Judiciary HomepageI am the Chair of the Section of Intellectual Property Law of the American Bar Association. The views I will be expressing on H.R. 1295 represent those of the Section of Intellectual Property Law. Although the American Bar Association has supported in principle the enactment of a federal dilution statute since 1979, the views I will be expressing on H.R. 1295 in particular have not been approved by the House of Delegates or Board of Governors of the ABA, and, accordingly, should not be construed as representing the position of the Association.
The Section of Intellectual Property Law has for some time favored the enactment of a federal antidilution statute. Its support for such a statute is grounded in the belief that federal antidilution legislation is likely to produce the following benefits:
1. national uniformity of protection for of famous marks;
2. implementation of the public policy favoring strong protection of marks;
3. prevention of forum shopping, which state antidilution laws encourage; and
4. protection against the destruction of a famous mark through the whittling away of its distinctiveness, which is not provided for under the Lanham Act.
Formerly Section of Patent, Trademark and Copyright Law
The Section of Intellectual Property Law believes that H.R. 1295 is an appropriate mechanism for achieving each of these goals. The Bill would merely reaffirm the federal commitment to the protection of distinctive marks already apparent in such statutes as section 110 of the Amateur Sports Act, 36 U.S.C. 380, that reserve the exclusive right to use particular marks to their owners without reference to the standard likelihood of confusion test for liability. At the same time, it would bring federal trademark legislation into conformity with what the Section believes is a widespread consensus among courts, state legislatures, and commentators alike in favor of increased protection in this area.
The Section of Intellectual Property Law also supports the enactment of H.R. 1270, the Madrid Protocol Implementation Act. H.R. 1270 makes changes necessary in U.S. law to open up the opportunity for international registration of U.S. trademarks.
3. prevention of forum shopping, which state antidilution laws encourage; and
4.4. protection against the destruction of a famous mark through the whittling away of its distinctiveness, which is not provided for under the Lanham Act.
Historical Development of the Antidilution Doctrine
The significant drawbacks of current antidilution law are the direct result of its historical development. originally, trademark suits were actions under the common law, which did not recognize infringement in cases involving noncompetitors because deception did not divert sales. By the close of the nineteenth century, however, English law abandoned this archaic doctrine in Eastman Photographic Materials Co. v. John Griffiths Cycle Corp., 15 R.P.C. 105 (Ch. D. 1898), in which the Eastman Kodak Company successfully enjoined the use of the KODAK mark on bicycles.
Unfortunately, United States courts did not follow the lead of their counterparts in the United Kingdom. Although plaintiffs succeeded in obtaining relief against uses of confusingly similar marks for related products in such rare cases as Aunt Jemima Mills Co. v. Rigney & Co., 247 F. 407 (2d Cir. 1917), cert. denied, 245 U.S. 672 (1918), U.S. courts typically denied injunctions unless the parties, goods were directly competitive with each other. Thus, for example, in Borden Ice Cream Co. v. Borden's-Condensed Milk Co., 201 P. 510 (7th Cir. 1912), the Borden Ice Cream Company failed to prevent use of the BORDEN mark for condensed milk.
This situation led in 1927 to the publication of a landmark law review article, The Rational Basis of Trademark Protection, 40 Harv. L. Rev. 1813 (1927), by Frank I. Schechter, the trademark counsel for the manufacturer of BVD undergarments. In what was to become the talisman of the antidilution movement, Schechter argued that protection of trade identity involves "not only the question of deception of the public, but protection of the owner of the trademark who should be able to prevent other people from vitiating the originality and uniqueness of that mark.0 He noted that if courts permitted Rolls-Royce Restaurants, Rolls-Royce Cafeterias, Rolls-Royce Pants and Rolls-Royce Candy, "in ten years you will not have the Rolls-Royce mark any more.
