Rep. Smith Introduces Bill to Tweak Trademark Dilution Statute

July 26, 2012. Rep. Lamar Smith (R-TX), Chairman of the House Judiciary Committee (HJC), introduced HR 6215 [LOC | WW | PDF], an untitled bill to amend the Trademark Act regarding remedies for dilution.

There are no cosponsors. The HJC announced on July 27 that it will mark up this bill on Wednesday, August 1, 2012. See, notice.

15 U.S.C. § 1125(c) pertains to "Dilution by blurring; dilution by tarnishment". It provides that holders of certain famous marks may bring a federal action, and obtain injunctive relief, against someone who dilutes that mark by either blurring or tarnishment.

Subsection 1125(c)(6), which this bill would amend, provides, among other things, that a federal trademark registration is a complete bar against a claim against the holder, based upon either common law or state statute, to prevent dilution by blurring or tarnishment. It preempts state law dilution claims directed at marks registered with the U.S. Patent and Trademark Office (USPTO).

It should be recalled that the intellectual property clause in the Constitution gives the Congress the authority to pass laws regarding patents and copyrights, but not trademarks. Congressional authority to write trademark laws is based upon the commerce clause. The Congress has preempted state patent and copyright law. There is, however, both state and federal trademark law, including remedies for dilution of famous marks.

This bill tweaks a subsection that operates as a preemption provision. As a consequence, it also operates as an incentive to federal registration.

Legislative History. Trademark historically was based on the principle of consumer harm. That is, the statute sought to protect consumers from confusion as to the origin of goods and services. It protects consumers from mistakes and deception.

In 1995 the 104th Congress enacted HR 1295, the "Federal Trademark Dilution Act of 1995", or FTDA. President Clinton signed it in January of 1996. It is Public Law No. 104-98. The FTDA added subsection (c), regarding dilution of famous marks. This is based on protecting marks, and the owner of the mark's investment. It is more in the nature of a property right.

However, the FTDA did not add subsection (c)(6).

In 2006, the 109th Congress passed HR 683, the "Trademark Dilution Revision Act of 2006", or TDRA. It is Public Law No. 109-312. See, stories titled "CIIP Subcommittee Holds Hearing On Trademark Dilution Revision Act" in TLJ Daily E-Mail Alert No. 1,081, February 23, 2005, and "Bush Signs Trademark Dilution Revision Act" in TLJ Daily E-Mail Alert No. 1,464, October 9, 2006.

The TDRA was enacted in reaction to the Supreme Court's March 4, 2003 opinion in Moseley v. V Secret, 537 U.S. 418. See, story titled "Supreme Court Rules in Trademark Dilution Case" in TLJ Daily E-Mail Alert No. 618, March 6, 2003.

The TDRA made it easier for holders of a famous mark to prevail in federal actions brought under Section 1125(c) for blurring or tarnishment. Although, it also tightened what constitutes famous marks.

Subsection (c)(1) now provides, in part, that "the owner of a famous mark that is distinctive, inherently or through acquired distinctiveness, shall be entitled to an injunction against another person who, at any time after the owner’s mark has become famous, commences use of a mark or trade name in commerce that is likely to cause dilution by blurring or dilution by tarnishment of the famous mark, regardless of the presence or absence of actual or likely confusion, of competition, or of actual economic injury."

Also, 15 U.S.C. § 1052, regarding trademark registration, provides in part that "A mark which would be likely to cause dilution by blurring or dilution by tarnishment under section 1125(c) of this title, may be refused registration only pursuant to a proceeding brought under section 1063 of this title. A registration for a mark which would be likely to cause dilution by blurring or dilution by tarnishment under section 1125(c) of this title, may be canceled pursuant to a proceeding brought under either section 1064 of this title or section 1092 of this title."

The TDRA also added subsection (c)(6), which would be amended by the just introduced bill.

Bill Summary. This bill would amend Subsection 1125(c)(6), which is titled "Ownership of valid registration a complete bar to action".

This subsection currently provides as follows:

This bill would replace revise subsections (A) and (B). As amended, subsection 1125(c)(6) would be as follows:

These are very similar.

Explanation. Rep. Smith released no statement regarding this bill. The HJC has held no hearing in the 112th Congress on this bill, or subsection 1125(c)(6).

When the HJC wrote the TDRA, there was discussion and debate, but not regarding subsection 1125(c)(6). When the HJC reported the TDRA, subsection (c)(6) was numbered (c)(5). The HJC report on the TDRA, House Report No. 109-23, did not explain this subsection.

The Intellectual Property Owners Association adopted a resolution on June 11, 2012, supporting the change made by this bill.

This subsection bars certain claims that are brought against holders of federal marks, and that concern those marks. Under both the TLDA, and the language of the just introduced bill, a person may not maintain a claim against the holder of a federal mark, for dilution, that is based upon common law or a state statute. That person, however, may maintain an claim for dilution against the holder of a federal mark, regarding that mark, if the claim pleads violation of the federal dilution statute, subsection 1125(c)(1).

This provision would appear to apply to actions brought in either state or federal court, and to claims pled by way of complaint or counterclaim. Although, the statute does not expressly state this.

The relevant clauses in the current statute, and the bill, are identical. What would be changed would be how the final three clauses are joined. The current statute is in the form of

(X and Y) or Z

while the proposed revision is in the form of

X and (Y or Z)

where X is the clause "is brought by another person under the common law or a statute of a State", Y is the clause "seeks to prevent dilution by blurring or dilution by tarnishment", and Z is the clause "asserts any claim of actual or likely damage or harm to the distinctiveness or reputation of a mark, label, or form of advertisement".

X pertains to whether or not the claim is based common law or state statute. Y and Z are both types of claims -- dilution, and damage to distinctiveness of a mark.

This bill would not affect claims based on Y (dilution). Under both the current statute, and this bill, both X and Y would have to be present for the bar of (c)(6) to preclude a dilution claim.

One effect of this bill would be on claims based upon Z (damage to distinctiveness of a mark). Under the just introduced bill, for a Z claim to be barred, X (based upon common law or state statute) would have to be present. However, under current law, a person is barred by (c)(6) from maintaining a Z claim, even if it is not based upon common law or state statute.