Third time’s a charm for Visa

 

In 2001 Visa International Service Association filed a complaint against JSL Corporation for its use of the trademark EVISA. Visa set forth a number of causes of action in its complaint, including dilution under the Federal Trademark Dilution Act (FTDA) and federal trademark infringement. Visa alleged that JSL was violating Visa’s rights in its well-known and famous VISA mark for credit card services by using EVISA in connection with English language classes. 

 

Six months after filing its complaint, Visa moved for summary judgment. The US District Court for the District of Nevada granted Visa’s motion on its dilution claim in October 2002. The district court held that VISA was a famous mark and had become famous long before JSL began using the EVISA mark. In addition, use of EVISA was likely to dilute the strength of the VISA mark (for further details please see "EVISA mark dilutes VISA, rules court").

 

JSL appealed. In 2003 the US Court of Appeals for the Ninth Circuit remanded the case to the district court with instructions to consider the Supreme Court’s decision in Moseley v V Secret Catalogue Inc (for further details please see "EVISA decision vacated and remanded following Moseley"). In Moseley, the Supreme Court had found that a plaintiff must show actual dilution, as opposed to a likelihood of dilution, to prevail on a FTDA claim.

 

Subsequent to Moseley and the Ninth Circuit's remand, Congress amended the FTDA to specifically provide that a plaintiff need only prove a likelihood of dilution to prevail on a dilution claim. Under the Trademark Dilution Revision Act (TDRA), proof of actual dilution is not required. In addition, before the district court issued its decision on remand, the Ninth Circuit considered another dilution case, Jada Toys Inc v Mattel Inc. In that case, the Ninth Circuit applied the FTDA to the dilution claim because the case was filed before the enactment of the TDRA. Pursuant to this decision, the TDRA was not to be applied retroactively.

 

On remand, the district court determined that based on the Ninth Circuit’s Jada Toys decision, the correct dilution standard to apply in the EVISA Case was actual dilution, as required under the FTDA. The TDRA did not apply because Visa had filed its action before the TDRA was enacted. In December 2007 the district court ruled in favour of Visa, having found that use of EVISA actually diluted the VISA mark.

 

JSL filed a second appeal to the Ninth Circuit. Visa filed an emergency motion with the district court asking that the court retain jurisdiction and apply the likelihood of dilution standard. Visa argued that the district court had misinterpreted the Jada Toys decision and that the correct standard to be applied was likelihood of dilution. Visa further argued that it had filed the emergency motion to avoid the time and expense of a second appeal in the seven-year-old case.

 

Before the district court could entertain Visa’s emergency motion, the Ninth Circuit amended Jada Toys (for further details please see "Ninth Circuit amends HOT WHEELS decision"). The Ninth Circuit also determined that the district court could retain jurisdiction of the EVISA Case. In the December 2008 decision, the district court applied the likelihood of dilution standard and, for the third time, found in favour of Visa.

Leigh Ann Lindquist, Sughrue Mion PLLC, Washington DC