Dynamics of Trademark Dilution: Issues and Challenges in India and USA

Trademarks of an establishment cannot solely be associated with identification of origin or source. It performs an imperative task of building brand name and value. The dilution theory rejects the opinion that the role of a trademark is solely based on the recognition of the root or source of its origin and that it is not only a figurative representation but carries a creative aspect as well. For the most recent decade, the greatest inquiry in trademark law has been the manner by which to demonstrate weakening or dilution. Dilution has turned out to be a dauntingly slippery idea. The principal issue with dilution law is that it gives a cure without a supportable hypothesis of the harm or damage. Even though lately the concept has been recognized in International as well as domestic jurisdiction putting an immense responsibility on domestic jurisdiction to protect trademarks against dilution, very little has been discussed or clarified regarding the theory of dilution. Ambiguity of such nature facilitated this research trying to spot some light on the theory of dilution comparing it from divergent angles in different jurisdictions. The paper also highlights the interpretation mechanism of the courts of the dilution provision and explains the concept further with reference to important cases under the U.S. laws and European judgments in the context of the Dilution laws and draws a comparative analysis of the effectiveness of the legal framework present in India with that of the USA.

Empirical Investigation of Sport Trademark Dilution Using Contingent Valuation Method

Under the federal trademark law, owners of famous sport trademarks may bring legal claims against unauthorized users of their marks under the infringement and dilution theory. Although the rationale of trademark infringement has been supported by various notions of consumer psychology and law and economics, the theory of dilution has been criticized for the lack of empirical support. This study investigated whether the junior use of major sport trademarks would have dilutive effects on the senior marks in financial terms. The study employed the contingent valuation method, a technique designed to estimate the economic values of nonpecuniary assets such as trademarks. A total of 140 subjects were exposed to dilutive information while they purchased sport brand merchandise. A series of pre- and posttests revealed that moderately famous sport trademarks suffered dilutive harm from junior use, whereas exceptionally famous marks were immune to the dilutive effects. Theoretical and practical implications were discussed.

The Strategic Effects of Trademark Protection

We study the effects of trademark protection on firms’ profits and strategy using the 1996 Federal Trademark Dilution Act, which granted additional legal protection to selected trademarks. We find that the FTDA raised treated firms’ operating profits and was followed by a spike in trademark lawsuits and lower entry and exit in affected product markets. Treated firms reduced R&D spending, produced fewer patents and new products, and recalled a higher number of unsafe products. Our results suggest that stronger trademark protection negatively affected innovation and product quality. (JEL D22, K2, L43, O31, O34, O38) Authors have furnished code/data and an Internet Appendix, which are available on the Oxford University Press Web site next to the link to the final published paper online.

The New Wild West: Measuring and Proving Fame and Dilution Under the Federal Trademark Dilution Act

63 Albany Law Review 201 (1999)

Trademark dilution: comparing the effects of blurring and tarnishment cases over brand equity

Trademark dilution is, in a general sense, a reduction in brand equity due to the unauthorized use of the trademark by third parties (junior brands). Although there are two types of dilution, blurring and tarnishment, existing academic empirical evidence only relates to blurring cases, showing its damage to some variables related to brand associations in consumers’ minds. Literature also shows the moderating role of the similarity between junior brands, but this evidence is not complete unless presumable tarnishment cases are analyzed. This paper compares the effect of two types of junior brands over strength of associations and brand equity of famous trademarks. An experimental approach was applied with a sample of 372 undergraduate students, users of two famous convenience brands. Junior brands use identical or similar famous brand names in different product categories, offering a continuous of similarity levels, so the moderating effect of this variable is analyzed. Results show that: (i) dependent variables are reinforced when junior brands are perceived as very similar, and diluted above some degree of dissimilarity; (ii) dilution increases the more dissimilar the junior brand. However, although they have a high degree of dissimilarity, cases of presumable tarnishment, might not always produce dilution. Besides, they suggest that the effect induced by similarity is not linear. These findings are discussed through the lenses of marketing and psychology theories. The study represents a contribution to the field, providing evidence not only from blurring cases, but also from supposed tarnishing imitators, comparing their effects and showing the limited moderating effect of similarity. The boundary conditions of similarity effects in trademark dilution literature have not been discussed previously. Finally, main implications for managers are highlighted, given the negative effects that trademark dilution may entail at firm level.

Ontwikkeling van die gemenereg in die lig van artikel 39(2) en 173 van die Grondwet

Die onderwerp van hierdie voordrag is wydlopend en voortydig. Toe Professor Wigmore in 1914 met 'n vergelykbare onderwerp genader is, het hy wyslik die aanbod van die hand gewys:[1]The law is so obviously in a seething change that one might as well expect to analyze a chemical reaction while the test tube is over the flame.Oor deliktereg (law of torts) het hy bygevoeg:The old-time doctrines of liability are changing so fast that it is difficult to keep up with them . . . certainly many existing books may be sold for old paper.'n Mens kan met reg vra of die ius connubiorum van Brouwer en die Law of Husband and Wifevan Professor Hahlo nie nou "Seksuele Verhoudingsreg" geword het nie. Is onregmatigheid en skuld vereistes vir deliktuele aanspreeklikheid of hang dit maar daarvan af of die verweerder die staat is of versekering dra? Leer u nog steeds u studente dat 'n kontrak 'n tweesydige verbintenis is? Dit is mos 'n losse driesydige verhouding waartoe die regter 'n party is? Leer u hulle steeds dat dit op wilsooreenstemming gebaseer is in plaas van willekeur? Die verkorte LLB kan dan nog meer verkort word[1] Aangehaal deur Tony Martino Famous Trade Marks, cf Martino Trademark dilution.