A Coffee-Mark Hypothetical

Consider a hypothetical that tracks the kind of dispute trademark owners regularly face. A coffee company owns a well-known trademark for its line of blended, ice-based coffee drinks. A newcomer then applies to register a similar-sounding mark for its own coffee beverages, and the established company objects, arguing that the two marks are too close and likely to be confused.

Whether or not any particular objection succeeds, this kind of dispute is a useful way to introduce the two theories this article compares: a likelihood-of-confusion claim and a dilution claim. The sections below take up each in turn.

How Likelihood of Confusion Is Decided in a Trademark Opposition

When a coffee company opposes an application like the one in our hypothetical, it does so before the Trademark Trial and Appeal Board (the TTAB), the tribunal inside the U.S. Patent and Trademark Office that hears oppositions. The Board decides likelihood of confusion under Section 2(d) of the Lanham Act, 15 U.S.C. § 1052(d), using the thirteen factors set out in In re E.I. du Pont de Nemours & Co., 476 F.2d 1357, 1361 (C.C.P.A. 1973). When of record, those DuPont factors include:

  1. the similarity of the marks in appearance, sound, connotation, and commercial impression;
  2. the similarity and nature of the goods or services;
  3. the similarity of established, likely-to-continue trade channels;
  4. the conditions of sale and the sophistication of buyers, meaning impulse versus careful, sophisticated purchasing;
  5. the fame of the prior mark, measured by sales, advertising, and length of use;
  6. the number and nature of similar marks in use on similar goods;
  7. the nature and extent of any actual confusion;
  8. the length of time and the conditions under which there has been concurrent use without evidence of actual confusion;
  9. the variety of goods on which the mark is or is not used;
  10. the market interface between the applicant and the owner of the prior mark;
  11. the extent to which the applicant has a right to exclude others from using its mark;
  12. the extent of potential confusion, meaning whether it is de minimis or substantial; and
  13. any other established fact probative of the effect of use.

The Board does not run this list mechanically. As the DuPont court explained, “[t]he evidentiary elements are not listed above in order of merit,” and “[e]ach may from case to case play a dominant role.” Not every factor is relevant in each case, and any single factor may decide the outcome. In the court’s words, “each case must be decided on its own facts,” and “[t]here is no litmus rule which can provide a ready guide to all cases.” For your own brand, the practical lesson is that an opposition turns on the specific record you build, not on a fixed checklist.

The Confusion Test in Infringement Litigation

An opposition is not the only place confusion gets tested, and it is worth knowing that the test changes with the forum. If the coffee company sued a competitor for trademark infringement in federal district court, the court would apply its own circuit’s multi-factor confusion test rather than the DuPont factors. In the Ninth Circuit, that test comes from AMF, Inc. v. Sleekcraft Boats, 599 F.2d 341, 348-49 (9th Cir. 1979), which lists eight factors:

  1. the strength of the mark;
  2. the proximity of the goods;
  3. the similarity of the marks;
  4. evidence of actual confusion;
  5. the marketing channels used;
  6. the type of goods and the degree of care likely to be exercised by the purchaser;
  7. the defendant’s intent in selecting the mark; and
  8. the likelihood of expansion of the product lines.

Here too the factors are a flexible guide, not a checklist. The Sleekcraft court cautioned that the “list is not exhaustive” and that “[o]ther variables may come into play depending on the particular facts presented.” Not every factor need point the same way, and a court weighs them together rather than tallying a score.

Dilution: A Separate Theory for Famous Marks

In our hypothetical, the coffee company might also claim that the newcomer’s mark would “dilute” its famous mark. Dilution is a distinct theory from confusion, and it is reserved for a small class of famous marks. The primary federal trademark statute is the Lanham Act, enacted as the Trademark Act of 1946 and codified at 15 U.S.C. §§ 1051-1141n.

An older version of the statute defined “dilution” as “the lessening of the capacity of a famous mark to identify and distinguish goods or services.” That single definition is no longer the law. The Trademark Dilution Revision Act of 2006, Pub. L. No. 109-312, 120 Stat. 1730, struck it from the Lanham Act’s definitions section and restructured federal dilution law around two separately defined harms. The same 2006 Act also lowered the required showing from actual dilution, which Moseley v. V Secret Catalogue, Inc., 537 U.S. 418 (2003), had required, to a likelihood of dilution.

