Traditional trademark law protects a trademark owner from infringement when an identical or similar trademark is commercially used in the same industry for same or similar goods and services. This is to prevent consumer confusion with the original trademark.

Trademark dilution is the exception to this standard practice. When a junior mark that is similar to a famous mark is commercially used, even in a different industry, to that of the well known mark, the owner of the famous mark can prevent the registration of the junior mark on the ground that it dilutes the brand of the famous trademark. A claim for dilution may be brought even though no one is likely to be confused, the plaintiff and defendant do not compete with each other and plaintiff has incurred no real economic injury (15 U.S.C. § 1125(c)(1)). This deviates from standard trademark law and has led to several debates on its enforcement.

Dilution occurs either by “blurring” of the famous mark or “tarnishment” of the famous mark. Trademark dilution by blurring is the protection granted to a famous or well known trademark to prevent a junior mark being used for any goods and services on the grounds that it dilutes the strength of the famous mark. For example, the Trademark Trial and Appeal Board of the USPTO in 2011, upheld Nike’s claim that the mark “Just Jesu it” was a dilution of their famous mark “Just do it”.

Dilution by tarnishment on the other hand occurs when the junior mark tarnishes the reputation of the famous mark by adding a negative association to the famous mark such as offering low quality goods or the junior mark is linked with crime, drugs etc. In Daimler Benz Aktiegesellschaft v. Hybo Hindustan AIR 1994 Delhi 239, the Hon’ble judge stated “I think it will be a great perversion of the law relating to Trade Marks and Designs, if a mark of the order of the “Mercedes Benz”, its symbol, a three pointed star, is humbled by indiscriminate colourable imitation by all or anyone; whether they are persons, who make undergarments like the defendant, or anyone else. Such a mark is not up for grabs — not available to any person to apply upon anything or goods”

What constitutes a “well known” or “famous” trademark.

The terms “well known” and “famous” are not specifically defined and it is left up to the registering authority and the Courts to determine which marks may be construed as well known and famous. The criteria for consideration is the duration of time it has been in commercial use, the extent of use, the extent of advertising, distribution and marketing channels and the degree of recognition and popularity of the mark. A trademark owner will be required to submit significant proof of all of the above in a claim of trademark dilution and it will be left up to the discretion of the registering authority and the courts to determine if the trademark as met the required standard. A few well known and famous trademarks are Nike, Pepsi, Coco Cola and Reebok.

Enforcement of trademark dilution laws globally

Enforcing the laws on trademark dilution is different in every country. In India, under Rule 124 of the new Trademark Rules of 2017, a trademark owner through Form TM-M can request that the Registrar declare a trademark as well known. If so declared, the Trademark Registry is required to prevent the registration of an identical or similar mark across the register for any goods and services.

In the United States, it can be enforced through the Federal Trademark Dilution Act 1995 and the Trademark Dilution Revision Act (TDRA) 2006. The TDRA further lowered the standard by permitting a showing of a mere “likely” to cause confusion to establish trademark dilution as opposed to “actual” confusion. In addition, approximately 40 states in the United States have their own dilution laws.

Australian trademark law does not recognize “dilution per se but allows trademark owners to oppose a third party registration even if their own famous mark is not registered. Canada is similar in that it does not use the term “dilution” but recognizes “depreciation of goodwill” which gives trademark owners the opportunity to bring an action against another that depreciates its brand.

The EU protects “marks with reputation”. South Africa protects “marks that are well known in the Republic”. The TRIPS agreement requires WTO states to enhance protection for well known marks as do other treaties but they do not expressly refer to “dilution” or clearly defines “well known marks”.

As such, the negative propaganda surrounding the protection of famous and well known marks have increased due to the anticompetitive implications of such protection. The logic is that by such laws, famous marks are being granted monopoly absent actual economic injury. The lack of clarity in what constitutes “famous marks” and “well known marks” in international law and a Court’s discretionary powers may result blurring the lines by unintentionally granting copyright protection to a trademark. All of these calls for the reformation of trademark dilution laws to bring some clarity and uniformity in India and on an international level.

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