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The Federal Courts' View of the State of Dilution in the States
The Victoria's Secret case raised the hurdle for plaintiffs claiming dilution under the Lanham Act, generally making it much harder to prevail in a federal dilution action. The Supreme Court followed the plain meaning of the statute in interpreting the Federal Trademark Dilution Act (FTDA), 15 U.S.C. '1125(c) [Sec. 43(c) of the Lanham Act] to require a showing of “actual dilution” in Moseley v. V Secret Catalogue, Inc., 537 U.S. 418 (2003) (hereinafter “Victoria's Secret“). The Supreme Court got to this position in part by contrasting 43(c) with the language of state dilution laws, which in many cases do not require actual dilution (and recognize tarnishment, besides). Some state laws can, in theory, help plaintiffs with a dilution claim. This article examines how this is actually playing out.
There are those who still question whether 43(c) has lost its bite, and cite the Victoria's Secret reference to the possibility of proof of actual dilution “through circumstantial evidence ' the obvious case is one where the junior and senior marks are identical.” (Victoria's Secret, 537 U.S. at 434). Sounds good. But at least two courts have viewed this statement as ambiguous. Judge Richard Posner, in Ty Inc. v. Softbelly's, Inc., 69 U.S.P.Q. 2d 1213, 1219 (7th Cir. 2003) said: “The Court did not explain and no one seems to know what that 'circumstantial evidence' might be.” The U.S. District Court for the Southern District of New York found the Supreme Court's statement does not mean that if the marks are identical, that in itself is the circumstantial evidence. Instead, the court interpreted the Victoria's Secret reference to “circumstantial evidence” to mean: Circumstantial evidence of actual dilution, as opposed to direct evidence, is sufficient when the marks are identical. Savin Corp. v. Savin Group, 68 U.S.P.Q. 2d 1893, 1904 (S.D.N.Y. 2003). Since circumstantial evidence is often appropriate, with the question going to its weight, this is a puzzling interpretation. This is another reason the state law may be increasingly attractive to plaintiffs.
Victoria's Secret questioned whether dilution by tarnishment “is actually embraced by the statutory text” of the FTDA. Victoria's Secret, 537 U.S. at 432. Some state dilution laws explicitly permit causes of action for tarnishment and injury to business reputation.
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