At approximately the same time as Schechter's article, Judge Learned Hand reached a similar conclusion in Yale Electric Corp. v. Robertson, 26 F.2d 972, 974 (2d Cir. 1928), which approved injunctive relief against a defendant's use of a mark similar to that of the plaintiff but affixed only to non- competitive goods:
It has in recent years been recognized that a merchant may have a sufficient economic interest in the use of his mark outside the field of his own exploitation to justify interposition by a court. His mark is his authentic seal; by it he vouches for the goods which bear it; it carries his name for good or ill. If another uses it, he borrows the owner's reputation, whose quality no longer lies within his own control. This is an injury even though the borrower does not tarnish it, or divert any sales by its use, for a reputation like a face is the symbol of its possessor and creator and another can use it only as a mask.
Ultimately, sentiments such as these did not prevail at the federal level. In the early 1930s, Congress declined to pass the so-called "Perkins Bill,O H.R. 11592, 72d Cong., 1st Sess. (1932), drafted primarily by Schechter and containing provisions that would have protected federally registered coined or inventive or fanciful or arbitrary marks against users of that mark in a manner that might injure the goodwill, reputation, and business credit . . . of the owner of the previously used marks in addition to the traditional protection against passing off.
The defeat of the Perkins Bill, however, came in the face of increasing judicial recognition that protection of marks served a more significant purpose than simply preventing the diversion of trade. As the Supreme Court observed in Mishawaka Rubber & woolen Manufacturing Co. v. S.S. Kresge Co., 316 U.S. 203, 205 (1942):
The protection of a trademark is the law's recognition of the psychological function of symbols . . . a trade-mark is a merchandising short-cut which induces a purchaser to select what he wants, or what he has been led to believe he wants. The owner of a mark exploits this human propensity by making every effort to impregnate the atmosphere of the market with the drawing power of a congenial symbol. Whatever the means employed, the aim is the same - to convey through the mark, in the minds of potential customers, the desirability of the commodity upon which it appears. Once this is attained, the trademark owner has something of value. If another poaches upon the commercial magnetism of symbols he has created, the owner can obtain legal redress.
Various aspects of this new conception of marks are reflected in the Seventy-Ninth Congress, passage of the Lanham Act in 1946. For example, the Act abandoned the test for infringement under the Trademark Acts of 1905 and 1920 that required a demonstration that the parties, goods had the same descriptive properties in favor of the broader likelihood of confusion test reflected in 15 U.S.C. H 1052(d), 1114 & 1124(a). Similarly, sections 15 and 33 of the Act, 15 U.S.C. 1065 & 1115, provide that certain of the rights of federal registrants may become 0 incontestable I after five years of registration, thereby providing a powerful weapon in infringement suits.
Despite these departures from the nineteenth century trademark doctrine, hostility by the Department of Justice towards the creation of property rights in trademarks prevented serious discussion of a federal antidilution cause of action. These sentiments are perhaps best reflected in the contemporary observations of Special Assistant to the Attorney General Bartholomew Diggins in his article, Trade-Marks and Restraint of Trade, 34 Trademark Rep. 71 (1944), that "[the significance and effectiveness of trade-marks in regulating and restricting competition can hardly be overemphasized. Together with patents, trade-marks are included in the chief legal sanctions under which cartels have established, maintained, and enforced restraints of trades Thus, under the Lanham Act, the antidilution concept was not specifically recognized unless it rose to some form of confusion as to origin or sponsorship.
The Current Status of-Antidilution Doctrine
The absence of federal antidilution legislation has produced many of the problems associated with antidilution doctrine. First and foremost of these is that it has encouraged the development of antidilution law on a state-by- state basis. The first state antidilution law granting a specific statutory cause of action did not arrive on the scene until 1947 with the passage of a state antidilution law in Massachusetts, now codified at Mass. Gen. Laws Ann. ch. 110B, S 12. Perhaps significantly, the Massachusetts law differed from virtually all prior proposed antidilution in that applied to more than just "arbitrary or coined," but instead purported to protect the "distinctive quality" of marks.
