiveness or by interfering with the positive image associated with the mark; all these are included in blurring or tarnishment.

Doctrine of dilution distinct from confusing similarity:

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The doctrine of dilution is distinct and independent of the doctrine of confusing similarity or deceptive similarity. The thrust in dilution is not that confusing would result but the image of the trademark in the minds of public would be diluted irrespective of whether there is confusion in the public mind.

The underlying object of this doctrine is that there is presumption that the relevant customers start associating the trademark with a new and different source. This results in smearing or partially affecting the descriptive link between the trademark of the prior user and its goods.

In other words, the link between the mark and the goods is blurred. It amounts to not only reducing the force or value of the trademark, but also it gradually tapers the commercial value of the trademark slice by slice. Such kind of dilution is not a fair practice that is expected in trade and commerce.

Moreover, when looking at a subsequent mark placed on same, similar or dissimilar goods or services, if an average person associates the later mark with an earlier mark, it is sufficient association or likelihood of confusion for refusing the registration of the mark.

The situation is obtained by the perception of the public as to the trademark, its reach of popularity and knowledge about the goods or services which the proprietor renders under the same trademark.

Many such cases were decided under section 11 of the 1958 act (section 9(2) of 1999 act) in which trademark has been refused in relation to cognate goods where in the court granted relief under that section, as section 12 of the 1958 act was available only for same goods.

For example, refusal to register CALTEX trademark popular for petrol products discussed under section 9(2) was because of the view that if CALTEX watches were allowed in the market, public would associate them with the proprietor of CALTEX trademark for petrol.

The dilution of trademark may occur in many ways out of which two are considered prominent – Blurring and tarnishment.

When likelihood of association may arise:

The court explained that:

dilution

  • Where the public confuses may arise in three sets of circumstances;
  • Where the public makes a connection between the proprietors of the sign and those of the mark and confuses them (likelihood of indirect confusion or association);
  • If the public considers the sign which is similar to the mark and the perception of the sign reminds about the mark in the memory although the two are not confused (likelihood of association in the strict sense).

It concluded as “the terms of the provision itself exclude its application where there is no likelihood of confusion on the part of the public. Thus, the court held that “the mere association which the public might make between the two trademarks as a result of their analogous semantic content is not in itself a sufficient ground for concluding that there is a likelihood of confusion” within the meaning of article 4(1)(b) of directive.

Cases of similarity of trade dress or get-up are covered in dilution or association:

The IPAB and the court both show a tendency not to allow the copy of or imitation of the get up or trade dress, even when there is no phonetic similarity of trademarks, even if the trademarks are poles apart in the sound or spoken part of it and injunction is still issued.’

Dilution by tarnishment:

dilution

Another kind of dilution is by way of sullying or impairing the distinctive quality of a trademark of a senior user. This, in common parlance is known as dilution by tarnishment. The object of such an invasion is so tarnish, degrade or dilute the distinctive quality of a mark.

For instance, if an attempt is made to communicate a message that the product of a senior user is injurious to health or if it is inferior in quality, and some epithet is used in the advertisement then it would be the dilution by tarnishment.

For example: In order to convey a message that coca cola is bad for health, the advertisement campaign says “Drink cocaine” in the same font and the stylized script as used by the senior user.

The junior user is guilty of dilution. The dilution of mark act by the way of tarnishment is always regards to strong, famous and well-recognized marks, it should have the effect to weaken or diminish the strength and identification value of the mark.

No need to establish the likelihood of confusion as to source, affiliation and connection. Some potential purchasers may get confused as to source or affiliation while others may not.

Mere comparative advertising or fragile sensitivities of the senior user would not be termed as dilution or tarnishment.

The proprietor of the later trademark or junior use structures his affairs in such a manner so as to take advantage of another mark, it would be considered as unfair and the advantage deemed to be without cause both under the sections 11(2) and 29(4).

In effect this clause prohibits a trademark from taking advantage of another’s trademark. This taking advantage is liable to be restrained by refusing registration under section 11 and may also be restrained in infringement or passing off proceedings.

Blurring:

dilution

Blurring mean erosion or watering down of the distinctiveness, uniqueness, effectiveness and prestigious connotations of the trademark.

