Degrees of Dilution — How Close is Not Close Enough?

On February 8, 2011, the Ninth Circuit joined the Second Circuit in deciding that, under the federal Trademark Dilution Revision Act of 2006 (TDRA), owners of famous trademark do not need to show that an allegedly dilutive mark is "identical," "nearly identical," "substantially similar," or "essentially the same" as the famous mark to demonstrate dilution under the TDRA. Instead, in Levi Strauss & Co. v. Abercrombie & Fitch Trading Co., the Ninth Circuit, like the Second Circuit in Starbucks Corp. v. Wolfe's Borough Coffee, Inc., concluded that its prior precedent requiring that the marks at issue be "identical or nearly identical" does not survive the plain language of Congress's 2006 TDRA, which amended Section 43(c) of the Lanham Act. In Levi Strauss, the Ninth Circuit reversed the district court's decision dismissing Levi's claim that Abercrombie's "dipsy doodle" design dilutes Levi's famous "Arcuate" design. In its decision, the Ninth Circuit intricately traces the origin of its prior "identical or nearly identical" standard back to the Second Circuit's decision in Mead Data Central, Inc. v. Toyota Motor Sales, U.S.A., Inc. Because the 2006 TDRA explicitly sets forth a number of elements that a court may consider in evaluating a dilution claim, of which the similarity of the marks is only one element, the Ninth Circuit held that the district court's application of the incorrect "identical or nearly identical" standard was in error. Moreover, the Ninth Circuit concluded that this error permeated the entire decision, requiring a remand to the district court. At the same time, the Ninth Circuit recognized that some degree of similarity must still be present for dilution to occur. The TDRA requires that a famous mark owner prove an "association arising from the similarity between a mark or trade name and a famous mark." Not surprisingly, the appellate court observed that "[a] sufficiently strong showing of similarity can overcome all other relevant factors," and "greater degrees of similarity manifestly are more likely to support a finding of dilution." Although the Ninth Circuit held "that a particular degree of similarity is not a threshold," it nonetheless recognized that "similarity is the necessary predicate for dilution analysis." Having conclusively retired the requirement that the dilutive mark be "nearly identical" to the famous mark, the Ninth and Second Circuits' recent decisions open a new front at the opposite end of the similarity spectrum: When are marks so dissimilar that there can be no dilution as a matter of law? In Starbucks, the Second Circuit found that the district court did not err in concluding that the disputed marks "were minimally similar to the Starbucks Marks." Yet, "the existence of some — but not substantial — similarity between the subject marks may be sufficient in some cases to demonstrate a likelihood of dilution . . . ." This "minimally similar" standard provides little guidance to courts and gives little comfort to defendants seeking to resolve a dilution claim early in a case. The Ninth Circuit's decision offers little additional guidance: The degree of similarity between the [parties' marks] may be insufficient to support a likelihood of dilution, but that conclusion can come only after consideration of the degree of similarity in light of all other relevant factors and cannot be determined conclusively by application of an "essentially the same" threshold. The federal dilution standards continue to evolve, but they have not become any clearer. – Suzanne Wilson and Brent LaBarge

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