The Rational Basis of Trademark Protection Revisited: Putting the Dilution Doctrine into Context

Abstract

The adoption of the Federal Trademark Dilution Act (the “FTDA”) in 1995, which incorporated a federal dilution clause into the Lanham Act, was preceded by a great deal of debate. The question lying at the heart of the discussion was whether the dilution doctrine is consistent with sound trademark policy or whether the far-reaching entitlements that the FTDA affords the owners of famous marks have instead created “dilution” of a kind that Congress may not have envisaged: a blurring of the conceptual boundaries of trademark law. It turns out that this question has important implications on a number of trademark doctrines (such as inherent distinctiveness, functionality, and trade dress). This Article’s thesis is that the dilution doctrine and the traditional tests for trademark infringement have the same rational basis – that they may all be coherently explained on the basis of the functional approach. To prove this the- sis, I will introduce two concepts: the “communication function” and “intrinsic reputation.” On the basis of these concepts, I will argue that trademarks could not fulfill their economic functions if they were not protected against dilution. Hence, I will conclude that the FTDA should be welcomed and that it should be applied to any name or device that is capable of fulfilling the functions for which we consider trademarks beneficial, be it a word, a symbol, or a product configuration. Part I explores the economic functions that trademarks per- form, how they relate to each other and whose interests they serve, arguing first, that trademarks fulfill both a product-identifying function and a communication function, and finally, that some trademarks have an intrinsic reputation. These two concepts suggest a utilitarian justification of the dilution doctrine. Part I also examines the various ways in which the likelihood of confusion test and the dilution doctrine (as well as the so-called identity rule in European trademark regimes) act together to ensure that trademarks can fulfill their economic functions. Part I concludes that the dilution doctrine is as vital to preserving the economic and social benefits that are expected to ensue from trademarks as the traditional tests. Part II examines why the dilution doctrine has sparked so much criticism in academia. My explanation is essentially twofold. First, one’s attitude towards the dilution doctrine depends on one’s understanding of the functional canon of trade- marks. So long as the debate surrounds the issue of trademark functionality, the dilution doctrine will remain controversial. Second, the lack of popularity of the dilution doctrine in the academic world may have to do with the exclusive rights-free competition dichotomy that characterizes intellectual property law in general. Although this dichotomy is sometimes thought to apply to trademarks with particular force, I will argue that it should not. The questions discussed in this Article are not Lanham Act- specific; they are basic questions every modern trademark regime confronts. As a result, it is interesting to see how other jurisdictions address them. A comparative analysis will also complement the historical context in which the dilution doctrine has evolved in the United States. The idea of protecting trademarks in the absence of a likelihood of confusion on the part of consumers began with an article that Frank Schechter wrote for the Harvard Law Review in 1927. Schechter’s views were markedly influenced by the German trademark law of that period.5 As we will see, German trademark law has undergone a number of major changes since 1927, one of the most significant ones involves the impact of European Community (“EC”) law on national law. It may, for this reason alone, be interesting to see how the dilution doctrine, that has remained a debated topic in the United States for almost a century, is construed and applied both in Germany and Europe today.

Cite this work

No public copy is stored for this record, so only the metadata is cited.

Stored only when both papers are in the corpus — 38 citations exist upstream.