CASE SUMMARIES UNDER THE TRADEMARK DILUTION REVISION ACT (2008)

Transcription

1 CASE SUMMARIES UNDER THE TRADEMARK DILUTION REVISION ACT (2008) During the committee term, the Dilution Committee: North America Subcommittee summarized caselaw as part of its committee objectives. This work was done as part of INTA s policy initiatives. This report summarizes cases decided in 2008 under the Trademark Dilution Revision Act. While its goal is to be broadly inclusive of cases that involved the TDRA, cases decided on procedural grounds or lacking significant discussion of the TDRA may not have been included. All information provided by the International Trademark Association in this document is provided to the public as a source of general information on trademark and related intellectual property issues. In legal matters, no publication whether in written or electronic form can take the place of professional advice given with full knowledge of the specific circumstances of each case and proficiency in the laws of the relevant country. While efforts have been made to ensure the accuracy of the information in this document, it should not be treated as a basis for formulating business decisions without professional advice. We emphasize that trademark and related intellectual property laws vary from country to country, and between jurisdictions within some countries. The information included in this document will not be relevant or accurate for all countries or states. FIRST CIRCUIT: No cases to report. SECOND CIRCUIT Audi AG v. Shokan Coachworks, Inc., 2008 U.S. Dist. LEXIS (N.D.N.Y. November 12, 2008) Second Plaintiffs, Audi AG and Volkswagen of America, Inc., brought suit against Defendants, an Audi vehicle recycling facility located in West Shokan, New York and its owner for Defendant s alleged improper use of various AUDI marks in connection with Defendants business. Defendants, who had been in business for over 25 years, only sells parts for AUDI vehicles. The alleged misuse included: (1) registering the domain name 800allaudi.com; (2) displaying the AUDI marks on the 800allaudi.com website; (3) using the vanity phone number 800-ALL-AUDI; (4) using advertisements like Audi Used Parts or Used Audi Parts ; (5) answering the telephone with the phrase all Audi ; (6) using the signature block Shokan Audi Parts on s; (7) using allaudi.shokan@verizon.net as an address; and (8) using on sign on defendant s business that read Audi Parts Warehouse. The parties had settled an earlier dispute in One of the claims at issue was federal trade dress and trademark dilution in violation of 15 U.S.C. 1114(c).

2 The court considered the parties cross-motions for summary judgment on all claims, including the dilution claim. Disposition: As an initial matter, the court addressed the question of whether the claims should be analyzed under the FTDA or the TDRA because the claims were filed prior to the effective date of the TDRA. Following the prior cases from the Second Circuit, the court held that the claim would be analyzed under the TDRA because the plaintiff only sought summary judgment as to liability and injunctive relief. The court noted that to the extent that Audi ultimately sought damages, the claims would have to be considered under the FTDA standard. The court proceeded to follow FTDA precedent from the case Savin Corp. v. Savin Group, 391 F.3d 439, 451 (2d Cir. 2004) from which the court gleaned that Once a court determines that the famous element is satisfied, actual dilution may be presumed where the mark used is identical to the plaintiff s trademark. Citing Savin at The court began its analysis by considering whether the AUDI Marks are famous under the TDRA. The court found the AUDI Marks famous based on Audi s unchallenged evidence of international advertising expenditures, sales total, geographic scope of sales, and the length of time for the AUDI registrations. After finding the AUDI Marks famous, the court proceeded to consider the actual dilution element. Here, the court relied on Savin to conclude that: The law clearly provides for a presumption of actual dilution where, as here, the marks used by Defendants are identical to Plaintiffs marks. Therefore, the court finds as a matter of law that Plaintiffs have established the actual dilution element of their trademark dilution claim, and Defendants other arguments regarding dilution, actual or likely, need not be addressed. However, the court found that questions of fact concerning the Defendants use in commerce of the Audi Marks in certain of the categories set forth above. The Court granted summary judgment in favor of Plaintiff only for Defendants use of the address allaudi.shokan@verizon.net and use of Shokan Audi Parts in the signature block for s. In addition, the court granted Plaintiff summary judgment for Defendants use of the AUDI Ring Logo on Defendants website despite questions of fact concerning the length of time the logo had appeared on the website and whether Defendants intended the logo to be placed on the website. The court held: Because a claim for injunctive relief on a trademark dilution claim under the Lanham Act does not require willful intent, however, the question of Defendants intent in placing the Logo on their website does not prevent summary judgment on Plaintiff s dilution claim for injunctive relief, which is the only relief Plaintiffs seek on their

