Friday, July 15, 2016

Further Comments of Professor McCarthy Regarding TTAB Dilution Analysis

Professor McCarthy responds below to the comments on this TTABlog post regarding his criticism of the TTAB's dilution analysis.

I don’t agree with the commenters who argue that the T.T.A.B. is correct in thinking that "association" automatically proves that it is likely (probable) that the famous mark will be harmed and lose strength. I disagree with the argument that the existence of ANY other similar mark on ANY goods or services creates actionable "dilution" – once there was one, now there are two. First, the plaintiff would have to prove it’s mark is unique – the one and only trademark use of this designation – on any goods or services. Second, this would create a true "right in gross," which everyone has always said is what dilution law does not do. (That's a monopoly on the word as a mark.) The statute says that plaintiff must prove that the "association" created by the accused mark "impairs the distinctiveness of the famous mark." The Supreme Court said in Victoria’s Secret that association does not prove impairment.

Plaintiff must articulate some scenario in which there a likelihood that the strength of the plaintiff’s mark will be lessened. For example, Judge Furman found no dilution by a parody of Louis Vuitton expensive handbags even though there was association: "Significantly, it is not enough to show—as Louis Vuitton indisputably can—that members of the public are likely to 'associate' the defendant’s mark with the plaintiff’s mark (or that the defendant promotes such association)….. [T]he operative question is whether the kind of association [defendant] creates here is likely to impair the distinctiveness of Louis Vuitton’s marks." Louis Vuitton Malletier, S.A. v. My Other Bag, Inc., 117 U.S.P.Q. 2d 1537, 1545, 2016 WL 70026, *7, (S.D.N.Y. 2016).

In the 2016 T.T.A.B. Omega case, OMEGA watch alleged that collegiate fraternity Alpha Phi Omega’s use of its name in Greek letters ( ΑΦΩ) on shirts would dilute the OMEGA mark in English or as the Greek letter Ω. The Trademark Board denied applicant's motion for summary dismissal of the opposition to its application for the three Greek letters. In my opinion, the Board should have found that there is no plausible situation under which the Greek lettered name of the fraternity on T-shirts would be likely to impair the distinctiveness of the OMEGA or Ω marks for watches. If so trivial a registered use can be held likely to damage the OMEGA mark for watches, then the watch company truly would have a monopoly on all commercial use of a letter from the Greek alphabet. To me, that would expand trademark law beyond all reasonable bounds. I think there could be "blurring" only if when people see the OMEGA watch mark, they will think of the Alpha Phi Omega name and that will impair the strength of the OMEGA mark. Omega v Alpha Phi Omega, 118 U.S.P.Q. 2d 1289, 1300 (T.T.A.B. 2016)

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Text Copyright 2016.


At 12:26 PM, Anonymous Anonymous said...

I'm unclear on when Mr. McCarthy thinks blurring occurs.

Does it occur only when the junior user achieves such public recognition that the public thinks of the junior user when encountering the famous mark? So there is no claim for blurring until the damage - the consumer recognition of the junior mark - is substantial?

Congress needs to step in and specify just what it blurring and, if it feels this way, that there is no right in gross. Good luck getting it to do that, of course.

At 9:56 AM, Anonymous Anonymous said...

I agree with Anonymous (12:26) that neither Professor McCarthy, nor any court so far, knows what dilution by blurring is if it isn't association. Association is what dilution, in it's Schecterian form -- which is what Congress adopted -- is. The problem is that no courts like it. They see it, in that form, for what it is: a giveaway to Big Brands with good K Street lobbyists. And they don't want to enforce it. So they keep looking for ways to dilute dilution. The problem is that, on the spectrum between association and likelihood of confusion, there's really no rational, articulable "wrong" that can be defined. And so we're let with court decisions that result in analytical blurring (pun intended) and commentators and practitioners who can't figure out what those courts are saying the darn statute means. Get rid of it! It's utterly useless!

At 11:17 AM, Blogger Unknown said...

Dilution by blurring can make sense if we begin to understand it as a problem of *product* confusion, as opposed to *source* confusion. TM takes care of source confusion, where the consumer knows exactly what the product is, but is confused as to who made the product. Blurring takes place when the consumer thinks she knows who she is buying from, and is surprised to find out the product she is buying comes from that intended source (when if fact it does not).

When the marks are similar and the products are similar, it is source confusion.
When the marks are similar and the products are dissimilar, it is product confusion (blurring). Now, the mark is being made to stand for products it does not make. That is when the mark's distinctiveness is lessened.

