ABSTRACT

The Ninth Circuit Court of Appeals affirmed the district court’s grant of summary judgment to plaintiff on its claim that defendant’s eVISA mark used for a “multilingual education and information business” diluted plaintiff’s famous VISA mark for credit/debit-card services. On appeal, defendant argued that the district court erred as a matter of law because “visa” is a common English term with a dictionary definition, namely, a travel document allowing the bearer to enter the country. Given this common dictionary definition, defendant asserted that “visa” was not sufficiently distinctive to deserve antidilution protection. The court of appeals rejected this argument, holding that dilution protection can extend to common English terms that also function as arbitrary trademarks, and that dilution protection depends upon whether the term uniquely identifies a single good or service in the trademark context. If consumers uniquely associate a term/mark with a single product, dilution by blurring occurs whenever consumers are likely to start associating that same term/mark with additional products. In this case, consumers uniquely associate the trademark VISA with plaintiff’s credit/debit cards (despite its common, unrelated meaning in English), and defendant’s use of eVISA for multilingual education will likely destroy the uniqueness of that consumer association by causing consumers to also associate VISA or eVISA with defendant’s services.

CASE SUMMARY

FACTS

Joseph Orr began offering an English tutoring service while living in Japan called “Eikaiwa Visa” (Eikawa means “English conversation” in Japanese). The name was meant to suggest the ability to travel, both linguistically and physically, in the English-speaking world. Orr later transformed his tutoring service into an Internet-based multilingual education and information business, shortened the name to eVISA, moved his business to New York, and began operating his business through Defendant JSL Corporation (“JSL”). Visa International Service Association (“Visa”) then sued JSL on the ground that the eVISA mark was likely to dilute its VISA trademark.

The district court granted Visa’s motion for summary judgment and JSL appealed, claiming that the district court erred as a matter of law when it found the eVISA mark was likely to dilute the VISA mark. Specifically, JSL argued that its mark cannot cause dilution because the shared term VISA is a common English term with a dictionary definition and therefore does not deserve antidilution protection.

ANALYSIS

To obtain relief under federal antidilution law, Visa was required to show (1) that its mark is famous, (2) that JSL began using eVISA after the VISA mark became famous, and (3) that JSL’s mark is likely dilute the VISA mark. JSL conceded the first two elements, namely, that Visa’s VISA mark was famous at the time Orr began using eVISA. Thus, the only question on appeal was whether the eVISA mark is likely to dilute the VISA mark.

The court determined that dilution by blurring occurs when a mark previously associated with a single product also becomes associated with a second product. In such cases, the “commercial magnetism” of the mark becomes weakened because consumers now associate the mark with two products rather than just one.

In analyzing the likelihood of dilution by blurring, the court considered (1) the similarity of the marks, and (2) the distinctiveness and recognition of the plaintiff’s mark. Given the online nature of JSL’s business, the court determined that the “e” prefix in JSL’s mark was a generic feature akin to “Inc.,” and thus was incapable of distinguishing the two marks. As such, the marks were effectively identical. With respect to distinctiveness and recognition, the court accepted Visa’s uncontroverted evidence that VISA was the top brand in the financial-services industry and that the VISA card was the most commonly used credit card for online purchases. Visa also submitted survey evidence showing widespread consumer association of the VISA mark with its services.

The court noted that JSL failed to present any evidence that third parties had used VISA as a trademark, and had failed to present any other evidence to rebut the distinctiveness and consumer-recognition evidence submitted by Visa. As such, the evidence of record created an inference that dilution was likely, and was therefore sufficient to support the district court’s summary judgment.

JSL also argued that, as a matter of law, the VISA mark cannot be accorded protection from dilution because “visa” is a standard English word with a dictionary definition, namely, a travel document authorizing the bearer to enter a foreign country.

The court rejected JSL’s argument on a number of grounds. First, as used by Visa, the VISA mark does not directly describe credit-card services and thus is sufficiently distinctive for protection. Second, the common nontrademark use of a term does not preclude its ability to function as a unique trademark. Rather, dilution protection depends upon whether the term uniquely identifies a single good or service in the trademark context. For example, while there are many “camels” in the sense of a desert animal, the court noted that there is only one CAMEL brand uniquely identifying a cigarette. Similarly, while there are many “tides” along the oceanfront, there is only one TIDE brand uniquely identifying a laundry detergent. Thus, the court reasoned, CAMEL cupcakes and TIDE calculators would dilute the value of those marks because they would cause consumers to associate CAMEL and TIDE with two products rather than one. Likewise, despite the common English meaning of “visa,” the record showed only one famous VISA trademark. Consequently, dilution was likely because the introduction of the eVISA mark into the marketplace would cause consumers to associate the VISA mark with two products instead of just one.

The court noted that the situation would be different if JSL were using eVISA to identify a service that obtained travel documents. In that case, JSL would be using “visa” solely for its generic dictionary meaning. Because Visa does not own the word “visa” in all contexts, but only as a trademark, such a generic usage would not violate Visa’s rights. Moreover, such generic use of “visa” would not dilute the VISA mark since it would not create a new product association for VISA in the minds of consumers. Rather, consumers would simply associate “visa” for travel documents with the standard dictionary definition of the word.

The court rejected JSL’s argument that its use of “visa” is akin to a generic usage. While JSL may have intended to invoke the idea of travel generally, it is not an actual visa service, but is instead an online multilingual education and information business. Thus, eVISA would not merely elicit the standard dictionary definition of “visa,” but would instead refer to JSL’s particular service, thus causing consumers to associate VISA with both Visa’s and JSL’s services rather than just Visa’s services.

Accordingly, the Ninth Circuit found dilution to be likely and affirmed.

CONCLUSION

Dilution is most frequently associated with famous coined or fanciful marks, such as KODAK and EXXON. This decision is interesting because it provides an excellent analysis of the dilution test for arbitrary marks, focusing on the uniqueness of the consumer’s association of the mark with a single product. By focusing on the “unique association” aspect of dilution, the court clearly rejects the notion that an arbitrary mark cannot be protected from dilution because it is also a common English term. Finally, the decision is also notable because it does not assume that consumers will always associate the famous arbitrary mark with plaintiff (a practice criticized by McCarthy), but instead looks to evidence of general brand recognition and survey evidence to establish such an association in the minds of consumers.