3 pending motion. Accordingly, Plaintiffs motion for summary judgment is granted... solely as to the claim for injunctive relief on Plaintiffs trademark dilution claim.... Bottom Line: The court s analysis of the dilution claims conflated the FTDA and the TDRA. The court relied on the Savin analysis and standards to find actual dilution, despite stating that the only relief sought in Plaintiffs summary judgment motion was injunctive relief which should have triggered analysis under the TDRA. Summary Judgment, Retroactivity of TDRA, Standards Starbucks Corp. v. Wolfe s Borough Coffee, Inc. 559 F. Supp. 2d 472 (S.D.N.Y. June 5, 2008) Second After trial, the district court found in favor of defendant on claims under New York state and federal dilution statutes. On appeal, in light of the enactment of the TDRA, the Second Circuit vacated the earlier judgment and remanded the case for further proceedings. The court reconsidered Plaintiff s claim for injunctive relief in light of the TDRA s amendment to the FTDA which changed the standard from actual dilution to likelihood of dilution. Disposition: The court analyzed each of the six factors set forth in the TDRA and held that Plaintiff did not prove a likelihood of dilution of the Starbucks marks by Defendant s use of the Mr. Charbucks and Mister Charbucks marks. The court held that the similarity of marks factor weighed heavily in favor of defendant because in order to establish dilution by blurring, the two marks must not only be similar, they must be very or substantially similar. Based on this standard, the court found the marks at issue were not substantially similar. The court found that based on this factor alone, the defendant should be entitled to win. The court analyzed the remaining factors and found that the following factors weighed in favor of Starbucks: (1) distinctiveness of the mark; (2) Substantially exclusive use of the mark by the owner; and (3) degree of recognition of the famous mark. The court also noted that the survey results provided by Starbucks were insufficient to make the factor Actual Association with the Famous Mark weigh in Starbucks favor to any significant degree. The court held that the final factor, Intent to create an association with the famous mark weighed in favor of the defendant. The court held that: the record makes clear that the distinctiveness of the character of Starbucks coffee products is key to the achievement of Defendant s stated

4 goal, which is to signal to purchasers that Mr. Charbucks is a very dark roast and unlike Defendant's other coffee products. Such an intended association, especially where, as here, Defendant s mark is not substantially similar to Plaintiff s, is not indicative of bad faith or of an association likely to cause dilution by blurring. The court also considered the dilution by tarnishment claim, but held that the survey evidence relied upon by Starbucks was unclear as to the ultimate proposition of whether the use of the Mr. Charbucks or Mister Charbucks marks is not necessarily going to create a negative association with the Starbucks. The court noted that the overall good quality of the coffee products offered under the defendant s marks was also a factor in finding that there is no likelihood of dilution by tarnishment. Bottom Line: No likelihood of dilution by blurring when the marks are not substantially similar or identical and when the marks are intended to recall the famous mark without implying that the goods offered by the defendant are the goods offered under the famous mark. Blurring, Parody, Tarnishment, Evidence Tiffany, Inc. v. EBay, Inc., 2008 U.S. Dist. LEXIS (S.D.N.Y. July 14, 2008) Second Circuit Tiffany, the famous jeweler with the coveted blue boxes brought an action against ebay, the on-line retail auction site for, inter alia, trademark dilution and contributory trademark dilution. Tiffany s claims concerned the sale of counterfeit Tiffany products by third-parties on the ebay website. Disposition: After a bench trial on the merits, the court held that ebay was not liable under direct or contributory trademark dilution. As an initial matter, the court held that the Tiffany s claims to the extent that they sought injunctive relief would be analyzed under the TDRA rather than the FTDA which was the applicable statute when Tiffany brought the claims. The court did also find that to the extent that Tiffany sought monetary damages, the claims would be analyzed under the version of the act that was in place at the time the alleged damages were suffered. As a result, Tiffany would have to prove actual dilution under the FTDA in order to recover damages allegedly suffered prior to the enactment of the TDRA on October 6, 2006.

5 The Court concluded that Tiffany had failed to prove that ebay was liable for trademark dilution and that even if Tiffany could have proved that ebay could be liable for dilution, ebay s use of the TIFFANY Marks was a protected, nominative fair use. The Court held that both claims by Tiffany, dilution by blurring and dilution by tarnishment, failed because ebay never used the TIFFANY Marks to refer to ebay s own product and that while ebay had used the TIFFANY Marks in promotional efforts and in advertising, the TIFFANY Marks had always been associated with products that individual third party sellers characterized as Tiffany items. The court held that ebay's use of the TIFFANY Marks falls into the antidilution statute s nominative fair use exception because: (1) ebay's use of the TIFFANY Marks was only a promotional use; (2) ebay's use of the TIFFANY Marks did not designate the source for ebay s goods; but instead, it simply indicated that products bearing the TIFFANY Mark were available through ebay; and (3) ebay s use of the TIFFANY Marks was in connection with advertising of the availability of products through the ebay website which allows consumers to compare prices and the availability of specific Tiffany designs. Accordingly, the Court found that even if Tiffany had made out a viable claim for trademark dilution, it would have been barred by the nominative fair use exception recognized in the anti-dilution statute. Finally, the court noted that contributory dilution has not been recognized in the Second Circuit Court of Appeals and that even the one district court in the circuit that mentioned the doctrine acknowledged that it is somewhat novel. Without addressing the viability of contributory dilution claims in general, the court held that Tiffany s claim would fail for the reasons addressed above and the same facts that caused the failure of Tiffany s contributory infringement claims. Bottom Line: Dilution claims will not prevail where the trademark is used simply to advertise genuine (or presumably genuine) articles due to the nominative fair use defense in the TDRA. Fair use, Retroactivity of TDRA, Standards Oleg Cassini, Inc. v. Weber s 32 nd St. Corp., 2008 U.S. Dist. LEXIS (S.D.N.Y. July 16, 2008) Second Circuit OCI is the owner of federal trademark registrations for Oleg Cassini and Cassini that are used in connection with the sale of a variety of products, including men s and woman s apparel. Weber operates stores selling offprice and discount merchandise, and in April 2007, sold shirts bearing the

