The toughest decision that we face in our day to day life is deciding which place to dine-in or purchase goods or services from. We tend to base our decisions by comparing different kinds of brands available in the market that tend to offer similar kinds of services. Thus, in a competitive world such as this it is obvious that one desires to stand out from others and be identified for something that makes them unique; it’s something that everyone strives in day to day life, starting from being distinct as a person to being marked uniquely in any business. Hence, the concept of trademark has gradually evolved to make its way into the legislations covering the intellectual property rights (intellectual property rights also known as IP, can be defined as a property that includes the intangible creation of the human beings), all across the globe.
In layman’s terms, the word trademark can be defined as any recognizable sign, design, word, name or anything which can be used to identify any product or service of a particular origin from those of others. Did you know that the blacksmiths of the Roman Empire who made swords are observed to be the first users of the trademarks (as reported in Trademark Treaties)? Tracing back to the time, the oldest and long used notable trademarks include Stella Artois, which claims to use the mark since 1366 and Löwenbräu, which claims the use of its lion mark since 1383. Over the span of years, the concept of trademark has expanded all across the globe to a great extent, calling for a strong legislation in protecting the registered trademarks from being stolen or used in a deceptive manner, causing loss or damage to the original trademark owner.
This article will shed knowledge on the concept of ‘Trademark Dilution’ with reference to three countries (United States, United Kingdom and India). Did you know that the concept of dilution is known to have originated in Germany in a case regarding the mark ‘Odel’ for mouthwashes, prohibiting the use of identical marks for the steel products by other companies? The court recognizing the concept of dilution held that, ‘the plaintiff’s ability to compete with other manufacturers of mouthwashes will be damaged if the significance of the mark is lessened and also the court acknowledged the fact that it is immoral to trade upon the reputation of a famous mark on the supposition that the consumer who sees or hears the mark is prone to immediately associate the goods with the products for which the mark has become famous. But on the contrary some people believe that the doctrine of dilution has first been recognized in the case Eastman Co. v. Kodak Cycle Co., 15 Reports Patent Cases 105 (1898), Eastman company are the manufacturers of Kodak cameras. They filed a suit against Kodak cycle company for using the kodak mark on their bicycles. The verdict was held in favor of the plaintiff for the reasons that using the same mark as the plaintiffs can cause confusion among the consumers. Thus, the concern to protect the uniqueness of the mark has been there for a long time. The doctrine of dilution is a trademark law concept that allows the owner of a famous trademark to restrict others from using that mark in a manner that would affect or lessen its uniqueness. What makes the concept of dilution different from any other trademark infringement is that it gives the right to the owner of a famous trademark to forbid others from using his trademark even in the absence of any kind of competition (non-competitive markets) or dissimilar goods. For instance, a famous trademark used by one company to refer to electronic-related products might be diluted if another company uses a similar mark for cosmetic products. Trademark dilution can be defined as the destruction of a trademark’s strength or distinctiveness, caused by the use of the mark on an unrelated product. Dilution usually happens either in the form of blurring the trademark’s distinctive character or tarnishing it with an unsavory association.
Trademark Dilution in the United States In the United States, the first attempt to establish a federal trademark regime in 1870, was initiated by Congress while exercising their copyright clause powers. However, it couldn’t sustain more than a decade and the Supreme Court had to strike down this act. Again, the Congress has passed a legislation on trademark in 1881 in pursuant of their commerce clause powers and this act was revised again in 1905. But with the time, the Congress recognized there was a growing need for a more comprehensive law on trademarks, paving way for the enactment of the Lanham (Trademark) Act of 1946, which was thoroughly revised and updated to act as the primary federal law on trademarks (the Lanham Act). Until 1996, the disputes concerning the trademark dilution in the United States of America (USA) was governed by the Lanham Act of 1946. Section 43 of Lanham Act lays down a civil liability on any person found using any known distinctive mark in a manner to falsely represent it leading to confusion and deception, or represents in a manner misleading the facts on any goods or services. However, the Lanham Act failed to meet the aspects of the trademark dilution disputes efficiently and with the growing globalization the threat of resting on the fame of the well-known and popular trademark owners increased. Thus, calling for more specific legislation on trademark dilution.
