TRADEMARK DILUTION – Trademarks and Their ‘Sound Health’

Trademarks are source identifiers and product differentiators providing necessary discernment amongst goods and products in a world full of competing business which are omnipresent especially owing to supermarkets, hypermarkets, twenty four- seven stores and the internet.

At one end is Brand awareness wherein people are generally highly aware and better aware about not only mundane goods and services but specialised, fancy, exotic, niche brands from all corners of the world. Customers and public at large are better exposed to unique and inspirational brands with transborder presence and reputation commanding high aspirations from these consumers. So much so, that such brands have given rise to thriving grey, black and parallel markets with a spin off on cheaper look alike goods and imitation goods.

At the other end is incessant and multi-platform Brand promotion via various sources of print and media ensuring almost never ending visibility. Interestingly, High end and highly distinctive brands and icons are accorded stellar market presence with limited, minimal and selective promotions aimed at a select and target audience.

It is these two ends that trademark law tends to balance, one end being consumers who are to be insulated from deception and misleading information regarding trademarks and brands and the other end being tradespersons whose trademarks and brands are always at high risk of being diluted and tarnished by way of piracy, imitation and disparagement.

It is in this context that the concept of ‘trademark dilution’ gains credence in today’s highly connected and inter-connected world where even fleeting indiscretion and ignorance on part of both trades people and consumers could lead to trademark dilution resulting in brand devaluation and negative impact on the trust, loyalty and quality that the brand would have painstakingly built over a considerable period of time.

Trademark Dilution:

Trademark dilution was first proposed and analysed by Frank Scheckter in his seminal work ‘The Rational Basis of Trade Mark Protection’ in 1927.

Judge Learned Hand very succinctly sets out while ruling for injunctive relief for use of trademark similar to that of the plaintiff, though the goods were unrelated, in Yale Electric Corp. v. Robertson, 26 F.2nd 972 (2d Cir. 1928) as under:

“It has of recent years been recognised that a merchant may have sufficient economic interest in the use of his mark outside the field of his own exploitation to justify interposition by a court. His mark is his authentic seal; by it he vouches for the goods which bear it; It carries his name for good or ill. If another uses it, he borrows the owner’s reputation whose quality no longer lies within his own control. This is an injury, even though the borrower does not tarnish it, or divert any sales by its use; for a reputation, like a face, is the symbol of its possessor and creator, and another can use it only as a mask. And so it has come to be recognised that, unless the borrower’s use is so foreign to the owner’s as to insure against any identification of the two, it is unlawful”.

Robustness of Trademarks:

It is therefore evident from the above the importance of maintaining the robustness of one’s trademarks and their strength, good health, sound health even, that one has to constantly monitor their trademarks from dilution. From the ruling above, it is seen that dilution could occur amongst unrelated goods also. The following steps help in preserving the uniqueness and distinctiveness of trademarks and nurturing their reputation:

1. Trademarks watch: engage services of specialised trademark watch agencies who help in watching trademarks globally so at the slightest hint of similarity of marks or identical marks encroaching the market these agencies alert trademark owners.

2. One-of-a-kind Trademarks: create trademarks and logos that are unique in their font, style, get up etc so that they create instant connection and recognition amongst their target audience.

3. Brand reputation: create brand reputation by way of brand promotion and awareness through various electronic and print media, social media, road shows etc., so that the brand and its trademarks attain the status of well – known marks by which they are recognised across nations and continents. Many countries recognise well – known marks and offer protection despite the trademarks not being used in such countries.

4. Legal action: upon receiving alerts from trademark watch agencies, ensure appropriate legal action is taken so as to protect the trademark from infringement, passing off, disparagement etc.

5. Make the Brand work: put the trademarks and brands to good use by way of licensing, franchising, selling, mortgaging even, by which the brand gains wider presence and acceptance in the market.

By Larry Wilson