What makes dilution powerful, and different from ordinary infringement, is that it does not depend on customer confusion at all. The owner of a famous, distinctive mark is entitled to an injunction against a later mark “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.” 15 U.S.C. § 1125(c)(1). Ordinary infringement, by contrast, rises or falls on a likelihood of confusion.

What Makes a Mark Famous

Dilution protection reaches only truly famous marks. Under federal law, a mark is famous only if it is “widely recognized by the general consuming public of the United States as a designation of source” of the owner’s goods or services. 15 U.S.C. § 1125(c)(2)(A). This is a demanding, nationwide standard that few marks meet. In deciding whether a mark has that degree of recognition, a court may consider all relevant factors, including four that the statute names:

  1. the duration, extent, and geographic reach of advertising and publicity of the mark, whether by the owner or by third parties;
  2. the amount, volume, and geographic extent of sales of goods or services offered under the mark;
  3. the extent of actual recognition of the mark; and
  4. whether the mark is federally registered.

The Two Forms of Dilution

Dilution can occur two ways: by blurring and by tarnishment.

Dilution by blurring is “association arising from the similarity between a mark or trade name and a famous mark that impairs the distinctiveness of the famous mark.” 15 U.S.C. § 1125(c)(2)(B). This is the classic dilution harm: a famous mark’s unique, source-identifying power is whittled away when similar marks appear on other goods and services, even without any confusion or competition. In deciding whether a mark is likely to cause dilution by blurring, a court may consider six statutory factors: the degree of similarity between the marks; the inherent or acquired distinctiveness of the famous mark; the extent of the owner’s substantially exclusive use of the mark; the degree of recognition of the famous mark; whether the later user intended to create an association with the famous mark; and any actual association between the marks.

Dilution by tarnishment is “association arising from the similarity between a mark or trade name and a famous mark that harms the reputation of the famous mark.” 15 U.S.C. § 1125(c)(2)(C). It occurs when the accused mark’s use creates negative or unsavory associations with the famous mark. Unlike blurring, tarnishment has no separate list of statutory factors.

Uses Exempt From a Dilution Claim

Federal law also carves out uses that cannot be reached by a dilution claim. Not actionable as dilution by blurring or tarnishment are: any fair use of a famous mark, including nominative or descriptive fair use and use in comparison, criticism, or parody, other than as a designation of source for your own goods or services; all forms of news reporting and news commentary; and any noncommercial use of a mark. 15 U.S.C. § 1125(c)(3). If you are commenting on, comparing against, or parodying a famous brand, these exemptions are where your defense often begins.

Minnesota’s Antidilution Statute

Because your business is based in Minnesota, state law matters here too. Minnesota has its own antidilution statute. The owner of a mark “that is famous in this state” may seek an injunction against another person’s commercial use of a mark or trade name, if the use begins after the mark has become famous and causes dilution of the distinctive quality of the mark. Minn. Stat. § 333.285(a).

The following factors go to the threshold question of whether a mark is “distinctive and famous,” meaning whether it qualifies for protection at all, not to whether dilution has occurred. In determining whether a mark is distinctive and famous, a Minnesota court may consider factors such as, but not limited to:

  1. the degree of inherent or acquired distinctiveness of the mark in Minnesota;
  2. the duration and extent of use of the mark in connection with the goods and services with which it is used;
  3. the duration and extent of advertising and publicity of the mark in Minnesota;
  4. the geographical extent of the trading area in which the mark is used;
  5. the channels of trade for the goods or services;
  6. the degree of recognition of the mark in the trading areas and channels of trade used by the mark’s owner and the person against whom the injunction is sought;
  7. the nature and extent of use of the same or similar mark by third parties; and
  8. whether the mark is subject to state or federal registration.

What you can recover under the Minnesota statute is limited. A famous-mark owner is entitled only to injunctive relief unless the person against whom relief is sought “willfully intended to trade on the owner’s reputation or to cause dilution of the famous mark,” in which case the chapter’s fuller remedies become available, subject to the court’s discretion and the principles of equity. Minn. Stat. § 333.285(b). The statute also lists uses that are not actionable: fair use of a famous mark in comparative commercial advertising or promotion, noncommercial use of a mark, and all forms of news reporting and news commentary. Minn. Stat. § 333.285(c).

Enforcement Is Also About Reputation

Trademark enforcement is not only about who prevails on the legal claim. In my experience, a business on either side of a cease-and-desist letter is often well served by weighing the practical and reputational stakes of a dispute alongside the strictly legal question. If you are dealing with a trademark dispute on either side of such a letter, it can help to consider both dimensions together.