Trademark Dilution and its Key Concepts
A report from World Intellectual Property Office (WIPO) states that approximately 13.4 million trademark applications were filed worldwide in 2020. This is particularly of interest given the current pandemic situation and how it did not impact trademark filing numbers. With the rising intensity in trademark activities, there has been a significant increase in trademark dilution and infringement cases.
While the awareness about trademark dilution rights is comparatively lower than trademark infringement, it is important to note that trademark dilution can be equally detrimental to a company. Our latest article discusses the concept of dilution of trademark, its difference from trademark infringement, ways of brand dilution, and its interpretation in day-to-day business activities.
What is Trademark Dilution?
Trademark Dilution is regarded as the surface of trademark infringement, where the owner of a mark receives protection against its use that may weaken the uniqueness of a famous trademark. Dilution differs from trademark infringement as there is no specific requirement to prove a likelihood of confusion for protecting the mark. Instead, all that is needed is the use of a famous mark by a third party, causing dilution of the superior quality of the trademark. Under the clause of the trademark dilution act, only famous marks enjoy protection against dilution. The following points are considered while determining whether a mark is recognized or not:
- The extent and duration of use of the mark
- The extent and duration of advertising for the mark
- The geography in which the mark has been used
- The level of distinctiveness of the mark (either through the inherent nature of the mark itself or via acquired distinctiveness
- The level of recognition of the mark
- The method through which the product has been marketed and distributed
- The use of a mark by third parties
- Whether the mark has been registered
In general, a mark should have achieved substantial public recognition for it to be considered ‘famous’. A broad public recognition means that the mark is instantly recognizable. For example, brand names such as Nike, Coca-Cola, Colgate, Sony, Ikea, etc. are visually common names in the global community and would naturally qualify as a famous trademark.
Now that we understand the basics of trademark dilution and the associated scope, let us discuss how trademark dilution occurs.
How Trademark Dilution Occurs?
1. Blurring of Trademark: It occurs when a famous mark identity is harmed or damaged because of unauthorized use by a third party. The use of a mark by a third party reduces the likelihood of mark serving as a unique identifier of the owner’s product and hampering its selling capacity. Blurring of trademark starts when several third parties have applied for or have registered or are using deceptively identical, similar trademarks. Some of the more famous examples of blurring trademarks (shown in Figure 1) are Aspirin, Rolls-Royce, Escalator, Thermos, and Cellophane. Unfortunately, the illegal use of these trademarks is rampant in the market, leading to obscurity in trademark rights.
2. Tarnishment of Trademark: A trademark is tarnished when the challenged mark in question links the original mark to the products that are of inferior quality. Moreover, the impugned mark reflects the original in a distasteful context that is likely to reflect the owner’s product poorly. Trademark tarnishment is a common problem, especially in countries like India, China, Bangladesh, etc., with several deceitful manufacturers and sellers. They are willing to use the original mark with slight tampering and sell the product at a low cost, severely impacting the owner’s brand equity. Some of the popular examples (shown in Figure 2) of trademark tarnishment are Coca-Cola, Starbucks Coffee, etc.
3. Freeriding of Trademark: Trademark freeriding happens when a trademark owner starts leveraging the benefits of a positive association between the owned and a well-known third-party mark. Trademark freeriding is also referred to as parasitic exploitation by several countries. Therefore, many countries worldwide, including the European Union (EU), consider freeriding as an actionable offense. However, freeriding cannot be considered an injury or damage in trademark law as the defendant’s gains do not lead to the plaintiff’s loss. Some of the examples of trademark freeriding are Red Bull & the Bulldog, L’Oréal/Bellure, etc.
Having understood how trademark dilution occurs, let us discuss the various types of mark on the level of dilution.
Types of Marks on the Level of Dilution
There are five types of marks on the level of dilution as shown in Figure 4.
1, Generic Trademark: Such trademarks become generic or synonymous with a particular class of product or service. The association of the term with the related class of service becomes strong due to its popularity or underlying significance against the intentions of trademark holder. These kinds of marks are unregistrable until they have achieved distinction via constant use. The use of generic trademarks is similar to blurred trademark dilution. Some of the finest examples are Apple (consumer electronics), Xerox (photocopier), cello tape (adhesive tape), Tupperware (home products), Band-Aid (adhesive bandages), etc.
2. Descriptive Trademark: These are terms that identify the characteristics of a product or service to which the mark pertains. It is similar to the use of an adjective. Descriptive trademarks are unregistrable and refused mainly by the trademark office as falling within the absolute grounds of refusal. Some of the examples of descriptive trademarks are shown in Figure 5.
3. Suggestive Trademark: These kinds of trademarks are not descriptive but contain suggestions or references to the actual products or services. Such trademarks require consumers to use their creativity. Suggestive trademark suggests a quality or characteristics of goods and services for offering although this is done in an indirect manner. Some of the popular examples of suggestive trademarks are shown in Figure 6.
4. Arbitrary Trademark: It is also known as fanciful marks. These trademarks consist of a word or symbol that has no relationship with the products or services on the offering. Arbitrary trademark is quite different from descriptive trademark that describes some product or service dimension. Besides, unlike a descriptive trademark, an arbitrary trademark is registrable and is protected by trademark rights. Some of the examples of arbitrary trademarks are shown in Figure 7.
5. Coined/Invented Trademark: These types of trademarks have the strongest possibility for registration. Coined trademarks are invented terms bearing no resemblance to any dictionary word or meaning. The idea behind developing coined/invented trademark is to create a positive association between the mark and the product/service on the offerings. Some of the examples of coined/invented trademarks are shown in Figure 8.
To conclude, we can say that trademark dilution can be equally detrimental to the company as a trademark infringement would be. Although the awareness about trademark dilution rights is comparatively lower than infringement, it can be enforced equally and strongly, if not more, to protect the uniqueness of your brand. Comprehending the concept of trademark dilution can be a stretching task. Therefore, it is pragmatic to avail the services of a third-party service provider.
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- Gopal Singh Rawat (Trademark) and the Editorial Team