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On Friday, October 6, 2006, President Bush signed into law H.R. 683, the Trademark Dilution Revision Act of 2006 (the "TDRA").  The law took effect immediately upon the President's signature.

The TDRA is designed to protect famous trademarks from uses that blur their distinctiveness or tarnish their reputation.  The product of a select committee of experts formed by the International Trademark Association, the TDRA is a response to the ruling of the Supreme Court in Mosely v. V Secret Catalogue, Inc., 537 U.S. 418 (2003), as well as the many splits in the federal circuits relating to the current federal dilution statute (the Federal Trademark Dilution Act or "FTDA") and the protection of famous marks in the United States.

In Mosely, Victoria’s Secret relied on the FTDA to sue a store selling lingerie, sex toys, and various other sex-related novelty items to prevent it from using the name Victor’s Little Secret.  In denying Victoria’s Secret’s claim, the Supreme Court’s ruling severely restricted the applicability of the FTDA and/or caused confusion and disagreement among the lower courts with respect to four issues:

(1)        Mosely held that the Federal Trademark Dilution Act required proof of actual dilution instead of only a likelihood of confusion.

(2)        Mosely left unclear what type of evidence would suffice to prove actual dilution and what would constitute dilution by "blurring."

(3)        Mosely left open the possibility that no direct proof of actual dilution was necessary where the junior and senior marks were identical—a possibility that was adopted by some lower courts and rejected by others.

(4)        Mosely called into question whether the Federal Trademark Dilution Act provided any relief in the case of tarnishment.

In addition to the issues raised by Mosely, several other problematic issues and questions had arisen in the lower courts regarding the FTDA.  Among them were:  (1) whether a famous mark that had acquired distinctiveness over time (i.e., a mark that is not inherently distinctive) was eligible for protection under the FTDA, and (2) whether a mark that was famous only in a niche market was entitled to protection under the FTDA.

The TDRA addresses all of these issues and questions:

In relevant part, the TDRA provides: "the owner of a famous mark that is distinctive, inherently or through acquired distinctiveness, shall be entitled to an injunction against another person who, at any time after the owner’s mark has become famous, commences use of a mark or trade name in commerce that 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."  Thus, the TDRA eliminates the requirement of proving actual dilution as opposed to a likelihood of dilution.  It also makes clear that dilution includes tarnishment, and that marks which have acquired their distinctiveness are protected.

In addition, apparently addressing the Supreme Court’s comment in Mosely that "‘[b]lurring’ is not a necessary consequence of mental association," the TDRA provides factors to consider in determining whether there is a likelihood of dilution by "blurring," including:  "(i) The degree of similarity between the mark or trade name and the famous mark.  (ii) The degree of inherent or acquired distinctiveness of the famous mark.  (iii) The extent to which the owner of the famous mark is engaging in substantially exclusive use of the mark.  (iv) The degree of recognition of the famous mark.  (v) Whether the user of the mark or trade name intended to create an association with the famous mark.  (vi) Any actual association between the mark or trade name and the famous mark."

Finally, the TDRA also includes a provision that states: "a mark is famous if it is widely recognized by the general consuming public of the United States," which eliminates the possibility that a mark can be famous for purposes of dilution if it is famous only in a niche market. 

In conclusion, the TDRA goes far toward protecting the rights of famous trademark owners, which previously had been eroded by Mosely, so long as their trademarks are famous throughout the country, but it erodes protections for trademarks that are famous only within a niche market.