Trademark Dilution

The concept of dilution developed in the 20th century to protect trademarks as a property right, securing the investment the trademark owner has made in establishing and promoting a strong mark.

It was in the 1990s that the United States enacted a law against trademark dilution. Even though the concept of dilution was being discussed in academic circles in early 20th century, it was only later that the states began adopting such laws.

Dilution is a trademark law concept which forbids the use of a famous trademark in a way that would lessen its uniqueness. In most cases, trademark dilution involves an unauthorized use of another's trademark on products that do not compete with, and have little connection with, those of the trademark owner. For example, a famous trademark used by one company to refer to software products, might be diluted if another company began using a similar mark to refer to cosmetic products.

Trademark law was originally focused on the need for consumer protection. Consequently, trademark law traditionally concerned itself with situations where an unauthorized party sold goods that are directly competitive with or at least related to those sold by the trademark owner.

A trademark is diluted when the use of similar or identical trademarks in other non-competing markets means that the trademark in and of itself will lose its capacity to signify a single source. In other words, unlike ordinary trademark law, dilution protection extends to trademark uses that do not confuse consumers regarding who has made a product. Instead, dilution protection law aims to protect sufficiently strong trademarks from losing their singular association in the public mind with a particular product, perhaps imagined if the trademark were to be encountered independently of any product (just the word Xerox for example).

The strength a trademark must have to deserve dilution protection differs among jurisdictions, though it generally includes the requirement that it must be distinctive, famous, or unique. Such trademarks would include instantly recognizeable brand names, such as Samsung, or Sony, and unique terms that were invented (such as Exxon or Enron) rather than surnames (such as Ford) or ordinary words in language. Some jurisdictions require additional registration of these trademarks as defensive marks in order to qualify for dilution protection.

Another way of describing the necessary strength of a trademark may establish some basis for dilution protection from a consumer confusion standpoint. Truly famous trademarks are likely to be seen in many different contexts due to branching out or simple sponsorship, to the extent that there may be very few markets, if any, that a consumer would be surprised to see that famous trademark involved in. A prime example may be the past involvement of Coca-Cola in clothing lines.

Dilution is sometimes divided into two related concepts: blurring, or essentially basic dilution, which "blurs" a mark from association with only one product to signify other products in other markets (such as "Tata Pressure Cooker"); and tarnishment, which is the weakening of a mark through unsavory or unflattering associations. Not all dilution protection laws recognize tarnishment as an included concept.

Prior to specifically targeted laws being adopted, dilution protection was used in some jurisdictions to attack domain name infringement of trademarks.