Due to absence of specific law which dealt with dilution, many states in the United States adopted their own statutes on dilution and the first state to pass an anti-dilution act was the state of Massachusetts, followed by over two-thirds of state legislatures adopting some form of anti-dilution statutes. In order to bring uniformity and an order, the need for enactment of Federal Law escalated. Ergo, on January 16, 1996, President Clinton, passed the Federal Trademark Dilution Act of 1995, amplifying the protection given to the famous trademarks from being diluted by introducing section 43(c) into the Act.
Pursuant to the case of Moseley v. V Secret Catalog, Inc., 537 U.S. 418 (2003), where the Supreme Court determined that in order to succeed in the case of trademark dilution, the owner of a famous mark must establish the occurrence of actual dilution, and not the likelihood of dilution. In other words, the occurrence of dilution can only be proven by evidence of actual damage or harm caused to the famous mark in the form of economic injury or if the consumers started to perceive the famous mark less favorably. Nevertheless, the Supreme Court did not provide much guidance on the type and amount of proof required to succeed in the case of dilution of the famous mark. Interestingly, relevance of tarnishment was not disputed, but the Supreme Court questioned whether it was prohibited by the language of the statute. It said that evidence of actual dilution must be shown, not mere mental association between the mark and the famous mark because blurring doesn’t happen only by means of mental association. The Supreme court while sharing its opinion in this following case commented saying that direct evidence of dilution must be proven by circumstantial evidence, especially in the obvious case where the infringed mark and famous mark are identical. It would be required by the Congress to clarify if dilution by tarnishment is prohibited by the law, if that is the intention, then the standard from one requiring to establish actual dilution and proving of actual economic harm to a mere showing of likelihood of dilution without no economic injury is required to be altered by the Congress.
Even though the owners of famous trademarks were able to get favorable results when seeking to prevent dilution of an identical mark as established in Savin Corp. v. The Savin Group, 391 F.3d 439 (2d Cir. 2004), the U.S. District Court of Appeals passed a decree saying that when the marks are identical, not merely similar, no further proof is needed. However, the main concern is what amounts to proof to establish a successful dilution case is uncertain and also it did not lay down provisions differentiating between actual dilution and the likelihood of dilution. Hence, it called for more detailed law on dilution, accordingly in 2006, the Trademark Dilution Revision Act (TDRA) was passed to meet the inconsistencies in the Trademark Dilution Act of 1995. Thus, eliminating the burden of establishing actual dilution.
The Trademark Dilution Revision Act, 2006, was a sigh of relief to many owners of the famous trademark as it was successful in overcoming the legal barriers, as according to the revised act the dilution of a trademark can be provoked by establishing a likelihood of dilution (harm). Thus, enabling the owner of the famous trademark to protect the mark from being diluted at the very first instance of it likely to be diluted. The Trademark Dilution Revision Act (TDRA) explicitly states that ― Subject to the principles of equity, the owner of a famous mark that is distinctive, inherently or through acquired distinctiveness, shall be entitled to an injunction against another person who, at any time after the owner‘s mark has become famous, commences use of a mark or trade name in commerce that is likely to cause dilution by blurring or dilution by tarnishment of the famous mark, regardless of the presence or absence of actual or likely confusion, of competition, or of actual economic injury. Hence, now it would be easy for a plaintiff to prove dilution, but the act sets out the factors to determine what marks could said to be famous:
The act further states that the dilution of the trademark can be caused in two ways:
Dilution by blurring is caused when an association could be made between a mark or trade name and a famous mark, because of the similarity, in turn leading to the impairment of the distinctiveness of the famous mark. Hence, for proving blurring, the following must be established:
Dilution by tarnishment can be caused when the association between the mark or trade name and famous mark, because of its similarity, tends to harm or weaken the reputation of the trademark. The kind of association must be of negative or unsavory, causing damage to the reputation of the famous mark. Tranishment generally takes place when the mark is used by a different trader in unrelated goods and that are of inferior quality than those of the famous mark’s holder. Hence, following factors must be considered while establishing dilution by tarnishment:
In the landmark case of Starbucks Corp. v. Wolfe’s Borough Coffee, Inc..The US Court of Appeals for the second circuit has consented to the judgment of the District Court while determining the degree of substantial similarity between the famous mark and the infringing mark. In this following case, Starbucks, the plaintiff, claims an injunction as per the Federal Trademark Dilution Act of 1995, prohibiting Wolfe’s Borough Coffee, the defendant from using Black Bear’s “Mister Charbucks,” and “Charbucks Blend” marks (the “Charbucks Marks”). The court held that there was no error by the district in finding the minimal similarity between the marks. The survey conducted by the district court to determine the similarity showed that the association between these two marks was relatively small. Therefore, the defendants are not diluting the famous trademark by blurring.