Assume Kodak is still in the business of making film. A second company enters the film market under the mark Kodack. A consumer looking to buy film is likely to end up buying from the wrong source because the products are similar and the marks are similar. This is source confusion and TM infringement. Kodak still stands for film, but loses a sale because of source confusion.
Now, assume the second company, Kodack, makes watches, not film. A consumer in the market for a watch finds the Kodack watch and decides to buy it. In doing so, she thinks "I had no idea Kodak made watches." She is product confused at this point since she believes Kodak makes watches as well as film. In her mind, the Kodak mark now represents more (film *and* watches) than what Kodak intends its mark to represent. This is when the Kodak marks becomes blurred.

I never did like dilution by blurring, and I never saw a dilution case that couldn't be better managed as a confusion case. But if blurring is going to remain a part of our unfair competition jurisprudence, maybe understanding blurring as product confusion gives us a better understanding of the role it can play.

At 11:53 AM, Anonymous Anonymous said...

Mr. Chicowski's hypo is, in fact, infringement. The customer believes that Kodak is the source of the product, when it isn't. So the hypo doesn't speak to what dilution by blurring is.

At 12:25 PM, Blogger Unknown said...

My point was to suggest that blurring might best be understood as a form of confusion, what I call product confusion. Yes, it, too, is infringement, but the manner in which the confusion of blurring takes place differs from the standard source confusion of TM.

At 12:56 PM, Anonymous Freiburger said...

Mr. Cichowski,

I believe your second hypothetical -- where the consumer buys the KODACK brand watch thinking, "I had no idea Kodak made watches" -- is garden-variety infringement. That is, the consumer is confused/mistaken about the source of the watch. You also wrote, "maybe understanding blurring as product confusion gives us a better understanding of the role it can play." But blurring isn't confusion; if blurring were just one type of a confused state of mind, there would be no need to discuss dilution law.

At 2:37 PM, Blogger Unknown said...

I am attempting to alter the understanding of blurring in a manner that gives the concept some utility. Thus the suggestion that it does involve a certain kind of confusion. Calling it "association" is problematic for all the stated reasons - no one knows what that means. But if we think of blurring as product confusion, do we not reach a point where we can better apply the principle?

Another way to get at my point: think association = product confusion.

There is a difference in my hypos that needs emphasis. In the first part, Kodak has lost a sale. There is harm to their mark and their market. That is the garden variety infringement. Someone is using a mark too similar to theirs in a market too close to theirs.

In the second part, Kodak has not lost a sale. The only damage is to their mark, since it now stands for items they do not manufacture. There is no market damage in the traditional sense of lost sales. But, now, the mark has been confused (associated) with watches - thus my terming it "product confusion." That makes the mark less distinctive, and there is the blurring. Actionable even without direct competition or market damage of lost sales.

In the second part of the hypo, someone is using a mark too similar to theirs in a situation where there is a huge market gap. That market gap makes proving a garden-variety infringement case more difficult. Who would confuse watches with film? Blurring (I think) was created to protect the mark in just such situations - where others conjure up that mark and attach it to completely non-related products. Such "product confusion," sans the traditional source confusion and sans traditional market harm, is the loss of distinctiveness that I believe dilution by blurring was meant to capture.

My theory leaves us with now two forms of confusion that are actionable - source confusion (garden variety TM infringement) and product confusion (blurring). I understand there are those that suggest dilution is impossible if confusion exists. The confusion they speak of is source confusion. That is not the form of confusion I offer here.

At 4:06 PM, Blogger John L. Welch said...

Let me throw a few thoughts out there. If a mark has to be a "household word" to be famous for dilution purposes (the TTAB has said this), then won't an association occur automatically whenever another party uses the word as a trademark?

Next question: how can the third-party use impair the distinctiveness of the famous mark? If it has a significant marketplace presence so that the famous mark no longer comes automatically to mind?

But how, then, can a mark that is the subject of an intent-to-use application be opposed on dilution grounds? Can it impair the distinctiveness of a famous mark if it's not even in use yet. Must one assume that when it is used, it will be used extensively and so it will impact the famous mark?

At 5:44 PM, Anonymous joe dreitler said...

Very interesting post and comments. Anonymous states what happened after the 1st dilution act - courts hated it and thought of it as a monopoly and avoided applying it at all costs until the Supreme Court saved them from wrestling with it in Victoria's Secret. (Full disclosure, i was an INTA Board member and did the lobby Congress in 1995 on Dilution 1.)
The trademark association rightly did not like the extra language the Supreme Court read into Victoria and so back they went to Congress. but, as John Welch points out, dilution was not meant to apply to 99 and 44/100% of the cases brought that relied upon it. Only famous need apply, but since using "Ivory" as the name of a restaurant down the street from P&G's headquarters is not likely to cause confusion, you have no remedy (at least not in 1988 when it didn't make it into TLRA).