6 Cassini trademark at substantially discounted prices. Weber has never been licensed or authorized to sell merchandise under Cassini s name. Disposition: Plaintiff sought a permanent injunction prohibiting Weber s further sale of its merchandise and asserted that Weber s unauthorized sales have diluted the value of OCI s trademarks. The parties do not dispute that there could be no claim for trademark infringement or unfair competition where the goods being sold are genuine goods bearing a true mark. See, e.g., Polymer Technology Corp. v. Mimran, 37 F.3d 74, 78 (2 nd Cir. 2007). OCI also did not dispute Weber s contention that under such circumstances there can be no claim for dilution. While the allegations set fourth in the complaint were sufficient to support an inference that Weber s was selling counterfeit Cassini merchandise and Weber s motion to dismiss OCI s complaint was DENIED. OCI was permitted to go forward only with the claim arising out of the sale of counterfeit goods without an amendment to the complaint. Bottom Line: There can be no claim for dilution where the goods being sold are genuine goods bearing a true mark. Motion to Dismiss, Genuine Goods Bearing True Mark The Argus Research Group, Inc. v. Argus Media, Inc., 562 F.Supp.2d 260 (D. Conn. June 3, 2008) Second Circuit Plaintiff publisher provides independent investment research for institutions and brokerage firms while Defendant publisher s materials relate to the energy field in some way. While plaintiff publisher also reports on the energy industry, its focus is on investment analysis and advice whereas defendant publisher traditionally focuses on commodities pricing and developments in energy markets. Both publishers refer to their publications as Argus, and plaintiff publisher trademarked the term ARGUS for use in connection with investment analysis and securities portfolio management services; and broad economic research services of particular interest to the business and investment community. Argus Research, plaintiff, claimed that Argus Media, defendant, changed its business by marketing more aggressively to hedge funds and investment banks and by altering the content of its publications to focus more on stock prices and other investment-related information. Argus

7 Research also claimed that a settlement agreement prevented defendant from adopting ARGUS or ARGUS MEDIA as trademarks. Disposition: On plaintiff s trademark dilution claim under 43(c), defendant argued that Argus Research s brand is insufficiently famous. The court cited the Trademark Dilution Revision Act of 2006 and noted that plaintiff must demonstrate that its ARGUS mark is widely recognized by the general consuming public, 15 U.S.C. 1125(c)(2)(A), and was famous in this sense prior to defendant s use of the ARGUS and ARGUS MEDIA marks in As the statute denies protection against dilution to owners of marks that are famous only in niche markets or to marks that were already in use before the plaintiff s mark became famous and the Second Circuit, in Savin Corp v. Savin Group, 391 F.3d 439, also established a stringent standard for dilution claims, i.e. that the plaintiff show that the senior mark possesses both a significant degree of inherent distinctiveness and, to qualify as famous, a high degree of acquired distinctiveness, the court questioned whether plaintiff could offer sufficient evidence to permit a reasonable jury to conclude that its mark qualifies for dilution protection. However, in an abundance of caution, the court denied defendant s summary judgment motion with respect to fame in order to permit plaintiff to submit additional evidence at trial. Bottom Line: Plaintiff must be able to prove that their mark is meets the fame standard set fourth both by statute and common law before a court will afford the owner the protections of the TDRA. Summary Judgment, Fame Louis Vuitton v. Dooney & Bourke Inc., 561 F. Supp. 2d 368 (S.D.N.Y. 2008) Second Circuit Plaintiff claims that defendant introduced a line of handbags bearing designs that infringe upon and dilute Louis Vuitton s trademark rights. In its Fall 2003 line, plaintiff introduced handbags bearing a new design (its registered Toile Monogram trademark in 33 colors arranged on a black or white background). Due to strong interest in the design, the line became a permanent part of Louis Vuitton s collection. In 2003 Dooney & Burke introduced its It Bag line of handbags, small leather goods, and accessories, which featured the DB monogram in nine different colors on a white background or DB written in seven colors on a black background.

8 Disposition: The court granted defendant s motion of summary judgment in its entirety. Louis Vuitton s Monogram Multicolored mark was held sufficiently famous by the Court and, as demonstrated by the evidence. However, although the evidence also demonstrated that a number of customers mentally associated the plaintiff s products bearing the Monogram Multicolore mark with Dooney & Bourke s It Bags, there was no evidence that any lessening of the capacity of the Monogram Multicolore mark to identify and distinguish the goods or services offered by Louis Vuitton. In fact, Louis Vuitton s reputation and standing in the handbag industry actually increased despite the introduction of the successful It Bag since Bottom Line: In addition to fame, a plaintiff must demonstrate the existence of actual dilution, although it need not prove actual loss of sales or profits. Mental associations between two similar but not identical marks will not necessarily reduce the capacity of the famous mark to identify the goods of its owner. Summary Judgment, Actual Dilution GMA Accessories, Inc. v. Croscill, Inc. et al., 06 Civ (GEL), 2008 U.S. Dist. LEXIS (S.D.N.Y. March 3, 2008). Second Plaintiff, a manufacturer of women s fashion items, sued Croscill, a manufacturer of window, bedding and bathroom products, and retailers Linens n Things, Bed Bath & Beyond, and Burlington Coat Factory for trademark infringement and dilution relating to the use of the trademark CHARLOTTE. Plaintiff claimed prior rights in the mark for certain clothing and accessories such as scarves, gloves, socks, handbags, hats, hair clips and sunglasses. On the TDRA claim, despite numerous examples of promotional activity, plaintiff was unable to quantify its advertising expenditures beyond $17,000 for the entire life of the CHARLOTTE mark. A national competitor s sales of clothing under the mark CHARLOTTE RUSSE significantly undercut Plaintiff s claim of strength, as did the existence of 100 other registrations for CHARLOTTE marks. Defendants moved for summary judgment on all claims. Disposition: The court dismissed Plaintiff s TDRA claim because of patently insufficient evidence of fame. CHARLOTTE did not begin to approach the level of famous marks DUPONT, BUICK or KODAK.