The law expressly excludes certain acts from the ambit of dilution on the basis of fair use and in order to protect free speech. It exempts nominative or descriptive uses of another’s mark for the purposes of:
Trademark Dilution in the United Kingdom In the United Kingdom (UK), the development of the law on dilution was very slow. There were not many judicial decisions acknowledging the doctrine of dilution before the passing of the Trademark Act of 1994 (TMA). Some of the cases were decided under the passing off remedy. Passing off remedy can be explained as when anyone deliberately or unintentionally passes off their goods or service as those belonging to another party. This action of misinterpretation often damages the goodwill of a person or business, leading to financial or reputational damage. It applies to protect unregistered trademarks.
On the other hand, the member countries of the European Union agreed on some fundamental rules dealing with IP including the trademark regulation, in order to bring a unified code on intellectual property rights. Accordingly, The Trademark Harmonization Directive was issued which provides a system for the protection of the Trademarks. The Directives are generally binding as to the ‘result to be achieved’ but the form in which those results will be achieved can be made by the individual nations.
Article 5(2) of the Directive states: Any Member State may also provide that the proprietor shall be entitled to prevent all third parties not having his consent from using in the course of trade any sign which is identical with, or similar to, the trade mark in relation to goods or services which are not similar to those for which the trade mark is registered, where the latter has a reputation in the Member State and where use of that sign without due cause takes unfair advantage of, or is detrimental to, the distinctive character or the repute of the trade mark. Thus, upon reading Article 5(2), it can be inferred that this Article doesn’t have a binding force on the member countries.
The United Kingdom came up with a prompt response by enacting the Trade Mark Act of 1994 in order to implement the Trademark Harmonization Directive. The concept of dilution was dealt by the Trade Mark Act (TMA), 1994, in line with the European Directive on Trademark as provided in Article 5(2), under section 5(2) and section 10(3) of the TMA 1994. In the year 2004, the sections 5(2) and 10(3) were amended by the Trade-Mark Regulations 2004 to expand the scope of protection to identical, similar and non-similar goods and services. Thus, there was gradual increase in the development of the law on dilution as relevant sections protecting the uniqueness of the mark were also introduced. Section 10(1) and 10(2) dealing with the infringement of the trademark on the basis if the mark is likely to cause confusion. Whereas, Section 10(3) of the Trade Mark Act, 1994, deals strongly with protection of trademarks from being diluted. The act is silent as to whether a likelihood of confusion is necessary to infringe under section 10(3). Section 10(3) of the Act, specifically protects the registered trademarks and prohibits use of the mark:
Interpretation on the standard of Protection of trademark dilution under section 10(3): There is no such express ruling by European Court of Justice (ECJ), as to whether the plaintiffs must show actual, as opposed to likely, harm or unfair advantage in the case of trademark dilution. However, this issue has been thoroughly analyzed by Advocate General Jacobs in the landmark case of General Motors Corp. v. Yplon, S.A., E.C.R. 1-5421.
In the analysis, Advocate General Jacobs states that, ‘Article 5(2), in contrast to Article 5(1) (b), does not refer to a mere risk or likelihood of its conditions being met. The wording is more positive: ‘takes unfair advantage of, or is detrimental to (emphasis added), The National Court must be satisfied with evidence of actual detriment, or of unfair advantage. It is ad-rem to bear in mind that the analysis made by Advocate General Jacobs, was neither accepted, nor rejected by the ECJ explicitly, as a matter of fact, by mentioning of detriment and unfair advantage without mentioning likelihood (as stated by the ECJ in the General Motors Case – If . . . the National Court decides that the condition as to the existence of a reputation is fulfilled, . . . it must then go on to examine the second condition laid down in Article 5(2) of the Directive, which is that the earlier trade mark must be detrimentally affected without due cause), it appears to be that ECJ tacitly accepted that actual unfair advantage or detriment is required for infringement under Article 5(2) of the Directive.
