Dilution is added as part of the unfair competition section of the Lanham Act.
Review of Similarities and Differences Between State and Federal Anti-Dilution Laws
There are similarities and significant differences between the Federal Act and the Model State Trademark Act of 1964. Most states still use a version of the Model Act of 1964, so that law retains its vitality and importance. The following are highlights of some of the important features of state and Federal Anti-Dilution laws:
- The 1964 Model State Act and the Federal Act both protect against “dilution,” the whittling away of the distinctive quality of the mark. The Model Act of 1964 includes a prohibition against “injury to business reputation,” but the phrase is not part of the Federal Act. Arguably, “injury to business reputation” is a broad standard that provides a separate basis for relief.
- The 1964 Model State Act did not include a definition of “dilution.” The Federal Act defines dilution in a way similar to that used by courts construing the 1964 Model State Act: The lessening of the capacity of a famous mark to identify and distinguish goods or services, regardless of whether the owner of the famous mark and other users are in competition, and regardless of the likelihood of confusion to consumers.
- By its definition, the Federal Act makes explicit what most courts construing the Model Act have long held: Only “strong” trademarks need apply. The Federal Act describes the marks entitled to protection as “distinctive and famous” and lists factors in determining whether the mark is entitled to such protection. Cases under the 1964 Model Act, however, had not generally required the trademark to be “famous.”
- Both the Model Act and the Federal Act primarily allow for an injunction against the diluting uses. Most courts construing the 1964 Model State Act have not allowed any claims for monetary damages. If the defendant willfully intended to trade on the owner’s reputation or to cause dilution, the new Federal Act allows several types of monetary damages.
- The Federal Act specifically exempts use of a famous mark in comparative commercial advertising or promotion to identify competing goods or services, non-commercial use, reporting and news commentary. Courts construing the 1964 Model Act have generally implied such exclusions as well.