The U.S. Court of Appeals for the Fourth Circuit has been asked to decide the extent to which parody can serve as a defense to a claim under the Federal Trademark Dilution Act. Under the revised FTDA, enacted on October 6, 2006, the standard for liability changed from actual dilution to a likelihood of dilution, a somewhat lower threshold that arguably will make it easier for trademark owners to enforce their rights. The FTDA designates certain fair uses of famous marks that would not be considered dilution. One such fair use is parody, which involves the use of a well-known work, usually in a humorous way, to comment on or criticize the trademark owner or its actions. However, it is not a fair use if the purpose of the parody is not social commentary or criticism, but rather, for the purpose of marketing a product. In one of the first cases decided under the revised FTDA, Louis Vuitton Malletier S.A. v. Haute Diggity Dog, LLC, 464 F.Supp. 2d 495 (E.D. Va. 2006), a district court in Virginia held that dog toys sold under the name “Chewy Vuiton,” which parodied the Plaintiff’s marks and trade dress, did not amount to copyright or trademark infringement.

Louis Vuitton Malletier S.A. (“LVM”) manufactures luxury consumer goods under its mark and trade dress, which is comprised of an overlapping L and V monogram along with three motifs and a four pointed star. In 2002, LVM also began manufacturing a line of high-end dog products, including collars and leashes, bearing the LVM mark and trade dress.

The defendant, Haute Diggity Dog, LLC (“HDD”), sells dog toys and beds using names and logos that spoof various famous products and marks. LVM sued, claiming that HDD’s sale of the Chewy Vuiton products infringed its trademarks, trade dress, and copyrights; both parties filed for summary judgment. The court ultimately found that, for each claim, either LVM failed to meet its burden of proving that consumer confusion was likely, or the use constituted a fair use. In its likelihood of dilution discussion, the court noted that LVM’s mark is strong and famous and that the strength of LVM’s mark is not likely to be diluted by a parody involving a dog toy product. The court went on to state that “the success of the parodic use depends upon the continued association” with LVM. While the court found that the decorative pattern used by HDD was sufficiently similar to LVM’s mark to call to mind LVM, the association was necessary for parody and was acceptable because consumers were not likely to think that the source of the product advertised in the parody was LVM. Due to the lack of source confusion, the parody was a fair use. LVM filed an appeal, and has argued, along with amicus the International Trademark Association (INTA), that the Virginia district court misapplied the revised FTDA. Specifically, INTA points out that it is not a fair use, and the revised FTDA states that a party using parody is not exempt from liability under the dilution statute where the party’s mark is used to mark their own product.

Throughout the spring of 2007, the parties and amici have been briefing the issue. The Fourth Circuit’s decision could be significant in providing a mechanism for balancing free speech concerns with trademark owners’ rights.