Trademark Dilution Revision Act may not meet mark owners' hopes

On October 6 2006 the Trademark Dilution Revision Act 2006 (TDRA) was signed into law in the United States. Among other changes, the TDRA abrogated the restrictive actual dilution standard for liability under the former law. In its place, the TDRA made it possible for a plaintiff to secure relief on a showing that the defendant's use of a similar mark is likely to dilute the distinctive quality of the plaintiff's mark. Harmonizing federal law with the doctrine prevailing under most state dilution laws, the TDRA also expressly recognized that dilution can take two forms. First, "'dilution by blurring' is an association arising from the similarity between a mark or trade name and a famous mark that impairs the distinctiveness of the famous mark". Second, "'dilution by tarnishment' is association arising from the similarity between a mark or trade name and a famous mark that harms the reputation of the famous mark".

Despite these reforms, which were aimed at increasing the scope of protection for famous marks, the first opinion to apply the TDRA has demonstrated that this legislation may not be the panacea that famous mark owners thought it might be. In Louis Vuitton Malletier SA v Haute Diggity Dog LLC 1:06cv321 (JCC), 2006 US Dist LEXIS 80575 (ED Va), November 3 2006, the plaintiff, Louis Vuitton Malletier SA, the manufacturer of luxury consumer goods, including luggage and handbags, which it sells under the LOUIS VUITTON and LV marks, brought an action against a company called Haute Diggity Dog LLC. Haute Diggity Dog sells plush stuffed toys and beds for dogs under names modelled on other parties' trademarks. Two such names were CHEWY VUITON and CV, which Haute Diggity Dog used in connection with canine chew toys.

In its suit, Louis Vuitton alleged both dilution and infringement. Following entry of summary judgment in Haute Diggity Dog's favour on Louis Vuitton's infringement claims, the court held that the TDRA had retroactive effect and that Louis Vuitton needed only to prove a likelihood of dilution to secure injunctive relief. Nevertheless, the opinion went downhill from there for Louis Vuitton. As to Louis Vuitton's blurring claims, the court noted that "[d]ilution by blurring occurs when consumers mistakenly associate a famous mark with goods and services of a junior mark, thereby diluting the power of the senior mark to identify and distinguish associated goods and services". Relying on interpretations of the likelihood of dilution standard under New York state law, the court found that there was "no likelihood that the parody of the plaintiff's mark by the defendant will result in dilution of plaintiff's mark". It further explained that:

"the mark continues to be associated with the true owner, [Louis Vuitton]. Its strength is not likely to be blurred by a parody dog product. Instead of blurring [Louis Vuitton's] mark, the success of the parodic use depends on the continued association with [Louis Vuitton]."

Accordingly, the court entered summary judgment of non-liability on Louis Vuitton's dilution-by-blurring claim.

Louis Vuitton's dilution-by-tarnishment claim fared no better. The court began its analysis by holding that "[t]arnishment occurs when the plaintiff's trademark is likened to products of low quality, or is portrayed in a negative context". Nevertheless, the court also observed that "[w]hen the association is made through harmless or clean puns or parodies ..., tarnishment is unlikely". Applying this standard, the court concluded that Louis Vuitton had offered only a "flimsy theory" of why Haute Diggity Dog's use might be considered tarnishing: "[A] pet might some day choke on a Chewy Vuiton squeak toy and incite the wrath of a confused customer against Louis Vuitton". Holding this showing inadequate as a matter of law, the court entered summary judgment in Haute Diggity Dog's favour on Louis Vuitton's tarnishment claim as well.

Theodore H Davis Jr, Kilpatrick Stockton LLP, Atlanta