9 Bottom Line: A plaintiff must be able to show substantial and quantifiable advertising expenditures, as well as consumer recognition, to establish fame under TDRA. Fame, Summary Judgment THIRD CIRCUIT: No cases to report. FOURTH CIRCUIT American Mensa, Ltd. v. Inpharmatica, Ltd., 2008 U.S. Dist. LEXIS (D. Md. November 6, 2008) Fourth Mensa is a non-profit organization whose primary purpose is to provide services and goods to its members, known as Mensans (individuals who have scored in the top two percent of the general population on intelligence tests). Mensa administers intelligence tests, encourages and publishes research on intelligence, grants scholarships, and publishes research under the MENSA trademark. The defendant Inpharmatica applied to register the mark ADMENSA to be used in the U.S. for drug research, notably in pharmacokinetic and ADME (adsorption, distribution, metabolism, elimination) analysis, modeling properties in silico, and computer-aided molecular design and compound selection. Mensa opposed the application for ADMENSA and discovered during the opposition proceeding that Inpharmatica had begun using the ADMENSA mark in the U.S. Mensa sued Inpharmatica for, inter alia, federal trademark infringement and dilution. Inpharmatica moved for summary judgment on both claims. The court granted summary judgment on the dilution claim, but denied summary judgment on the infringement claim. Disposition: The court focused its analysis on whether the MENSA mark qualified as a famous mark under the more rigorous TDRA standard. Ultimately, the court found that the TDRA significantly increased the difficulty of proving a dilution claim by requiring a mark to be famous to the general public and [u]nless a mark is a household name whose fame is not at all in doubt, it cannot support a dilution claim. The court analyzed four factors to determine whether the MENSA mark qualified as a famous mark entitled to protection under the TDRA. The Court considered: (1) the scope and geographic reach of advertising and publicity of the mark; (2) the volume and geographic reach of sales of goods or services offered under the mark; (3) actual recognition of the mark; and (4) where the mark is registered. After noting the low level of advertising and sales revenue for MENSA, the court addressed the recognition survey proffered by MENSA. Mensa s expert s study revealed that 59 percent of respondents had heard the term

10 mensa before. But, the court noted: That 59 percent of respondents had heard of Mensa does not answer the inquiry. The TDRA states that a mark is famous if it is recognized by the public as a designation of source of the goods or services of the mark s owner. 1125(c)(2)(A). Thus, the relevant question is how many respondents identified the Mensa Mark as representing the goods and services that Mensa actually provides. The survey respondents only significant association of the Mensa Mark was to denote intelligence, and a high IQ group. As a result, the court found that the results of this survey failed to demonstrate the type of recognition and the volume of recognition (which the court sets at approximately 75%) required to prove fame under the TDRA. In light of the evidence that although Mensa had been mentioned in the media, it had spent little money on advertising and received little revenue, the court held that [MENSA] is not a household name like those marks that have earned dilution protection, such as Hershey s, Nike, Visa, and American Express. Bottom Line: No likelihood of dilution by blurring when the mark at issue does not rise to the level of a household name. Fame Evidence and Requirements FIFTH CIRCUIT Board of Regents v. KST Electric, Ltd., 2008 WL (W.D. Tex. Feb. 5, 2008) Fifth University of Texas ( UT ) sued KST Electric ( KST ) alleging (among other claims) dilution of its longhorn steer silhouette logo, which had been registered for 20 years. KST adopted a logo with a longhorn silhouette with a K on its left cheek, the letter S on its right cheek, and a T - like lightning bolt in the center, with the words ELECTRIC, LTD. between the horns in KST sought summary judgment on UT s trademark claims. The motion for summary judgment as to the dilution claim dealt only with the issue of whether UT s mark was famous, and the court analyzed only that discrete issue, further focusing on actual recognition of the mark. KST s flawed survey, indicating that only 5.8% of U.S. respondents associated the UT Longhorn logo with UT alone, was insufficient to demonstrate that the logo was not famous; however, the burden of proof required UT to submit sufficient evidence of a triable issue that the logo was famous under the TDRA. Evidence that the UT logo was prominently featured during regular (and sometimes record-

11 setting) broadcasts of UT sporting events, UT s record-setting licensing royalties, and the football program s rank as the second most valuable in the country was sufficient only to prove niche fame, rather than fame among the general consuming public. Disposition: The magistrate court recommended that KST s motion for summary judgment on UT s dilution claim be granted. Bottom Line: Niche fame is explicitly excluded from the TDRA; hence, brand owners must provide evidence of fame among the general consuming public, rather than nationwide consumers interested in a particular field. Niche fame, survey evidence SIXTH CIRCUIT The Hershey Company v. Art Van Furniture Inc., 2008 U.S. Dist. Lexis (E.D. Mich. Oct. 24, 2008) The Defendant Art Van Furniture launched an advertising campaign on its website asking visitors vote for their favorite design for a fleet of new delivery trucks. One such design (which was alleged to be used on at least one truck) is called the couch bar design (below). Plaintiff, Hershey, filed a complaint claiming trademark infringement and dilution by blurring and asked for a TRO based upon its trademarks and registered and unregistered trade dress. Hershey claimed that its trademark and trade dress include: 1) A rectangular design 2) Silvery stylized lettering 3) A brownish-maroonish colored wrapper 4) The name Hershey s

