HR683APR22

TheWeekInCongress.com

Week Ending April 22, 2005

HR 683 to amend the Trademark Act of 1946 with respect to the dilution by blurring or tarnishment.

BRIEF

A trademark (Golden Arches) and a service mark (FedEx) are the same in this bill and both would be protected from “dilution”.

Dilution, or lessening the ability of a ‘mark’ to accurately “identify and distinguish goods or services, occurs when the ‘mark’ is tarnished by a similar, competitors or non-competitors, mark that blurs and lessens the ‘mark’s’ capacity to identify and distinguish those goods or services. The other ‘mark’ may or may not have the likelihood of confusion, mistake or deception. Equally as diluting is the unauthorized use of the original mark that reduces the public’s perception that the ‘mark’ signifies something unique, singular or particular.

The bill strengthens the law in favor of trade and service mark owners who believe their mark(s) were diluted.

Sponsor: Representative Lamar Smith (TX-21^st)

Vote: Passed House by voice vote (April 18, 2005)

Cost to the taxpayers: No discernible cost.

MORE INFORMATION

The FTDA specifies the following factors that a court may consider, but is not limited to, in determining whether a mark is distinctive and famous:

Ìthe degree of inherent or acquired distinctiveness of the mark;

Ìthe duration and extent of use of the mark in connection with the goods or services with which the mark is used;

Ìthe duration and extent of advertising and publicity of the mark;

Ìthe geographical extent of the trading area in which the mark is used;

Ìthe channels of trade for the goods or services with which the mark is used;

Ìthe degree of recognition of the mark in the trading areas and channels of trade used by the marks' owner and the person against whom the injunction is sought; and

Ìthe nature and extent of use of the same or similar marks by third parties.

Prepared Statement of the Honorable Howard L. Berman, a Representative in Congress from the State of California, and Ranking Member, Subcommittee on Courts, the Internet, and Intellectual Property

Mr. Chairman, thank you for scheduling this mark-up of H.R. 683, The Trademark Dilution Revision Act of 2005. Nine years after passage of the Federal Trademark Dilution Act [FTDA], I believe we have with this bill come full circle in ensuring the dilution act reflects the original intention of Congress.

Trademark law does not involve typical intellectual property rights. It does not emanate from the Patent and Copyright Clause of the Constitution, but rather from the Commerce Clause. Rather than protection of property rights, the primary policy rationale for traditional trademark law rests on a policy of protecting consumers from mistake and deception.

Protection against trademark dilution seems, in some ways, more akin to property protection than consumer protection. Thus, any anti-dilution legislation should be carefully and narrowly crafted. The goal must be to protect only the most famous trademarks from subsequent uses that blur the distinctiveness of the mark or tarnish or disparage it. Legislation should refrain from expanding the potential of creating rights in perpetuity for trademarks. Dilution should once again be used sparingly as an `extraordinary' remedy, one that requires a significant showing of fame.

This bill narrows the application of dilution by tightening the definition of what is necessary to be considered a famous mark. The bill eliminates fame for a niche market and lists factors necessary for a dilution by blurring claim. With these changes, it is our hope that the dilution remedy will be used in the rare circumstance and not as the alternative pleading.

In addition, this bill changes the standard of dilution from `actual' to `likelihood' of dilution. This bill addresses the classic view of dilution by blurring, that the injury caused by dilution is the gradual diminution or whittling away at the value of the famous mark, or, as those who have been victims of dilution describe, `death by a thousand cuts'--where significant injury is caused by the cumulative effect of many small acts of dilution.

The language in the bill now squares with what Congress had initially intended. I appreciate the expressed need to impose a more lenient standard. A `likelihood of dilution' standard no longer unfairly requires the senior user to wait until injury occurs before bringing suit.

However, most importantly, an amendment was adopted in Subcommittee to address the First Amendment and free speech issues that were raised at the hearing. The ACLU voiced concerns about the possibility that critics could be stifled by the threat of an injunction for mere likelihood of tarnishment. Furthermore, they were concerned with the balance between the rights of trademark holders and the First Amendment. ACLU joined with INTA and AIPLA in crafting a separate exemption from a dilution cause of action for parody, comment and criticism.

Finally, different intellectual property owners voiced disagreement at the hearing regarding the designation of source language in the bill. After some negotiation between the parties, the conflict has been resolved, and both AIPLA and INTA support the bill. I believe this legislation strikes the delicate balance between protection of property rights and encouragement of healthy competition. I urge my colleagues to support this bill with the amendment and I yield back the balance of my time.

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