Even though the ECJ did not state anything expressly as to what must be established in order for the case of dilution to prevail, it could be inferred that the ECJ implied its view in proving the actual detriment as the standard of protection in the General Motors Case. Having said that, however, there is no express authority by ECJ as to how to establish the case of actual detriment. As the actual detriment or likelihood is not clearly stated in the section, hence, leaving the interpretation of the section keeping in mind the intent of the legislature, to the discretion of the court. It looks like the analysis of Advocate General Jacobs in the General Motors Case has influenced a lot of the UK courts. Advocate General, Jacob has also shed some insight on defining the term ‘reputation which happens to be one of the criteria to qualify as a case of trademark dilution.
The facts of the case of General Motors Corp. v. Yplon were like this- The General Motors, the plaintiff, is the proprietor of the trademark ‘Chevy’, holding registration in the Benelux trademark office on the motor vehicles (the word “Benelux” is formed from the first two letters of each country’s name such as Belgium, Netherlands and Luxembourg). Yplon, the defendant, happens to have a registered mark ‘Chevy’ in the Benelux Trademark office, on detergents, deodorants and various cleaning products. The plaintiff, General Motors, sought an order, before the Belgian court, in line with Article 13 (A)(2) of the Uniform Benelux Trade Marks, forbidding any use of the trade mark ‘Chevy’. As per the facts, Yplon had used its trade mark since 1988, but it was not until 12 October 1995 that Yplon received a formal notice from General Motors’ legal adviser demanding the voluntary cancellation of its Benelux and international registrations and a formal undertaking to discard all use of the sign ‘Chevy’, on the reasons that use of this sign ‘Chevy’ could cause dilution of its trade mark and thus damages its advertising function. Consequently, Yplon comes up with their argument stating that General Motors’ trademark ‘Chevy’ does not have a reputation within the Benelux countries and thereby, cannot be entitled to the protection as per the provisions of the Benelux Trade Marks law. And also, the defendant claims that as the products are not similar, use of the sign ‘Chevy’ cannot be detrimental to the distinctive character of General Motors In this following case, the question of reputation was one of main contentions, accordingly the court has aptly defined the term ‘reputation’ and held that in order to satisfy the court of Law, to have a reputation a trade mark must be able to satisfy knowledge threshold.
The degree of knowledge of that mark needs to be considered to determine the reputation of the mark. Which means the significant part of the public must be well aware of the mark in use in the market or the public should be able to associate with the mark instantly. Further the court has determined the basis on which the word public can be interpreted according to the facts of the case as depending upon the product or service marketed, either the public at large or more specialized public, for example traders in a specific sector. Also, while deciding on what constitutes as a reputed trademark, the court has to consider the following relevant facts such as:
From the Judgement: “The answer to be given to the question referred must therefore be that Article 5(2) of the Directive is to be interpreted as meaning that, in order to enjoy protection extending to non-similar products or services, a registered trade mark must be known by a significant part of the public concerned by the products or services which it covers.
In the Benelux territory, it is sufficient for the registered trademark to be known by a significant part of the public concerned in a substantial part of that territory, which may consist of a part of one of the countries composing that territory.” For a trade mark to have a ‘reputation’ within the meaning of Article 5(2) of Directive 89/104/EEC of 21 December 1988, it must be established that the mark is known to a significant part of the relevant sectors of the public; it is sufficient that such reputation extends to a substantial part of the Benelux territory, which may be part only of one of the Benelux countries.
In the case of DaimlerChrysler AG v. Alavi (MERC), R.P.C.: Justice Pumfrey while considering the issue of actual confusion as an infringement under section 10(3) in this case, stated that it is advisable to stick to the section and also bear in mind what Advocate General, Jacobs opinion in the General Motors case and expressed that its actual effects, not risks or likelihood that the case should be decided on. However, there was one case decided by the UK Court in 1997 where ‘likelihood of confusion’ was recognized as the standard of protection under section 10(3) of Trade Marks Act, 1994.
