The Trademark Dilution bill is unfortunately set for passage on the floor schedule (it’s currently number 27).
Trademark is an interesting animal in the intellectual property kingdom: Instead of being used as a limited monopoly to promote the sciences and useful arts, trademark can be a perpetual monopoly used to help consumers identify goods and services. A more recent flavor of trademark that cuts against its general consumer-protectiveness is dilution. Traditional trademark is changed by asking if the use of a mark, even in non-competitive markets, causes the mark to lose its association with a singular source or company, regardless of consumer confusion. Thankfully the US Supreme Court has up-to-now interpreted dilution narrowly, by saying the trademark holder has to show that actual dilution has occurred.
You may recall that this bill makes it much easier for trademark holders to receive court injunctions against another who’s use of a mark is:
“likely to cause dilution by blurring or dilution by tarnishment of the famous mark, regardless of the presence or absence of actual or likely confusion, of competition, or of actual economic injury.”
If you think it sounds like a rather weak standard, you’re probably right. Even worse, originally, limitations like fair use didn’t apply. We worked with folks like the Public Citizen, ACLU, and the EFF and with a little help from McDreamy (1,2(PDF)), an exclusions provision to allow for fair and non-commercial uses, was added to the bill.
Great, so the problem was fixed, right? We wish… The generally weak dilution standard still persists, but not only that, because of where the exclusions were placed in the bill, there’s a bigger question of whether the exclusions of fair use, et al, will apply to the whole of trademark law.
Huh? Okay, let’s try and take a step back. You may have read recently about the controversy of Apple Computers sending cease & desist (C&D) letters to companies who use the word “pod” or even as recently as last Friday, “podcast” in their product or service name. Generally, those are commercial uses, so regardless of whether or not Apple’s claims have merit, HR 683 isn’t going to change that issue.
However, think if you were using the term “pod” or “podcast” in a non-commercial setting. Thousands of users have setup their own podcasts to talk about whatever they want to—some commercial, but I would say predominantly non-commercial. If they use the term “podcast” to describe what they do, because of HR 683, the concepts of fair use or non-commercial use would not protect them. Why? Because the exclusions in the bill were applied only to the “subsection” of dilution, and not to the full section of the trademark statute.
While it looked like we were going to get out of this Congress without trademark dilution, the aforementioned groups have improved and delayed the bill as long as possible. We made our dent by getting the provisions to at least apply to dilution and there is hope for some positive legislative history language. Perhaps we can hope for some black-letter law fixes to these changes to trademark law next year.
This is indeed problematic
This is indeed problematic for hundreds of thousands of fan/enthusiast businessmen nationwide. The Fourth Circuit Court of Appeals had stated in ‘98, in in Ringling Bros.-Barnum & Bailey Combined Shows, Inc. v. Utah Division of Travel Development, that:
“[t]he real interpretive problem has been with how harm to the senior mark’s selling power resulting from the junior mark’s use could be proved.” It rejected the method of simply presuming such harm from the identity or near-identity of the marks, the effect of which would be to create property rights in gross, reasoning that actual economic harm cannot be presumed based solely on a replicating or near-replicating junior use: “(i)ndeed, common sense suggests that an occasional replicating use might even enhance a senior mark’s ‘magnetism’—by drawing renewed attention to it as a mark of unshakable eminence worthy of emulation by an unthreatening non-competitor.” The mere replication or near-replication of an established mark, therefore, should not be grounds for a presumption of dilution.”
While a famous case about Sweet Pea has been voluntaily dismissed by the plaintiff, there are many other small artists and vendors not so lucky. An example is the suits brought about by Volkswagen and specifically VWoA. Gregory D. Phillips, on behalf of Volkswagen of America, Inc. has sent out notices stating that the use of images bearing the distinctive shape of the Classic and New Volkswagen vehicles, the VW Emblem and/or other VW trademarks and trade dress infringes upon their intellectual property rights (trademark/copyright). What this has meant in practice that specialty repair shops that say things like “VDub specialties” or “Joe’s VW repair shop” where the terms are used to describe what services they specialize in, have been given cease and desist orders, and fan/enthusiast businesspeople making T shirts or mugs with stylized sketches of vehicle that haven’t been onthe market in 30 years, are also being sued.
According to regular trademark law, these uses would be legal as there is no intent to counterfeit, nor is there confusion that you are buying a real VW car. Just an enthusiast design promoting your fandom of said car. Under trademark Dilution law, as the Fourth Circuit Court stated, a junior use of a trademark, even a replica trademark, can be shown to enhance the sr. marks position. And in the case of an enthusiast produced product like a T shirt or bumper sticker, that is, in fact, the intent. And yet that’s also being attacked by VW (And DaimlerChrysler, Ford, GM, etc)
Ironic that using a trademark to make fun of that trademark is protected by law, but using a trademark to show your fandom of that trademark is actionable…
And of course, now the wording in the trademark dilution law is being changed to allow for mere “likelihood” of dilution, which is not only against promoting commerce, it’s so intentionally vague that it borders on criminal. It’s easy to prove the “likelihood” of anything. There’s a “likelihood” that space aliens will abduct the President tonight. Not a big likelihood, but a likelihood nonetheless. That kind of terminology should never be in law of any sort.
In any case, as a small business owner who is making enthusiast products, how would one deal with the few “big boys” who can’t see the benefits and support generated by said enthusiast products? (I had a friend get a cease and desist letter from DaimlerChrysler for producing a T shirt to promote his Jeep club, that featured a caricature of a Jeep crawling on rocks). And what do I need to do, as a small business person, to make it so that tens of thousands of other small business owners don’t have to get letters of approval from these businesses every time they come up with a new design?