12 5) Silver foil protruding from under the wrapper Disposition: The District Court found that under the likelihood of confusion factors, Hershey was unlikely to succeed on the merits of its trademark and trade dress infringement claims. However, the Court found that Hershey was likely to succeed on its claim for dilution by blurring. In analyzing Hershey s dilution claims under the TDRA the District Court found that 1) The Hershey trademark/trade dress is famous and distinctive; Hershey is one of the largest producers of chocolate in the marketplace and spends tens of millions of dollars on advertising; 2) Defendant uses the couch bar design in commerce by posting the design online to let consumers vote on it and the intended usage was for delivery trucks to advertise in commerce 3) Defendant began usage of its advertising campaign long after the Hershey mark became famous; 4) usage of the couch bar by Defendant is likely to create an association with Hershey s famous mark. Defendant argued that the couch bar design was simply parody, but the Court summarily rejected this defense by finding that the Defendant s design is neither similar nor different enough to convey a satirical message. The court also stated that the couch bar design may be funny, but it is not biting. Bottom Line: The Court granted a TRO enjoining Defendant from using the couch bar design on its website and Defendant represented that the design would not be used on its trucks. Blurring, Parody, Temporary Restraining Orders V. Secret Catalogue Inc. v. Moseley 558 F.Supp.2d 734 (W.D.Ky. May 21, 2008)

13 Sixth Circuit Victor and Cathy Moseley owned an adult entertainment store in Elizabethtown, Kentucky called Victor s Secret and then Victor s Little Secret that sold lingerie, pagers, and adult novelties. Prior to filing this lawsuit, counsel for Victoria s Secret wrote to the Moseleys requesting that they discontinue using of the name Victor s Secret or any variations thereof. At that time, the Moseleys changed the name of the store to Victor s Little Secret which prompted Victoria s Secret to file this lawsuit. Victoria s Secret brought suit in 2003 for, inter alia, trademark infringement and trademark dilution under the then-existing Federal Trademark Dilution Act. The district court granted summary judgment to Victoria s Secret on the FTDA claim on the grounds that Victor s Secret and Victor s Little Secret had a tarnishing effect on Victoria s Secret and enjoined the Moseley s from using the marks. The Moseleys appealed the case to the Sixth Circuit. The Sixth Circuit held that actual dilution need not have occurred to satisfy the FTDA and affirmed the District Court s decision. The Moseleys appealed the Sixth Circuit s decision to the United States Supreme Court. The Supreme Court granted certiorari and reversed the Sixth Circuit s decision by holding that the FTDA required a showing of actual dilution rather than likelihood of dilution and remanded the case to the Sixth Circuit In 2006, after Congress passed the TDRA, the Sixth Circuit remanded the case to the District Court. Disposition: The District Court held that even though the TDRA was enacted after the case was originally filed, the standards set forth in the TDRA applied to the pending dilution claim because Victoria s Secret was seeking only prospective injunctive relief (as Victoria s Secret previous claim for monetary relief had been withdrawn). In analyzing Victoria s Secret s dilution claims under the TDRA the District Court found that the Victoria s Secret mark is famous and distinctive. In discussing the factors for dilution by blurring, the court found that (1) the marks Victoria s Secret and Victor s Secret were substantially similar; (2) that the mark Victoria s Secret is distinctive, as the Sixth Circuit previously found; (3) Victoria s Secret had substantial use of the mark; (4) Victor s Secret had intent to associate with the Victoria s Secret mark; and (5) that there was sufficient evidence of actual association between the Victoria s Secret and Victor s Secret marks. Despite these findings, the court concluded that the distinctiveness of the

14 Victoria s Secret mark was not blurred merely by showing that a consumer would make a mental association of the Victor s Secret mark with Victoria s Secret. The District Court went on to find that Victoria s Secret had shown that the Victor s Secret mark was likely to cause dilution by tarnishment. Specifically, the Court found that Victoria s Secret avoids sexually explicit goods but instead cultivates a sexy and playful image. As such, a consumer s association of Victoria s Secret with Victor s Secret tarnishes the Victoria s Secret mark because Victoria s Secret would be associated with a purveyor of sex toys and adult videos. The Court ultimately granted summary judgment to Victoria s Secret on the basis of dilution by tarnishment and permanently enjoined the Moseley s from using Victor s Secret and Victor s Little Secret. Bottom Line: Mere association of a junior mark with a famous mark is not sufficient to show that there is a likelihood of dilution by blurring. Tarnishment can be shown when there is an association between a junior mark and a famous mark such and such association harms the reputation of the famous mark. Tarnishment, Blurring, Summary judgment SEVENTH CIRCUIT: No cases to report. EIGHTH CIRCUIT Anheuser-Busch, Inc. v. VIP Products, LLC, No. 08 Civ. 0358, 2008 U.S. Dist. LEXIS (E.D.Mo. Oct. 16, 2008). 8th Circuit Plaintiff Anheuser-Busch, Inc. ( Plaintiff ) owns the registered trademark BUDWEISER as well as a registered trademark on the label of its Budweiser beer products (the Budweiser Marks ). Both of the Budweiser Marks have been in use since Plaintiff sold approximately $3 billion in beer bearing the Budweiser Marks to wholesalers from , and spent $156 million on advertising in the U.S. on beer products bearing the Budweiser Marks in Plaintiff also sells non-beer items bearing the BUDWEISER word mark and/or the trademarked label, including dog leashes, dog collars, and dog beds. Plaintiff has received $147,500 from sales of dog-related items bearing Plaintiff s Budweiser marks since Plaintiff is very selective in choosing licensees. Plaintiff polices the use of its marks and its licensees are contractually obligated to report all infringing or similar uses they uncover.

