Owners of famous trademarks have a powerful weapon to wield against alleged infringers: dilution claims. Unlike traditional trademark infringement, dilution does not require that the trademark owner prove likelihood of confusion. Dilution provides broader protection against parties attempting to unfairly benefit from the goodwill and reputation of a famous mark.
For nearly a decade in the Ninth Circuit, dilution claims have been strictly limited by requiring a dilution-claim plaintiff to show not only that its mark is famous, but that the allegedly infringing mark is “identical or nearly identical” to the famous mark—a much higher bar than is required to prove trademark infringement. Even after the passage of the Trademark Dilution Revision Act of 2006 (“TDRA”), which neither reiterated nor expressly rejected the “identical or nearly identical” standard, many parties and district courts have continued operating under the assumption that this strict standard survived. In February, the Ninth Circuit rejected this assumption and held unequivocally that the TDRA changed the analysis to allow a lower and more flexible “similarity” standard. Levi Strauss & Co. v. Abercrombie & Fitch Trading Co., 633 F.3d 1158 (9th Cir. 2011).
Levi Strauss and Company (“Levi Strauss”) brought an action in 2007 against Abercrombie & Fitch Trading Company (“Abercrombie”) for several trademark claims, including trademark dilution under federal law. This dilution claim was tried before the court while several other claims were tried before a jury. The court asked the jury to provide an advisory opinion on the following question: “Is Abercrombie’s [design] identical or nearly identical to [Levi Strauss’s trademark]?” Levi Strauss & Co., 633 F.3d at 1160. The jury responded: no. The court agreed and stated in its findings of fact and conclusions of law that for dilution purposes, the parties’ marks must be essentially the same mark. Accordingly, the court entered judgment on the dilution claim in favor of Abercrombie.
Levi Strauss appealed to the Ninth Circuit, arguing that the words “identical or nearly identical” do not appear in the TDRA and thus are not the appropriate standard. Abercrombie responded that case law suggests the strict standard should still apply despite the passage of the TDRA, citing several post-TDRA cases that discussed or cited the “identical or nearly identical” standard. No circuit courts had yet addressed whether the TDRA functioned to lower the dilution standard.
The Ninth Circuit began its opinion by tracking the development of the “identically or nearly identical” standard. It noted that the strict standard had its origins in state dilution law, specifically that of the State of New York, and its adoption was rooted in the language of the Federal Trademark Dilution Act of 1995 (“FTDA”). However, the FTDA was replaced in 2006 by the TDRA, a new, comprehensive federal dilution act that does not use language requiring actual or near identity.
The Ninth Circuit noted that in the TDRA, Congress defined “dilution by blurring” as the “association arising from the similarity between a mark . . . and a famous mark that impairs the distinctiveness of the famous mark” with no requirement of substantial similarity, identity, or near identity. Levi Strauss & Co., 633 F.3d at 1171. Congress’s wording, the Ninth Circuit held, set forth a less demanding standard than had been applied under the FTDA. The court continued that the TDRA sets out a nonexhaustive list of relevant factors for the dilution analysis, including degree of similarity, which would be illogical if identity or near identity were a threshold requirement. Finally, the Ninth Circuit found it persuasive that Congress had not simply altered discrete wording from the FTDA, but rather rewritten the dilution section entirely, suggesting it did not want to be tied to the language or interpretation of the prior law.
As a result, the Ninth Circuit held that the “identical or nearly identical” standard no longer applies. It reversed the judgment of the district court with respect to Levi Strauss’s federal dilution claim and remanded the case to the district court.
The Ninth Circuit’s decision in Levi Strauss & Co. makes the powerful weapon of dilution a much more readily accessible part of a famous trademark owner’s arsenal. Trademark infringement claims already require a showing of some degree of similarity, varying on the strength of the mark. As a result, whenever an owner of a famous trademark sees enough similarity in a third party’s mark to justify a trademark claim, it will likely state a dilution claim as well. Litigants on both sides should thus expect to see dilution claims brought far more frequently.
This loosened standard may also make cases involving dilution claims more expensive. The highly subjective nature of the “similarity” standard will render dilution claims more difficult to dispose of via early dispositive motions.
Trademark owners and potential litigants in other circuits should be on the lookout for similar cases in their circuits. Now that the Ninth Circuit has broken the ice, other circuits will likely be pressed to weigh in by trademark owners attempting to prosecute dilution claims against non-identical infringing marks.