Levi Strauss & Co. -- and all brand owners -- won a major victory when the Ninth Circuit Court of Appeals ruled recently that famous trademarks are protected against dilution from third party marks even if they are not "identical or nearly identical" to the plaintiff's famous mark.

The case, Levi Strauss & Co. v. Abercrombie & Fitch, Ninth Circuit Case No. 09-16322 (Feb. 8, 2011), came to the Ninth Circuit on appeal from the Northern District of California. Levi Strauss sued Abercrombie in 2007 for dilution of the Arcuate trademark, the back pocket stitching design which Levi Strauss has used on its LEVI'S(R) brand jeans since 1873 (and which is the oldest apparel trademark still in continuous use). The dilution claim was decided by Judge Jeffrey White. Judge White held that he was bound to apply the "identical or nearly identical" standard that the Ninth Circuit had articulated in prior cases, rejecting Levi Strauss's contention that -- notwithstanding the 9th Circuit's initial comments to the contrary -- Congress had amended federal protections against dilution and that the "nearly identical" requirement should not apply under the Trademark Dilution Revision Act of 2006 (TDRA) .

The Ninth Circuit came down squarely on the side of Levi Strauss, holding that "the 'identical or nearly identical' standard did not survive Congress's enactment of the TDRA." The Court discussed the ancestry of the "identical or nearly identical" standard, tracing its origin to the state dilution law of New York. The Court noted that the TDRA had created a "new, more comprehensive federal dilution act," and held that none of the cases previously decided by the Ninth Circuit squarely presented or resolved the question whether the "identical or nearly identical" standard survived the TDRA's amendments.

Turning to that question, the Court looked to the language of the statute. The Court held that when Congress used the word "similarity" in the TDRA, it set forth a "less demanding standard" than the standard that applied under the old statute. Congress's implementation of a balancing test for likelihood of dilution, using a non-exhaustive list of factors including "degree of similarity," is "simply not compatible" with the "identical or nearly identical" standard. Although similarity is clearly an important factor, it is not controlling. The trademark dilution plaintiff need not show that the junior mark is "identical, nearly identical or substantially similar to the senior mark in order to obtain injunctive relief"; rather, the test is whether the junior mark is likely to impair the distinctiveness of the famous mark.

The Levi Strauss decision eliminates one of the last remaining threshold barriers to protection against dilution for famous marks and has important implications for owners of famous brands. Under the old "identity or near identity" standard, brand owners could bring dilution claims only against junior uses that came close to duplicating their marks. But as KT argued to the Ninth Circuit on behalf of Levi Strauss, a similar mark can weaken a famous mark even if it is not identical, depending on the circumstances -- for example, if the goods are competing or closely related, and the famous mark is particularly distinctive. The Ninth Circuit's holding is especially significant for owners of famous design marks like the Arcuate trademark, whose effectiveness as brand identifiers may be weakened by competing designs that are rarely "identical or nearly identical," but that still may blur consumer perceptions of a famous design mark.