15 Defendant VIP Products, LLC ( Defendant ) creates, manufactures and sells high quality, durable dog toys, including a squeeze toy called the Buttwiper that retails in a two-pack for $20. The Buttwiper was designed from an instruction to make a knock-off of a beer bottle label for Budweiser/Buttwiper. Defendant has manufactured 11,500 Buttwiper products, totaling $67,000 in gross revenue and $29,000 in profit. Plaintiff hired an expert to conduct a survey to determine whether Defendant s Buttwiper product is likely to cause confusion with Plaintiff s Budweiser products. Survey participants were interviewed at 9 shopping malls across the country and were over 21 years of age, likely to purchase a dog toy within the next 6 weeks, and not employed by any entity likely to profit from pet toy products. Survey was double blind, and the 327 interviewees were instructed not to guess. They were shown the test product or a control product, allowed to view the items as long as they liked, and asked questions afterwards including what company or companies do you think makes or puts out the product you just saw? Whether or not you know the name of the company that makes or puts out the product you just saw, do you think that company puts out any other products or brands? and Do you think that the product that you just saw is or is not made or put out with the approval or sponsorship of any other company or brand? The survey found a 30% confusion rate among respondents. Plaintiff sought a preliminary injunction on Missouri and federal trademark infringement, unfair competition, and dilution claims. The parties consented to appearing before a Magistrate judge. Disposition: Preliminary injunction granted on Plaintiff s trademark infringement and unfair competition claims, but denied on federal and state dilution claims Bottom Line: Court held that Defendant s products were infringing but not diluting 8 th Circuit infringement standard: Plaintiff must prove that its trade dress (1) is inherently distinctive or [has] acquired distinctiveness through secondary meaning; (2) [is] non functional; and (3) its imitation would result in a likelihood of confusion in consumers minds as to the source of the product. The Budweiser Marks were stipulated to be strong, and the Court found that the marks and trade dress were nonfunctional because they were arbitrary embellishment primarily adopted for purposes of identification and individuality The only likelihood of confusion factors at issue were degree of care reasonably expected of potential customers and evidence of actual

16 confusion. Defendant challenged the applicability of the survey to both factors. Degree of care: The Court held that because the survey respondents had unlimited time to view the test product or control product, and because the $10 Buttwiper dog toy was not a high end or expensive product, the survey appropriately replicated the degree of care that a consumer would take. Actual confusion: Defendant argued that the survey is deficient because the Buttwiper is on the high-end of the cost of dog squeeze toys, but the survey did not include cost as a factor. The Court found that the universe of the survey was proper and that the actual cost of $10 per toy was unlikely to be significant. Defendant also argued that the survey should not have excluded persons between 18 and 21 years of age. The Court noted that Defendant offered no survey of its own, and accepted Plaintiff s argument that the exclusion had no effect on survey results because persons aged 18 to 21 are a very small segment of the population. The Court found evidence of actual confusion. The court distinguished parody cases including Louis Vuitton Malletier S.A. v. Haute Diggity Dog, LLC, and Tommy Hilfiger Licensing, Inc. v. Nature Labs, LLC, on the grounds that neither of the plaintiffs in both of those cases sold competing items similar in cost, and that the plaintiffs were unable to establish likelihood of confusion in either case. The court found that Plaintiff had established a threat of irreparable harm, and that the balance of harm favored Plaintiff. It also found that a preliminary injunction would be in the public interest. After noting that the fame and priority of the Plaintiff s Budweiser Marks were both undisputed, the Court held that the Buttwiper dog toy did not dilute the Budweiser Marks by blurring or tarnishment. In finding that there was no dilution by blurring, the court stated that Proof of actual dilution... is required, quoting Everest Capital Ltd. v. Everest Funds Mgmt., LLC, a 2005 Eighth Circuit decision, and held that Plaintiff had not provided evidence that consumers would change their impression of the Budweiser marks based on an association with Buttwiper. The court also found that Plaintiff presented no evidence that Buttwiper has harmed the reputation of Budweiser and therefore rejected Plaintiff s dilution by tarnishment claim. In considering the Missouri law dilution claim, the Court found that there was no likelihood of dilution, but did not analyze whether a likelihood existed. Instead, it adopted its analysis used for the federal claims.