That the Massachusetts statute reflected a changing conception of trademarks is apparent in the number of states that have adopted similar legislation to fill the gap in the existing version of the federal Lanham Act. Currently, over half the states have adopted antidilution measures, with several others reaching similar rules in interpretations of the common law. Citations for these state statutes, together with summaries of the leading cases interpreting them are summarized in Appendix A to these written comments.
The growing acceptance of the theory that distinctive marks are entitled to protection against more than the use of confusingly similar marks also is reflected in judicial interpretations of the various state statutes. Initially, state and federal courts alike enforced state antidilution statues sporadically and as often as not through misconstruction and distortion of these statutes rather than through the application of their clear language. Nevertheless, courts increasingly have recognized that, in the words of the New York Court of Appeals in Allied Maintenance CorD. v. Allied Mechanical Trades, Inc., 42 N.Y.2d 538, 369 N.E.2d 1162 (1977), mark owners have an interest in preventing the *cancer-like growth" arising from the use of an identical mark on 'dissimilar products or services which feeds upon the business reputation of an established distinctive trademark or name.-
Indeed, antidilution principles even have appeared in opinions by federal courts applying the Lanham Act and traditional principles of unfair competition. For example, in Chemical Corp. v. Anheuser-Busch, Inc., 306 F.2d 433 (5th Cir. 1962), cert. denied, 372 U.S. 965 (1963), the United States Court of Appeals for the Fifth Circuit upheld the entry of injunctive relief against the defendant's "parody" of the plaintiff Is WHERE THERE'S LIFE, THERE'S BUD slogan on the ground that:
[The plaintiff has a property interest in the slogan and..... the defendant, . . . with the purpose of appropriating some of the value engendered in the minds of the public by its use has used . . . a deceptively similar slogan ("Where There's Life, There's Bugs"I in a manner that will bring direct financial loss to the plaintiff . . . by reason of the peculiarly unwholesome association of ideas when the word "bugs" was substituted in the slogan for the word "Bud," a referring to a food product.
Likewise, no less an authority than the United States Supreme Court has advanced the concept of trademark ownership as a property right. In San Francisco Athletic Assn v. United States Olympic Committee 483 U.S. 522 (1987), the Court went through the elements of antidilution analysis in holding that SFAA could not use the term "Olympic" to promote its Gay Olympic Games. Applying section 110 of the Amateur Sports Act, 36 U.S.C. 380, the Court held that the statute. Granted the USC the exclusive right to the term "Olympic", separate and independent of the likelihood of confusion analysis. In doing so, the Court quoted Frank Schechter's 1927 article approvingly in concluding that unauthorized uses of the term "Olympic" could lessen its distinctiveness and commercial value.
Section 110 of the Amateur Sports Act does not hold a unique place in federal law. On the contrary, the Congress has on numerous prior occasions granted the owners of other distinctive marks similar protection on a quasi-antidilution theory. These include federal grants of the exclusive right to use such designations as THE AMERICAN LEGION, 38 U.S.C. 48, AMERICAN WAR MOTHERS, 36 U.S.C. 100, BOY SCOUTS OF AMERICA, 36 U.S.C. 27, FUTURE FARMERS OF AMERICA, 36 U.S.C. 286, and SMOKEY BEAR, 18 U.S.C. 711. Thus, it is apparent that the federal government already has addressed and resolved the perceived problems attached to the protection of mark distinctiveness, at least on the level of individual marks.
Unfortunately, federal legislation on a general scale has yet to catch up with the trend apparent in these other areas. In 1987, the Trademark Review Commission drafted and proposed a new Section 43 (c) to the Lanham Act entitled Protection of Famous Registered Marks From Dilution, a which was reflected in section 36 of S. 1883, 100th Cong., 2d Sess. (1988). The section was grounded in the belief that a limited category of trademarks, those of which are truly famous and federally registered, are deserving of national protection from dilution. Although the Commission narrowly drafted this section to protect only registered marks which have become famous throughout a substantial part of the United States, the proposed antidilution section ultimately was dropped from legislation that eventually secured passage, the Trademark Law Revision Act of 1988, Pub. L. No. 100-667, 102 Stat. 3935 (1988).