John's comment is correct that if the term is a household word famous (and not used by 3rd parties), there will be an automatic association that results in blurring. If the man or woman on the street have to think that the new comer's product is associated with or sponsored by the senior use (the Kodack watch example) then you have infringement. If they do not, then you have dilution - if the senior mark is famous and strong and subject to being diluted.

At the end, there are 2 typical scenarios. The first is when a court knows that a 3rd party is adopting something that functions as a trademark to get a free ride off of a well known origin indicator and doesn't think that there is a likelihood of confusion that will stand up. It was meant to apply to such so that Pussycat Cinema not get a free ride and blur or tarnish a well known brand. then there is the overly aggressive trademark owner whose lawyers know infringement is a loser, but that the mark is advertised and marketed enough so that alleging it is being diluted passes the red face test for the client, but courts and 3rd parties reading the case know what is going on.

As to John's last question, if a 3rd party filed an ITU application to register Nike for motorcycles, or Buick for watches, why should the mark's owner have to wait to challenge it with a Cancellation, although I'm not sure the applicant would want to go ahead knowing that if their goal is truly to blur the original mark, discovery is going to show that. And any lawyer who clears a search of Nike or Buick or Kodak for anything is probably in the wrong business.

At 6:26 PM, Blogger John L. Welch said...

Ron Coleman comments here:

At 5:42 AM, Blogger Paul Keating said...

I am surprised no one has commented on the application of Spokeo, Inc. v. Robins, 136 S. Ct. 1540 (2016) which requires concrete injury even in the context of allegations concerning violation of a statutory right pr procedure.

At 12:52 PM, Anonymous Anonymous said...

With due respect to Prof McCarthy, the Board’s Omega case did not say, as he states in his original post, “that dilution of a mark can be shown merely by proving that the challenged mark causes people to think of the famous mark.” To the contrary, the case does in fact explicitly state on multiple occasions, what Prof. McCarthy criticizes it for not stating: that in addition to an association arising from a similarity in the marks, that association must be one “that impairs the distinctiveness of the famous mark.”

The case does omit the reference to impairing the distinctiveness of the famous mark when it states, as Prof. McCarthy notes, that “[d]ilution by blurring occurs when ‘a substantial percentage of consumers, on seeing the junior party's use of a mark on its goods, are immediately reminded of the famous mark and associate the junior party's use with the owner of the famous mark, even if they do not believe that the goods come from the famous mark's owner.’” However, that passage does not say that dilution by blurring occurs in every instance in which there is an association or that nothing else is needed. Read in context, it is clear that the passage refers only to association simply because the association prong is the prong being addressed at that point. Indeed, just before that passage, the case explicitly states in a more complete and literally definitive statement of dilution by blurring that dilution by blurring “is defined as an ‘association arising from the similarity between a mark … and a famous mark that impairs the distinctiveness of the famous mark.’ [emphasis added]” And then again, after the passage quoted by Prof. McCarthy, the case explicitly states that “we find that, as a matter of law, Applicant's Crest Mark will not impair any assumed distinctiveness of Opposer's assumedly famous OMEGA marks.” And yet again, to top it all off, the case cites to and quotes from the Chanel case for the precise statement Prof. McCarthy criticizes the Board for not making: “See Chanel, 110 USPQ2d at 2024 (citing Nike Inc. v. Maher, 100 USPQ2d 1018, 1023 (TTAB 2011) (dilution requires a conclusion “not only whether there is an ‘association’ arising from the similarity of the marks, but whether such association is likely to ‘impair’ the distinctiveness of the famous mark.”)).” With respect to the crest mark, the Board found that there would be no association and therefore no impairment (thus, recognizing the second prong again). With respect to the letter mark, the Board found there to be questions of fact re whether or not there would be an association and so did not get to the impairment prong.

Prof. McCarthy now notes that denied applicant's motion for "summary dismissal of the opposition" to letter mark because,"[I]n [his] opinion, the Board should have found that there is no plausible situation under which the Greek lettered name of the fraternity on T-shirts would be likely to impair the distinctiveness of the OMEGA or Ω marks for watches." It is important to bear in mind, as Prof. McCarthy notes, that this was a motion for summary judgment. The Board may well come to the conclusion he wants. For now, however, the Board simply found that this was a disputed question of fact; not a question of law.


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