17 Dilution, Survey Evidence, Parody NINTH CIRCUIT Visa International Service Association v. JSL Corporation, Case No., 590 F. Supp. 2d 1306 (D. Nevada December 15, 2008) Ninth On October 22, 2002, the district court granted partial summary judgment in favor of Plaintiff, Visa, on its trademark dilution claim, finding that Visa showed as a matter of law that Defendant, JSL s use of the mark EVISA in an Internet domain and website and for services related to travel, foreign language, and multilingualism diluted Visa s VISA mark. JSL appealed and on January 16, 2004, the Ninth Circuit remanded the case in light of the U.S. Supreme Court s 2003 decision in Mosley v. V Secret Catalog, Inc. which set forth an actual dilution standard for federal trademark dilution claims. The TDRA became effective on October 6, 2006, changing the standard for a federal dilution case to a likelihood of dilution standard. On December 27, 2007, the district court again granted summary judgment to Visa on its trademark dilution claim under the actual dilution standard of the FTDA. The district court did not apply the TDRA s likelihood of dilution standard because Jada Toys, Inc. v. Mattel, Inc. 496 F.3d 974 (9 th Cir. 2007) applied the FDTA to a case filed before the TDRA was enacted in On February 1, 2008, Visa filed a motion for relief from final judgment based on the district court s mistake in applying the FTDA rather than the TDRA. On February 21, 2008, the Ninth Circuit amended its opinion in Jada Toys, applying the TDRA to a trademark dilution claim even through the plaintiff filed the suit before the TDRA was enacted. On February 28, 2008, the district court informed the Ninth Circuit that it wished to entertain Visa s motion for relief from a final judgment in light of the amended opinion in Jada Toys and the Ninth Circuit agreed, remanding the case to the district court to consider the motion. Disposition: The district court found that Visa is entitled to judgment as a matter of law on its trademark dilution claim, and enjoined JSL from using or registering the EVISA mark and from using the <evisa.com domain name. The district court applied the law of the case doctrine to the commercial use and defendant s prior use elements of the Ninth Circuit TDRA dilution test, adopting its prior findings because the TDRA did not change the law on these elements. The district court also dismissed JSL s trademark infringement counterclaim against Visa under the law of the case doctrine. Bottom Line: The district court analyzed the dilution claims under the four-prong test set forth by the Ninth Circuit in the Jada Toys case: (1) the mark is famous and distinctive; (2) the defendant is making use of the mark in commerce;

18 (3) the defendant s use began after the mark became famous; and (4) the defendant s use of the mark is likely to cause dilution by blurring or dilution by tarnishment. On the fame element, the court found that all four factors in the TDRA weighed in favor of a finding that the VISA mark is famous. Visa provided evidence that it has used its VISA mark for over 25 years, spent more than $1billion on advertising during the years 1997 through 2000, used the mark in all 50 states, in more than 300 countries, and on the Internet, VISA cards were used in $1.3 trillion of sales in the U.S. during the year 2006 and are accepted at more than 6.3 million locations in the U.S., and Visa owns approximately 56 federal trademark registrations containing the mark VISA. On the actual recognition factor, Visa submitted a survey from Dr. Itamar Simonson finding that 99% of respondents taken from a sample covering the entire U.S. were aware of the VISA brand of payment cards, and that 85% of respondents identified VISA when asked to name a brand of payment card that can be used at more than one merchant. The district court rejected JSL s challenge to Dr. Simonson s survey, finding that the relevance of the survey was not affected by the TDRA s change to trademark dilution law. The district court also found that the VISA mark is an arbitrary mark that is inherently distinctive as a matter of law. On the second Jada Toys element, the district court found that JSL used the VISA mark in commerce by virtue of its use of EVISA that simply added the generic descriptor E to Visa s VISA mark. On the third Jada Toys element, the district court applied the law of the case doctrine and adopted its earlier finding that JSL s use began after the VISA mark became famous, finding that the defendant s use element is virtually identical under the FTDA and the TDRA. On the fourth Jada Toys element, the district court analyzed the six nonexclusive factors for determining likelihood of dilution under the TDRA. The district court found that the first factor, degree of similarity, weighed in favor of Visa because EVISA and VISA are very similar and the letter E typically denotes an online version of a business and did not distinguish the marks. On the second and fourth factor, degree of inherent or acquired distinctiveness and degree of recognition, the district court found that while a visa could mean an endorsement on a passport, the VISA trademark nevertheless has a moderately high level of inherent distinctiveness and that the VISA mark has a very high degree of recognition. The district court found that the third factor, substantially exclusive use, did not weigh for or against JSL because Visa did not show an absence of a genuine issue of material fact in its summary judgment motion. The district court found that the fifth factor, defendant s intent to create association, favors defendant, but the actual association factor is more important than the defendant s intent. On the sixth factor, actual association, Visa submitted a survey from Dr. Edward Blair showing that 73% of survey respondents mentioned VISA when asked whether EVISA

19 reminded them of another brand name. JSL challenged the survey methodology and universe, but the district court rejected these arguments. Retroactivity, Fame, Summary Judgment, Survey Evidence Vallavista Corporation v. Amazon.com, Inc. et al, Case No. C WHA, 2008 WL , 2008 U.S. Dist. LEXIS (N.D. Cal, December 11, 2008) Ninth Plaintiff Vallavista brought a lawsuit against Amazon.com, Target, and other parties alleging trademark infringement, dilution, and unfair competition based on its trademark TAXI WALLET for wallets. Target moved for summary judgment on all claims, or in the alternative, for summary adjudication that Vallavista is not entitled to damages. Disposition: The district court granted Target s motion for summary judgment as to the dilution claim and denied the motion as to the other claims. The court also denied target s motion for summary adjudication on the damages issue. Bottom Line: The district court held that Vallavista failed to show that the mark TAXI WALLET was sufficiently famous under the TDRA and the narrow definition of fame set forth by the Ninth Circuit in Jada Toys, Inc. v. Mattel, Inc., 518 F.3d 628 (9 th Cir. 2008). The court found that no reasonable fact finder could find the mark famous under the evidence provided by Vallavista, namely that it had used the mark since 1996, spent $243,000 in advertising since October 2004, and had sales of $1.7 million from October 1, 2004 through June 1, Vallavista did not provide any evidence of actual consumer recognition. Vallavista owns a federal trademark registration for the TAXI WALLET logo mark but not for the word mark TAXI WALLET. Moreover, Target provided evidence of widespread third party use of the phrase taxi wallet. Because Vallavista could not satisfy the threshold factor of fame, the court did not consider the other dilution factors. Dilution, Fame, Summary Judgment Adidas America, Inc. v. Adidas-Solomon AG v. Payless Shoesource, Inc. Case No. CV KI, 2008 U.S. Dist. LEXIS (9th Cir., Feb. 22, 2008), 2008 U.S. Dist LEXIS 69260, 2008 WL (D. Oregon, September 12, 2008) Ninth adidas sued Payless for trademark and trade dress infringement, dilution, and related federal and state law claims arising out of Payless sale of footwear bearing imitations of adidas Three-Stripe trademark and Superstar Trade Dress. The parties had been involved in litigation in New York which resulted in a settlement agreement in adidas brought

