|
For a PDF Version Click HERE.
|
|||
|
April 20, 2004 The Honorable Lamar S. Smith Dear Mr. Chairman, I am writing to you on behalf of the American Intellectual Property Law Association (AIPLA) to communicate our views on proposals to amend the Federal Trademark Dilution Act (“FTDA”). In principle, we support the thrust of these legislative efforts. AIPLA is a national bar association whose more than 15,000 members are primarily lawyers in private and corporate practice, in government service, and in the academic community. The AIPLA represents a wide and diverse spectrum of individuals, companies and institutions involved directly or indirectly in the practice of patent, trademark, copyright, and unfair competition law, as well as other fields of law affecting intellectual property. Our members represent both owners and users of intellectual property. AIPLA has long believed that an effective federal trademark dilution remedy is essential for trademark owners to protect their famous marks used in commerce, which also benefits the consuming public. Therefore, we support the underlying thrust of the Committee Print which will clarify and strengthen the FTDA. INHERENT OR ACQUIRED DISTICTIVENESS Section 2 of the Committee Print would amend 15 U.S.C. 1125(c)(1) of the Trademark Act of 1946 to provide protection against a likelihood of dilution for marks that have inherent or acquired distinctiveness. AIPLA supports this amendment. The FTDA currently indicates that the inherent distinctiveness and acquired distinctiveness of a famous mark are factors that may be considered in determining whether a mark is distinctive and famous. See 15 U.S.C. 1125(c)(1)(A). The Second Circuit has interpreted this portion of the statute to exclude protection for famous marks lacking inherent distinctiveness. New York Stock Exchange v. New York, New York Hotel, 293 F.3d 550, 556-57 (2d Cir. 2002) (following TCPIP Holding Company v. Haar Communications, 244 F.3d 88, 98 (2d Cir. 2001)). We believe that famous marks should be protected by the FTDA regardless of the nature of their distinctiveness. It is well settled in trademark law that the distinctiveness of a mark may be demonstrated by either a showing of inherent or acquired distinctiveness. Accordingly, we believe that the FTDA should apply to distinctive marks whether based on inherency or through acquisition. DILUTION PROTECTION FOR ALL TYPES OF MARKS Proposed § 1125(c) would protect all types of marks, regardless of form. AIPLA also favors providing dilution protection for any mark, whether or not it is registered, that satisfies the agreed upon statutory standards, including trade dress and product configuration marks. In areas outside of the dilution context, protection is provided for non-traditional marks that satisfy the statutory requirements. We believe that FTDA protection should be extended to all marks meeting statutory standards, including trade dress and product configuration, and any other appropriately protectable non-traditional marks. We would, however, suggest the Subcommittee consider the deletion in § 1125(c)(1) of the phrase “as a designation of source of the person’s goods or services” as it would tend to limit the application of that statute. LIKELIHOOD OF DILUTION Section 2 of the Committee Print would also amend the FTDA to permit dilution actions based on a “likely to cause dilution” standard. As we have previously testified before the Subcommittee, we support amending the Lanham Act to provide for a “likelihood of dilution” standard. (See AIPLA Testimony, Oversight Hearing on the Federal Trademark Dilution Act, February 14, 2002) The Committee previously considered such legislation, which was tabled after the Supreme Court agreed to review the Sixth Circuit ruling in V Secret Catalogue Inc. v. Moseley. AIPLA proposed that § 1125(c) of the Trademark Act be amended to provide for an express “likelihood of dilution” standard. In view of the Supreme Court’s ruling in Moseley that the owner of a famous mark must prove actual dilution, we believe it is appropriate for the Subcommittee to revisit the matter. AIPLA believes that the “likely to cause dilution” test is appropriate because it most closely comports with the goals of the FTDA and is consistent with the Act’s legislative history. The relevant legislative history indicates that a requirement of proof of likelihood of dilution advances the fundamental purpose of the federal dilution statute in protecting famous marks. As the Report of the Committee on the Judiciary notes, dilution is “an injury that differs materially from that arising out of the orthodox confusion. Even in the absence of confusion, the potency of a mark may be debilitated by another’s use. This is the essence of dilution. Confusion leads to immediate injury, while dilution is an infection, which if allowed to spread, will inevitably destroy the advertising value of the mark.” H.R. Rep. No. 104-374 (1995), reprinted in 1996 U.S.C.C.A.N. 1029, 1032. Under the actual dilution standard imposed by the Supreme Court in Moseley, a famous mark owner must wait until after harm is incurred before seeking judicial remedy. This requirement of actual harm unduly prejudices the mark owner. Once a famous mark has actually been diluted, the harm is irreparable; the “whittling away” of the mark’s