An Overview On The Concept Of Dilution Of Trademark

Introduction

The term “trademark dilution” refers to the unauthorised use of, and/or application for, a trademark that is likely to damage an established mark’s distinctiveness. The issue of whether a well-known trademark has been diluted is distinct from the issue of whether it has been violated, that is, if the illegal use is likely to lead to consumer confusion (though trademark owners often allege both dilution and infringement together when enforcing famous trademark rights). Blurring is the most frequent sort of dilution, though there are other categories as well. Additional sorts include trademark dilution and free riding in the EU.

[Image Sources : Shutterstock]

In contrast to trademark infringement, trademark dilution does not always entail the unlicensed use of a mark in connection with products or services that are confusingly similar to those provided in connection with the well-known mark. For instance, even if luxury automobiles and harmonicas are so unconnected that people are unlikely to think Ferrari harmonicas are made by the renowned automaker, so it will lead to the unauthorised use of FERRARI as mark dilution and not as mark infringement. Marks that are so well-known, highly regarded, or famous that governments have determined they warrant protection regardless of whether their unauthorised use is likely to lead to consumer confusion are protected by trademark dilution.

Trademark Dilution

A well-known brand’s owner has the legal authority to forbid third parties from using their mark since doing so compromises their exclusivity or damages their reputation. This is known as trademark dilution. In reality, no one has the right to imitate any well-known brand or to misuse that trademark’s good name. Instead, dilution protection is meant to prevent a sufficiently well-known and strong trademark from losing its exclusive connection to a specific product in the minds of the general public.

Important elements

The important elements of the trademark dilution were given in a landmark case of ITC v Philip Morris Products SA & Ors[1]. According to the case law following are the main elements of trademark dilution.

1. The impugned mark is identical or similar to the well-known mark

2.The well-known or the injured mark has a reputation in India

3.The use of the impugned mark is without due cause

4.The use of the impugned mark leads to the unauthorised use of the well-known mark.

History of trademark dilution

Trademark dilution dates all the way back to 1927. The concept of trademark dilution was initially introduced by renowned author of the “Historical Foundations of the Law Pertaining to Trademarks,” Mr. Frank Isaac Schechter, in his work “The Rational Basis of Trademark Protection,” which was published in the Harvard Law Review. In his article, Schechter stated that trademark protection should go beyond resolving problems with public dishonesty and instead should include stopping people from “destroying the originality and uniqueness of the mark”. Due to his work outlining the principle of dilution, Frank Schechter is referred to as the “father of dilution”.

Types of dilution

There are mainly two types of dilution in trademark.

1. Blurring
2. Tarnishing

1.Blurring

Blurring happens when a well-known trademark’s distinctiveness is compromised by a trademark that was made by an unauthorised party. For instance, if a company uses the “FACEBOOK” logo on toothpaste, customers may start to identify the toothpaste brand with the well-known “FACEBOOK” mark. The term “blurring” usually refers to the loss of distinctiveness brought on by the unlawful use of a mark on unrelated goods. Blurring happens when a third party’s use of a trademark reduces the possibility that it will be used to distinguish the owner’s goods from others’ and reduces its ability to generate sales.

2.Tarnishing

Dilution by tarnishing refers to the method when the status of a similar mark or a well-known mark concerning a trade name is injured. For example, if someone sells T-shirts with bigoted cartoons on them under the mark “Amazon,” the use of “Amazon” on bigoted T-shirts might blemish the reputation of the web-retailer Amazon.

Theory of Trademark Dilution

The Trade and Merchandise Marks Act of 1958 did not contain the Doctrine of Dilution, as is the case with section 29(4)[2], which is the first act to include the Doctrine of Dilution. But with regard to internationally recognised status, the court established the notion of dilution much earlier than the Act.

According to Section 29(4) of the Trademarks Act, use of a mark that is:

1. Identical or similar to a registered trademark that already has a reputation in India; and
2. Used on goods or services other than those covered by the registration constitutes trademark infringement in the form of dilution.

If it is determined that using the infringing mark results in the following outcomes, infringement has occurred:

1. When someone unfairly exploits a reputable brand or a mark with a distinctive character.
2. When the mark is detrimental to the well-known or unique mark.

The notion of dilution has already been applied by the court before the act. The famous case of Daimler Benz Aktiegessellschaft & Anr. v. Hybo Hindustan[3], in which the defendant utilised the mark BENZ combined with a three-pointed human in a ring for his underwear line, is one where the court used dilution prior to the act. In this case, the High Court granted the plaintiff an injunction and declared that anyone who copied a trademark like Mercedes-Benz would be violating Indian trademark law. Here the court said that such marks are not up for grabs and will lead to the dilution.

Exceptions

As the coin have both the side in the same way the doctrine of dilution of trademark also have some exceptions.

Following are the exceptions of the trademark dilution –

Any legitimate use of a famous mark by a third party, including a nominative or descriptive use or the facilitation of such a use, other than to identify the source of the third party’s own products or services, including use in connection with-

1. Comparison of goods and services by customers through the means of advertising or promotion.
2. Identifying or criticizing or commenting over the mark of the famous goods and services.
3. News reporting and news commentating done in any form.
4. Any mark which includes any parodies or any remark.

The exception to the parodies was used in the case of  Louis Vuitton Malletier S.A. v. Haute Diggity Dog.[4]in which the LLC, the defendant makes dog clothes under the name Chewy Vuitton, a spoof of the plaintiff’s well-known clothing line Louis Vuitton. The court ruled that because “Chewy Vuitton” was just a parody of “Louis Vuitton,” it did not infringe upon the brand’s trademark.

Conclusion

The authority granted to the owner of a famous trademark is known as the doctrine of dilution. This philosophy will assist in stopping the ongoing fraudulent acts and preserving the companies’ good names. These well-known businesses contribute to the rise in our nation’s GDP, and it is the responsibility of the government to shield them from rivalry and other dishonest business practises.

Author: Ritika Bhati, a Student of BBA.LL. B(H.) of Indore Institute of Law, in case of any queries please contact/write back to us at support@ipandlegalfilings.com or IP & Legal Filing.

References

1. https://www.inta.org/fact-sheets/trademark-dilution-intended-for-a-non-legal-audience/
2. https://blog.ipleaders.in/doctrine-dilution-trademarks/
3. Benz Aktiegessellschaft & Anr. v. Hybo Hindustan, AIR 1994 Delhi 239, 1994 RLR 79
4. Louis Vuitton Malletier S.A. v. Haute Diggity Dog, 507 F.3d 252 (4th Cir. 2007)

[1] ITC LIMITED VS. PHILIP MORRIS PRODUCTS SA & ORS.2010 (42) PTC 572 (Del.)

[2] Trademark act,1999

[3] Benz Aktiegessellschaft & Anr. v. Hybo Hindustan, AIR 1994 Delhi 239, 1994 RLR 79

[4] Louis Vuitton Malletier S.A. v. Haute Diggity Dog, 507 F.3d 252 (4th Cir. 2007)