H.R. 1295
For several reasons, the Intellectual Property Section of the ABA believes that the time has come for the Congress to take the lead on extending protection to distinctive marks through a federal antidilution . statute. First, the existing patchwork of state antidilution statutes, each of which comes with its own idiosyncracies, renders it difficult for businesses to implement a truly national brand management strategy. Although H.R. 1295, because it does not preempt these statutes, would not immediately remedy this situation if enacted, it nevertheless is likely to "level" the nationwide playing field in much the same manner as the Lanham Act has produced a truly national body of likelihood of confusion law. This is particularly true in light of the Bill's identification of specific factors that properly should be taken into account when determining the eligibility of particular marks for protection -- guidance that is conspicuously lacking from virtually all state legislation. I am pleased to note that not only does the bill contain specific factors to be considered, but that these factors are essentially the same as those endorsed in the policy statement adopted by the intellectual Property Law Section in 1993. This reintroduction of consistency into unfair competition law would greatly benefit plaintiffs and defendants alike.
Second, a federal antidilution statute would reduce significantly the forum shopping that occurs under the present uneven regime of state law protection. Not only do prospective antidilution plaintiffs currently have every incentive to bring their suits in states that have antidilution protection, they have the added impetus to choose a jurisdiction that is willing to apply its law across state lines to reach conduct outside its own borders. Passage of a federal antidilution statute therefore would reduce the number of suits filed in inappropriate venues for the sole purpose of gaining the benefit of local law. In doing so, it also would provide the basis for injunctive relief against dilution on a nationwide basis, just as it is now available against infringement.
Third, a federal antidilution statute would bring the Lanham Act into conformity with mainstream trademark law generally. As described earlier, state legislatures and courts alike are increasingly recognizing the strong public interest in protecting trademarks, whether through expanded applications of existing state laws or through innovative applications of the Lanham Act's likelihood of confusion test for liability. Although, as reflected in the bibliography reproduced in Appendix B to these remarks, the proper scope and breadth of the antidilution doctrine may be subject to reasonable debate, the need for federal action of some sort has been endorsed by virtually every intellectual property organization to address the subject. Significantly, these organizations as often than not represent and include businesses that may very well be defendants, as well as plaintiffs, under the new law.
Finally, federal action is necessary to protect against the destruction of famous marks through the use of identical or similar designations whose use happens not to create confusion. As reflected in such transactions as KKR's acquisition of RJR Nabisco and Philip Morris, purchase of Kraft, the reality is that distinctive brands often possess an economic value that extends far beyond their owners I tangible assets. Allowing a defendant to damage that value by blurring the distinctiveness of those marks is contrary to the otherwise uniform federal policy of protecting the enterprise and investment of businesses, their financial backers, and their employees. Although it is unlikely that the property interests in brands will ever be treated as rights in gross -- and H.R. 1295 does not purport to create such treatment -- it no longer is appropriate to view truly distinctive marks as mere indications of source, subject to damage only when consumers are misled.
This is not to say, of course, that measures such as H.R. 1295 will, or should, entirely displace likelihood of confusion as an analytic tool for determining when a violation of a plaintiff Is rights to its marks has occurred. On the contrary, likely or actual confusion will continue to be the most probative evidence that the distinctiveness of a mark has been violated. If, however, the Congress is to recognize the economic and marketplace realities of distinctive marks on a federal level, likelihood of confusion must be only one form of association with which courts are concerned. Because H.R. 1295 would create a much needed and long overdue form of relief, the Intellectual Property Section of the American Bar Association supports its swift enactment.
H.R. 1270
The Section of Intellectual Property Law of the American Bar Association also supports the enactment of H.R. 1270, the Madrid Protocol Implementation Act. H.R. 1270 would make the necessary changes in our law to allow the United States to conform to the Madrid Protocol. Such conformity would provide a level playing field for U.S. trademark owners with their international counterparts.