Remember the Alamo: Federal Trademark Dilution v. Texas Trademark Dilution

Trademark infringement occurs when a third party uses the same mark or a mark similar to a trademark owned by a trademark owner in such a manner that consumers of the products are likely to be confused as to the source of the products.  Generally speaking, a claim of trademark infringement does not exist when the competing products are not the same and are so unrelated that consumers will not be confused as to the source of each product.  That is, unless the mark is famous.

If the mark is famous, then the trademark owner may bring a federal trademark dilution claim against any party using the mark regardless of whether the trademark is being used for similar goods or services.  The rationale behind this theory of recovery is that the use of a famous mark, even if on differnt goods or services, weakens the commercial value of the mark. 

In 2006, Congress passed the Trademark Dilution Revision Act (TDRA) in response to Moseley v. V Secret Catalogue, Inc. in which the Supreme Court held that the plaintiff must prove “actual dilution” rather than “likelihood of dilution.”  Among other things, the TDRA amended the Federal Trademark Dilution Act to change the standard from “actual dilution” to “likelihood of dilution.”  Thus, proof of actual dilution is no longer required to prevail on a federal dilution claim.

To prove a federal dilution claim, a trademark owner must show (1) that the mark is famous, (2) that the mark is distinctive, (3) that the defendant began using a mark after it became famous, and (4) that defendant’s mark is likely to cause blurring or tarnishment of the mark.  Typically, the most difficult element of proof is showing that the mark is truly famous.  Under the TDRA, a mark is famous “if it is widely recognized by the general consuming public of the United States as a designation of source of the goods or services of the mark’s owner.” 

Most Texans, and indeed many people outside of Texas would recognize the longhorn silhouette used by the University of Texas in connection with the university’s athletic programs.  In Board of Regents v. KST Electric, Ltd., the university filed suit against the defendant for using the longhorn silhouette in connection with the logo for its business. 

In response to a motion for summary judgment by the defendant on the university’s federal dilution claim, the university presented evidence of how its football and other sports programs had acquired fame.  The court held that the university had only shown evidence of “niche fame” because evidence of fame among sports fans is not evidence of fame among the general consuming public.  The TDRA was enacted, in part, to get rid of “niche fame” by requiring a mark be “widely recognized by the general consuming public of the United States.”  “One of the major purposes of the TDRA was to restrict dilution causes of action to those few truly famous marks like Budweiser beer.”  Therefore, the court held that the university had not created a genuine issue of material fact as to whether the longhorn silhouette logo is “a household name.”

It is interesting to note that in KST Electric, the defendant did not move for summary judgment on the state dilution claim.  Why the defendant only moved for summary judgment on the federal dilution claim and not the state dilution claim in all likelihood relates to the broader scope of a Texas dilution claim. 

To prove a claim of dilution under Texas law, the trademark owner must show (1) that the mark is distinctive and (2) that defendant is making significant use of a very similar mark in a manner that is likely to cause dilution of the trademark owner’s mark by blurring or tarnishment.  Whether a mark is distinctive is determined by considering  (1) whether the mark is arbitrary, (2) the length of time a user has employed the mark, (3) the scope of the user’s advertising and promotions, (4) the nature and extent of the first user’s business, and (5) the scope of the first user’s reputation. 

Thus, there is no requirement that the mark be famous, and while it may be necessary to show that the mark is a strong mark, it is not necessary to prove that a mark is a household name to prevail on a Texas dilution claim.

By Vincent J. Allen

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