Blurring occurs when the power of the trademark is weakened through its identification with dissimilar goods such as Mercedes undergarments, Kodak shoes, Honda utensils, Sony sandal soap and Wal-Mart food, Rado cycles, Xerox cigarettes” etc.

Certain symbols, languages or other mark which may cause consumers confusion as to who owns the product, that one will be considered as blurred.

It is to be noted that dilution by blurring happens upon unauthorized use of a famous mark for unrelated or dissimilar goods/services. In the above list, although neither example is likely to cause confusion among consumers, each dilutes the distinctive quality of the mark.

Tarnishment:

Tarnishment means “weakening of a mark through unsavory or unflattering association”. It occurs when the mark is cast in an unflattering light, typically through its associations with inferior or unseemly products or services.

Tarnishment by unwholesome context:

Coca cola vs. Cocaine is another example of dilution by tarnishment. It was an early case involving the slogan “Enjoy Coca-Cola”, owned by the Coca-Cola Company. A poster showing a bag of cocaine with the slogan “Enjoy cocaine” was marketed by an unauthorized seller.

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Anyone seeing the poster would have realized that the Coca-Cola Company was not associated with the poster; thus, there was no likelihood of confusion.

Under a theory of dilution of the Coca-Cola mark, the court stopped the sales and the distribution of the poster.

Proof of dilution necessary – Mere claim would not suffice:

Whatever the nature of dilution, whether by blurring or tarnishment, it is clear that proof of actual dilution, not just the likelihood of dilution is required. However, to some extent, this requirement of proof depends on whether the conflicting marks are identical or otherwise.

When a famous mark is used by another in identical form, no further evidence is ordinarily necessary to reach the conclusion that the famous mark has in fact been “diluted” to some extent, no matter how relatively minor the junior use is.

For example if hypothetically, the famous mark ROLEX for watches was used without license on sport shoes “ROLEX shoe”, it should be clear that the ROLEX mark has, to some extent, lost its unique link with a single source of watches and has now been fragmented and diluted to some degree.

If this unauthorized use is permitted, the assumption is that others are sure to follow and sooner or later the ROLEX mark will suffer a loss of its capacity to serve as a strong mark. This is the fundamental theory of the slippery slope and dilution by blurring.

However, in case of non-identical marks, plaintiff must prove dilution by blurring or tarnishment in order to succeed and a mere claim that the consumers associate or are likely to associate the junior users mark with the senior one would not suffice for actionable dilution.

In Moseley vs. Secret catalog Inc. there was no dispute that plaintiff’s VICTORIA SECRET mark for women’s lingerie and wearing apparel qualified as a famous mark under section 43(C) of the lanham act, victor and Cathy Mosley opened VICTOR’S SECRET, a retail store in 1998, selling men’s and women’s lingerie, adult videos. After being contacted by Victoria’s Secret, the Moseley changed the name of their store to VICTOR’S LITTLE SECRET and stood their ground.

Plaintiff filed a suit for trademark infringement and dilution. The district court finding no possibility of proving a likelihood of confusion dismissed trademark infringement claim on summary judgement, but granted the plaintiff “Victoria’s secret” on Anti-dilution act count, finding dilution by tarnishment.

The Moseley appealed and the appellate court affirmed, finding dilution by both blurring and tarnishment. The Supreme Court reversed, returning the case to the district court for a possible trial. The Supreme Court created two categories of dilution: Where the conflicting marks are identical and where the marks differ. The court said that:

The mere fact that the consumers who are mentally associate the junior’s mark with the earlier famous mark will not be a sufficient evidence to prove the actual dilution or to establish a actionable dilution.

The clear implication of this holding is that where the marks are identical, the mere fact that consumers mentally associate the junior user’s mark with a famous mark could be sufficient to establish dilution.

Finally the district court reiterated the view of the Supreme Court that blurring was not a necessary consequence of a mental association in the mind of the consumer between an accused mark and a famous mark.

What was needed was the proof of any lessening of the capacity of the VICTORIA’S SECRET mark to identify and distinguish goods or services sold in Victoria’s Secret or advertised in its catalogs.

Thus the court found that there was actual association between the marks, but no evidence of actual dilution of famous mark.

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