Hero to Zero: How Trademark Dilution Weakens Your Trademark Value?

Do you own a famous trademark or planning to get one registered for your company? If yes, did you know that a dilution can weaken a famous trademark? This article covers A to Z of trademark dilution and associated laws that make the basis for dilution protection. Also, we will discuss how one can safeguard their mark from dilution.

What is Trademark Dilution?

Trademark dilution is the process when the value, distinctive quality, or reputation of a trademark is harmed due to its unauthorized usage. The legal action for trademark dilution can be initiated under state as well as federal courts. However, the two compulsory requirements for a trademark to be considered diluted are:

  • The original trademark should be famous, i.e., it should be a public name. Some trade names with a high degree of recognition are GOOGLE, DISNEY, SONY, and APPLE.
  • The impugned trademark’s usage must blur or tarnish the original trademark’s value in the market.

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What are the types of trademark dilution?

Trademark dilution can be of various types depending on the harm it causes to the original mark. Moreover, there are three main types of dilution are blurring, tarnishment, and free-riding.

  • Blurring: Eroding of a famous mark’s selling power by its unauthorized use. Thus, it refers to the original trademark losing its value and distinguished nature because of a new trademark offering different products.
  • Tarnishment: The image of the famous mark tarnishes when the impugned trademark owner sells poor-quality products.
  • Free-Riding: Free-riding is prominent in the European Union where it refers to a famous trademark for irrelevant products or services. Additionally, free-riding illegally associates irrelevant goods or services with the famous mark’s legitimate products.

What is the difference between trademark infringement and trademark dilution?

Trademark DilutionTrademark Infringement
  In trademark dilution cases, the goods and services of the impugned trademark need not be similar.  The goods or services offered by the infringer are from a similar sector or geographical location.  
  Deciding criteria are: Dilution by blurringDilution by tarnishmentFree-Riding  Deciding Criteria are: Likelihood of confusion/consumer confusionGeographical area of operation of involved businessesSimilarity in target customer base  
  For example, a company using the name Mercedes for selling watches is trademark dilution as it will weaken the image of the original company. But it will not be regarded as trademark infringement as the sectors are different.  For example, if a company uses the same name and logo to sell the same product, suppose someone uses the name Mercedes for selling cars, it is a case of trademark infringement.  
Difference between Trademark Dilution and trademark Infringement

 Which jurisdictions recognize the concept of dilution?

The concept, punishments, and claim of dilution vary with jurisdictional area. Some nations have explicit laws to address trademark dilution claims and provide dilution protection while some don’t.

Trademark Dilution Laws
  • USA, European Union, India, Japan, etc. have exclusive laws and regulations that recognize dilution of a mark.
  • On the other hand, Canada, Australia, and most South American Countries provide protection against dilution under other laws without any explicit law. For example, In Canada, the unauthorized use of a trademark that weakens the goodwill of another trademark is not allowed.

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Trademark Dilution Law in the USA

The Federal Trademark Dilution Act of 1996

FTDA, 1996 provides the right to act in order to safeguard a trademark from

  • Unauthorized use
  • Someone trading on the mark’s goodwill
  • Dilution or weakening the distinguished identity of trademarks.

Under FTDA, 1996; both likely dilution and actual dilution are included to identify and eliminate risks beforehand. So, if someone owns a famous trademark, then he can legally initiate for an injunction against the impugned party diluting the original trademark’s distinctiveness. The entitlement to an injunction is available whether or not there is a likelihood of confusion or economic loss.

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Under FTDA, five factors act as evidence of fame of the mark in connection:

  • Duration
  • Volume
  • The geographic extent of marketing and advertising
  • The geographic reach of products offered
  • The extent of real recognition

Moreover, dilution claims are only valid if the mark at issue was well-known before its unauthorized use began.

Trademark Dilution by Blurring in the USA

The relevant factors that Decide Blurring under FTDA are:

  • The degree of similarity between an impugned party’s trademark or name and the famous mark
  • The level of the famous trademark’s distinctiveness
  • The extent of involvement of the famous trademark’s owner in substantially explicit use of the mark
  • The level of recognition and degree of distinctiveness of the famous mark
  • If the impugned party intended to associate their mark with the famous mark
  • Whether or not there is any actual association between the impugned party’s mark and the famous mark.

The Trademark Dilution Revision Act, 2006

TDRA revised the Lanham Act by removing the necessity to prove actual confusion, competition, or any treble damages. Also, this act provides an option to the famous mark’s owner to seek additional civil action if the impugned party:

  • Ist used the trade name or trademark in the market after 2006
  • Intentionally traded on the fame of the mark
  • Intentionally traded to weaken or harm the distinctiveness of the recognized mark

What are the elements of trademark dilution?

The two elements of trademark dilution are fame and the likelihood of unauthorized mark weakening the famous mark’s image

  1. Fame—in most nations, either courts or trademark offices determine the actual recognition levels of the mark.
  2. Likelihood of impugned party’s mark use weakens the distinctiveness of the recognized trademark—The owner of the famous mark needs to prove just the likelihood of dilution and not actual dilution. It is up to the court whether there is an actual diluting or not.
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How can TMReady Save your Mark from Dilution and Infringement?

If you think that your trademark is risk-free, you are living in an illusion. Trademark dilution is especially prominent in this highly competitive world where thousands of filings and registrations happen each day worldwide. Every famous mark owner stands amid the risk of dilution. It is quite possible that someone will keep on using your established mark that will attract sales to their company and harm your brand identity. But how do you stop your trademark’s dilution? The solution is our trademark monitoring services. Our monitoring services identify the potential marks that could dilute or infringe upon our marks. Therefore, you can save your famous mark from weakening due to dilution.
To know more about our services, Visit us.

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