Likelihood of dilution sufficient in administrative proceedings

The Trademark Trial and Appeal Board (TTAB) has at last published its decision of June 2003 in NASDAQ Stock Market Inc v Antartica Srl holding that claimants in opposition proceedings need only show a likelihood of dilution under the Federal Trademark Dilution Act (FTDA) to support an opposition. It is the first time that the TTAB has directly addressed the issue of dilution since last year's Supreme Court decision in Moseley v Secret Catalogue Inc.

Moseley was the Supreme Court's first opportunity to construe the FTDA. The court held unequivocally that the FTDA is designed to remedy actual dilution. It rejected the approach of some circuit courts, which suggested that the likelihood of dilution test mirrored the likelihood of confusion test for trademark infringement. However, Moseley left open the issue of how to prove actual dilution (see Federal Trademark Dilution Act requires proof of actual harm). Moreover, it remained unclear whether the requirement for a showing of actual dilution also applied in administrative proceedings before the TTAB. The NASDAQ Case gave the TTAB the opportunity to rule on this issue.

Antartica Srl, an Italian corporation, sought to register a mark featuring the word 'nasdaq' in a stylized bird design for use in connection with various sporting equipment. Antartica based its US application on its Italian application (which later matured into registration) pursuant to Section 44 of the Lanham Act. Nasdaq opposed the application on the basis of its various NASDAQ marks.

The TTAB upheld the opposition. While applications under Section 44 must be supported by a bona fide intent to use the mark in US commerce, the applicant need not provide evidence of actual use. Here, Antartica admitted that it had made no use of its NASDAQ mark in the United States at the time Nasdaq filed its opposition. The TTAB reasoned that, were Nasdaq held to the Moseley standard requiring proof of actual harm, it would be hard pressed to explain how it was being injured without Antartica having made a single sale in the United States. The Moseley standard may thus have prevented Nasdaq from barring the registration of a junior mark that clearly threatened blurring its famous NASDAQ marks. Realizing the incongruity of such a result, particularly in the case of intent-to-use or Section 44 applications where use may not yet have occurred, the TTAB held that "in a [TTAB] proceeding, a plaintiff that establishes its ownership of a distinctive and famous mark may prevail upon a showing of likelihood of dilution".

In reaching this conclusion, the TTAB focused on the difference between the FTDA as enacted by Congress (where a junior user is enjoined from using any mark that dilutes a famous and distinctive mark) and the language in the Trademark Amendments Act 1999 directed toward TTAB proceedings. That act added, as a basis for opposing or petitioning to cancel the registration of a mark, the allegation that when used, the junior mark would dilute a famous and distinctive mark. Relying both on the prospective language used in the act and the fact that US applications may now be based on an intent to use, without actual use, the TTAB concluded that whereas civil litigants must prove actual harm from dilution before obtaining injunctive relief, it was Congress's intention to permit the TTAB to hear cases of prospective dilution in federal registration proceedings.

In addition, the TTAB instructed that for dilution claims, the US Patent and Trademark Office would consider "whether target customers are likely to associate two different products with the mark even if they are not confused as to the different origins of these products". This formula may prove valuable guidance to trademark owners in TTAB proceedings.

Tila Duhaime, Fitzpatrick Cella Harper & Scinto, New York

Get unlimited access to all WTR content