USA / TRADE MARKS / DILUTION

Entertainment Law Review, Loyola Law School, Vol 20 No 2, 2000

The Monopoly Advantage of Dilution

Brian Lerner

Since "dilution" is not a universally recognised concept in trade mark law, this article provides a useful discussion of the subject in the context of United States law, the US Federal Trademark Dilution Act of 1995 and the subsequent case law, particularly Nabisco Inc v PF Brands Inc (the goldfish case). The author recalls that "the goal underlying protection from dilution was initially based on a desire to protect trademark owners from those who attempted to use commercially an established mark on a completely unrelated product". It is clear that there was a subsequent shift in the meaning of dilution, since the courts tended to regard it as the use of a mark by someone other than the owner such that the use progressively erodes the mark’s distinctiveness, strength and value. Although this is a fair definition, it raised problems of application, for example, whether evidence was required of confusion among consumers; whether a mark was "famous"; whether an action could be brought only against non-competitors in a dilution action; and, more generally, whether there was a risk of giving the trade mark owner something akin to a monopoly right. Some of these problems were raised in the Nabisco case, in which the main issue was whether Nabisco’s goldfish cracker would dilute Pepperidge Farm’s goldfish cracker. The District Court and the US Court of Appeals for the Second Circuit found for Pepperidge Farm; as the District Court put it, the case illustrated precisely what the dilution law was intended to prevent. The author disagrees. He says that the case was decided on the basis of factors which historically have been reserved for determining consumer confusion in traditional trademark infringement cases. But what chiefly bothers the author is that trademark law has been adapted to protect a shape which, in the United States, in normally protected by other means: "anti-dilution was not intended to give a perpetual monopoly over common words and generically shaped products". [20030]