20 this action in November 2001 claiming that Payless violated the settlement agreement and otherwise violated adidas rights. The magistrate in the district court granted Payless motion for summary judgment based on the settlement agreement, and dismissed adidas other claims. After the district court judge adopted the magistrate s rulings, adidas appealed to the Ninth Circuit, which reversed the district court s ruling. Adidas then filed a third amended complaint which included federal and state dilution claims and other claims. Payless asserted affirmative defenses and counterclaims including abandonment and cancellation of the Three Stripe mark, breach of contract, unfair competition, and deceptive trade practices in violation of state law. Adidas moved for partial summary judgment on Payless counterclaims and all but two of its affirmative defenses. Payless moved for partial summary judgment on adidas claims for infringement, dilution, and willfulness, and on Payless affirmative defense of laches. The matter proceeded to a jury trial on adidas claims for trademark and trade dress infringement, dilution, and related federal and state law claims. As noted below, the jury found in favor of adidas. Disposition: As agreed by the parties, the district court applied the TDRA retroactively to adidas dilution claims for injunctive relief, and applied the FTDA to adidas claims for monetary damages because Payless allegedly unlawful actions began before the TDRA was enacted. In its February 22, 2008 order, the district court denied Payless motion for summary judgment on adidas federal trademark dilution claims, granted Payless motion for summary judgment on adidas state law dilution claims, and made other rulings that are not relevant to the dilution analysis. In a September 12, 2008 order after a three week jury trial in which the jury found for adidas and awarded $30.6 million in actual damages, $137 million in profits, and $137 million in punitive damages, the district court denied Payless motion for judgment as a matter of law on the damages claims and denied Payless motion for new trial. Bottom Line: The court recited the FTDA and TDRA factors for determining whether a mark is famous, and found that under either set of factors, adidas Three Stripe mark is famous and has been famous since as early as 1970, citing previous published court decisions recognizing the famousness of the mark as well as huge advertising expenditures, promotion, and wide recognition, and noted that adidas failure to conduct a fame survey is not dispositive. The court found that adidas submitted sufficient information to create a genuine issue of material fact as to actual dilution under the FTDA, and thus has necessarily proffered sufficient evidence to satisfy the lesser standard of dilution under the TDRA. The court found that adidas state law dilution claims were preempted by federal patent law, and therefore granted Payless motion for summary judgment dismissing adidas state law dilution claim.

21 Payless post-trial motion argued that the TDRA and the FTDA both require adidas to prove that Payless used two or four stripes on shoes as its own trademark, and that the dilution claims should fail here because Payless used stripes merely for decoration. The court found that the defendant s subjective intent was not relevant. Instead, the issue is whether consumers perceive the accused mark as a trademark. The court rejected Payless challenges to adidas experts on the actual harm issue related to damages, finding that the fact that a brand is very strong does not mean that it was not harmed by the infringement. Summary Judgment, Survey Evidence, Post-Trial Motions; Motion for New Trial; Motion for Judgment as a Matter of Law; Defendant s Intent Gregory J. Wrenn v. Boy Scouts of America, Case No. C JSW, 89 U.S.P.Q.2d 1039, 2008 WL , 2008 U.S. Dist LEXIS (N.D. Cal., October 28, 2008) Ninth Plaintiff Wrenn is the founder of the National Council of Youthscouts. Wrenn filed a trademark application for YOUTHSCOUTS with the USPTO, and the Boy Scouts of America ( BSA ) filed an opposition. Wren answered the opposition and filed a lawsuit seeking to cancel several of BSA s federal trademark registrations. The lawsuit was stayed and the TTAB ruled that BSA had valid and incontestable rights in the marks CUB SCOUTS, EAGLE SCOUTS, and BOY SCOUTS OF AMERICA, and that BSA could not be compelled to disclaim SCOUT in these registrations. The TTAB then stayed the opposition and Wren filed a declaratory judgment action on the basis that his use does not violate BSA s rights. BSA filed a motion for judgment on the pleadings arguing that Wren s declaratory judgment action impermissibly seeks an advisory opinion from the court. BSA filed a motion for summary judgment on its counterclaims for trademark infringement and Wren filed a cross-motion for summary judgment on his declaratory judgment claims that SCOUT is generic and BSA is violating the First Amendment and the antitrust laws. Disposition: The court granted BSA s motion for summary judgment on the infringement and dilution claims, denied Wren s cross-motion for summary judgment, and granted BSA s motion for judgment on the pleadings. Bottom Line: On the trademark infringement issues, the court found that BSA does not need to demonstrate likelihood of confusion because it has been granted special protection by Congressional Charter. The court nevertheless applied the infringement factors for the sake of completeness, and found a