Dilution can be a good thing and a bad thing. It all depends on the situation. For example, you wouldn’t want to open a packet of powdered drink and chug it down. Rather, you want to dilute it with the appropriate amount of water. For an owner of a famous trademark, dilution is always a bad thing.

Protection of the law

Both federal and California law provide protection against trademark dilution. At the federal level, the relevant law is the Trademark Dilution Act. In California, the relevant statute is in the Business and Professions Code and is known as BPC § 14247.

The two laws effectively serve the same purpose – to give owners of trademarks that are both distinctive and famous or well-known trademarks the ability to prevent others from using similar marks even in the absence of competition. Hence, it is a dilution claim that can prevent someone from conducting a Coca Cola Real Estate Brokerage Service.

If an alleged violation of mark is made in federal court, the plaintiff must show that:

  • The mark is famous
  • The defendant is making money off the mark
  • The defendant started using the mark after it became famous
  • The defendant’s use of the mark is diluting the value to the plaintiff

California’s law reads much the same, but includes the following language on the definition of the word “famous.” It reads:

“A mark is famous if it is widely recognized by the general consuming public of this state, or by a geographic area of this state, as a designation of source of the goods or services of the mark’s owner.”

There are two types of dilution: blurring and tarnishment. Blurring typically involves using the famous mark for a noncompetitive good or service that whittles away the distinctiveness of the famous mark. Tarnishment involves damaging the reputation of the famous trademark by the poor quality of defendant’s product or the use of the distinctive mark in connection with something tawdry or unwholesome, e.g., Disney strip clubs. To assess whether dilution of your famous mark has occurred or whether your use on noncompetitive goods of a mark may amount to dilution, consult an experienced attorney.