Intellectual Property Law

Circuits Split Over Which Trademark Dilution Standard Applies

By Michael Atkins

Let me finish a post I’ve been wanting to write for a few days now. With the Northern District of California’s understandable decision this week in Phase Forward Inc. v. Adams (STL post here) to follow its appellate court’s lead in Jada Toys, Inc. v. Mattel, Inc. (STL post here), I can’t help but face the fact that we have another split in the circuits over trademark dilution — the very thing the Trademark Dilution Revision Act was supposed to avoid.

On the one hand, we have courts in the Second and Fourth Circuits applying a schizophrenic test to determine whether the old standards under the Federal Trademark Dilution Act, or the new standards under the Trademark Dilution Revision Act, apply to cases that were pending on October 6, 2006, the date the TDRA was enacted. (See posts here and here.) This matters a lot because the old standards allowed for niche-market fame but required actual dilution, whereas the new standards require nationwide fame but lower the level of proof to a likelihood of dilution. Courts in the Second and Fourth Circuits appear to apply the TDRA retroactively (meaning the new standard applies) for injunctive relief, but prospectively (meaning the old standard applies) to claims for monetary relief. This poses a practical problem, since almost all dilution plaintiffs seek both types of relief.

That said, courts in the Ninth Circuit apply a completely different test. As Phase Forward recently demonstrated, Ninth Circuit courts appear to ignore the retroactive-prospective approach and instead focus on when the case was filed. Ninth Circuit courts appear to decide cases filed before October 6, 2006, under the old standards and cases filed after that date under the new standards. The cutoff date may be arbitrary, but at least it provides litigants with a bright-line rule.

Fortunately, the circuits’ split should be short lived. Within the next year or so, the remaining cases filed before the TDRA was enacted will settle, be dismissed, or be decided on their merits. Thereafter, there should be little question that the TDRA’s “new” standards will apply.

Until then, dilution jurisprudence remains a confusing mess.

Full post as published by Seattle Trademark Lawyer on February 14, 2008 (boomark / email).