distinctiveness has taken place and cannot be restored. Moreover, as the Seventh Circuit observed in Eli Lilly & Co. v. Natural Answers, Inc., 233 F.3d 456 (7th Cir. 2000), under the actual dilution standard, by the time the senior mark holder is permitted to file suit, junior mark holders might have the defense that the senior mark had lost its distinctiveness due to the numerous other marks that have copied it. In addition, the actual harm standard also prejudices junior users to the extent they are unable to seek declaratory relief prior to investing in new products and services. To quote the Seventh Circuit in Eli Lilly, “Congress could not have intended these unjust and inefficient results.” Finally, the burden of proving actual harm is unreasonable. Suggestions that actual harm may be shown through consumer surveys or through loss of profits have been sharply criticized as untenable and difficult to prove. With respect to lost profits, if the famous senior mark were being exploited with continually growing success, the senior user might never be able to show diminished revenues, no matter how obvious it was that the junior use diluted the distinctiveness of the senior. DEFINITION OF ‘FAMOUS MARKS’ Proposed § 1125(c)(2)(A) would provide that a mark is “famous” if it is widely recognized by the general consuming public as a designation of source of the goods or services of the mark’s owner. It also would provide that a court may consider all relevant factors in determining whether the mark possesses the requisite degree of recognition, including, without limitation, three specific factors. While we would like to further study the factors proposed by the Committee in this section, we believe this amendment moves in the appropriate direction to define “famous” marks which are eligible for protection against dilution. We note that this definition is not without controversy, however, because of the impact it would have on the issue of "niche" fame which has been much debated since the passage of the FTDA. There are some courts, such as the Ninth Circuit, that have embraced the concept of niche fame, i.e., marks that are not widely recognized by the general consuming public as a designation of source of the goods or services of the mark's owner. The proposed definition would overrule those decisions. Marks that have only "niche" fame should be not protected by the FTDA and Congress did not intend to protect them under §1125(c). AIPLA believes that the proposed change is both necessary and important. DILUTION BY BLURRING AND TARNISHMENT AIPLA supports amending the Trademark Act to provide a specific definition and cause of action for dilution by blurring. Currently, the Federal Trademark Dilution Act (“FTDA”) does not include any specific provision defining the cause of action for dilution by blurring. In light of the “actual dilution” standard imposed by the Supreme Court in Moseley v. V Secret Catalogue, Inc., 123 S. Ct. 1115 (2003), we believe that such a definition and cause of action are needed, however, we are not able to endorse the specific definition or factors contained in the Committee Print in § 1125(c)(2)(B). We are reviewing the definition and list of factors and will communicate our recommendations to the Subcommittee. AIPLA also supports amending the Trademark Act to provide a specific definition and cause of action for dilution by tarnishment. Currently, the FTDA does not include any specific provision defining the cause of action for dilution by tarnishment. In light of the ambiguity in tarnishment claims caused by certain dicta in the Court’s opinion in Moseley v. V Secret Catalogue, Inc., 123 S. Ct. 1115 (2003), we support an amendment containing such a definition and cause of action, although again we are continuing our review of proposed § 1125 (c)(2)(C). DEFENSES AND REMEDIES TO INCLUDE BLURRING AND TARNISHMENT AIPLA supports proposed § 1125(c)(3) which would extend the existing defenses for dilution to blurring and tarnishment causes of action. Currently, the FTDA provides that the following actions “shall not be actionable” under this statute: (i) fair use; (ii) non-commercial use; and (iii) all forms of news reporting and commentary. These defenses should be extended to the specifically defined causes of action for blurring and tarnishment. We also support extending the remedies for dilution to the blurring and tarnishment causes of action as proposed in § 1125(c)(4). Currently, the FTDA provides for injunctive relief as the normal remedy for the dilution of famous marks, “subject to the principles of equity and upon such terms as the Court deems reasonable.” See 15 U.S.C. 1125(c)(1). To the extent willfulness can be shown, the owner of a famous mark is also entitled to relief under §§1117(a) and 1118 of 15 U.S.C., “subject to the discretion of the court and the principles of equity.” AIPLA supports extending these remedies to the specifically defined causes of action for blurring and tarnishment. We appreciate the opportunity to offer these comments and request that they be made a part of the record of the hearing scheduled for April 22, 2004. We hope that our views will aid the Subcommittee in its consideration of the federal trademark dilution statute and stand ready to give assistance to the Committee in any manner which may be beneficial.
|