The facts of the case are as follows: Baywatch Prod. Co. Ltd. V. Home Video Channel: Baywatch, the plaintiff, marks the popular U.S. television series, in which it features male and female lifeguards usually wearing red bathing suits, filed a suit seeking a preliminary injunction under sections 10(2) and 10(3) of the Trade Marks Act as well as a passing off claim, against the Adult Channel, which broadcast episodes of pornographic film series with the title “Babewatch.” Similar to Baywatch, Babewatch also featured lifeguards wearing red bathing suits but instead of saving the drowning victims, these lifeguards are engaged in sexual acts. While 10(2) requires a showing of a “likelihood of confusion,” section 10(3) does not have any such requirements. The Chancery Division, while determining the Baywatch’s claim under section 10(3), held that it would be unreasonable to grant greater protection to famous marks with regards to non-similar goods or services. The Judge asserted that since the television show and the pornographic video are not similar, therefore, they will not create confusion of source. Thus, it was held that the plaintiff has no claim under section 10(3). Therefore, it could be inferred from the case studies, that ‘likelihood of confusion’ is not a criterion under section 10(3) to constitute a case of trademark dilution.
The act doesn’t expressly state the types of dilution. However, on a detailed examination of the section, two kinds of dilution could easily be inferred. If we look at the definition of blurring and tarnishment under the TradeMark Revision Act, 2006 of the US, we can make out that dilution by blurring and tarnishment has been incorporated into the Trade Mark Act, 1994 of the UK. On careful observation of the last part of section 10(3), it can be identified that act speaks about dilution on two ways;
TRADEMARK DILUTION IN INDIA The provisions on dilution were introduced for the first time into the Indian Law with the passing of the Trade Marks Act of 1999, which came into force in 2003. Even though the statutory provisions in India came into effect in 2003, it doesn’t conclude that there was no protection granted to the well-known mark against any kind of misappropriation in respect of dissimilar goods as the cases of dilution were dealt under the remedy of passing off by the Indian Courts. Long back, even before The Agreement on Trade-Related Aspects of Intellectual Property Rights(TRIPS) became effective in January 1996, most cases were handled under the head of torts as a claim of ‘passing off’ In year 1969, the High Court of Bombay in Sunder Parmanand Lalwani and others v Caltex (india) Ltd, declared that, use of ‘Caltex’ for watches would mislead and cause confusion among the consumers since this mark was associated by consumers and public at large with the famous petrol and various oil products.
Similarly, in the case of Daimler Benz Aktiegesellschaft v. Hybo Hindustan, Delhi High Court dealt on a matter concerning dilution. Though the court did not expound on the concept of dilution but it allowed injunctive relief to the plaintiff. It was held that ‘Benz’ is an internationally reputed mark signifying the finest engineered cars in the world and holds a symbol of status and quality. Therefore, the use of the mark ‘Benz’ on underwear, would clearly dilute the reliability of the mark. Hence, the court granted the globally famous German automaker an injunction against the use of the mark ‘Benz’ along with a ‘three-pointed human being in a ring’ by the defendants on the undergarments. Therefore, it can be observed how even Indian Courts even in the absence of statutory compulsion protected the well-known marks effectively.
The concept of dilution in the Trade Marks Act, 1999 has been dealt under sections 29 (4) along with other relevant sections in correspondence to section 29(4). Though the act doesn’t as such deal with the term ‘dilution’ but sets a standard by which a plaintiff can establish dilution of his trademark, in relation to dissimilar goods or products. Trademark Dilution is a concept in trademark law, which gives the owner of the famous trademark holder the power to forbid others from using the mark in a way that would lessen its uniqueness. As per section 29(4) of the Trade Mark Act, 1999 to constitute the case of dilution:
The following results must be established in order to establish infringement by dilution:
In The famous case of ITC v Philip Morris Products SA & Ors, the court provides a detailed understanding of the trademark dilution and its cause of action in India. The High Court while referring to section 29(4) of the Trade Marks Act, 1999 held that a cause of dilution can arise if the following essentials are established:
However, there are some exception when doing of such things wouldn’t amount to dilution, such as:
In today’s world, the rights of the famous trademark holders are prone to be infringed by people in order to reign in the global market on the fame of such famous marks. Therefore, enacting the legislation strictly prohibiting such action of infringements was necessary. Accordingly, many major countries have evolved to come up with strong legislations governing all such matters. In this article, we were able to get an overview of Laws on trademark dilution with reference to three countries. Although the criteria of protection may differ, there is one common thing among these three countries, that their aim is to safeguard the rights to the reputed or famous trademarks.