[Congressional Record Volume 141, Number 211 (Friday, December 29, 1995)]
[Senate]
[Pages S19310-S19311]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. HATCH:
  S. 1513. A bill to amend the Trademark Act of 1946 to make certain 
revisions relating to the protection of famous marks; to the Committee 
on the Judiciary.


                   the federal trademark dilution act

  Mr. HATCH. Mr. President, I am very pleased to introduce today the 
Federal Trademark Dilution Act of 1995.
  Mr. President, this bill is designed to protect famous trademarks 
from subsequent uses that blur the distinctiveness of the mark or 
tarnish or disparage it, even in the absence of a likelihood of 
confusion. Thus, for example, the use of DuPont shoes, Buick aspirin, 
and Kodak pianos would be actionable under this bill.
  The concept of dilution dates as far back as 1927, when the Harvard 
Law Review published an article by Frank I. Schecter in which it was 
argued that coined or unique trademarks should be protected from the 
``gradual whittling away of dispersion of the identity and hold upon 
the public mind'' of the mark by its use on noncompeting goods. Today, 
25 States have laws that prohibit trademark dilution.
  A Federal dilution statute is necessary, Mr. President, because 
famous marks ordinarily are used on a nationwide basis and dilution 
protection is only available on a patchwork system of protection. 
Further, some courts are reluctant to grant nationwide injunctions for 
violation of State law where half of the States have no dilution law. 
Protection for famous marks should not depend on whether the forum 
where suit is filed has a dilution statute. This simply encourages 
forum-shopping and increases the amount of litigation.
  Moreover, Mr. President, the GATT agreement includes a provision 
designed to provide dilution protection to famous marks. Thus, 
enactment of this bill will be consistent with the terms of the 
agreement, as well as the Paris Convention, of which the United States 
is also a member. Passage of a Federal dilution statute, Mr. President, 
would also assist the executive branch in its bilateral and 
multilateral negotiations with other countries to secure greater 
protection for the famous marks owned by U.S. companies. Foreign 
countries are reluctant to change their laws to protect famous U.S. 
marks if the United States does not afford special protection for such 
marks.
  Mr. President, as many Members will recall, a Federal dilution 
statute was proposed as part of the comprehensive trademark reform 
package that was enacted into law in November 1988, and took effect 1 
year later. The comprehensive bill initially passed by the Senate 
included the dilution provision. However, the dilution proposal was 
deleted from the bill prior to final congressional passage. The current 
proposal, I believe, eliminates any concerns previously voiced in 
congressional hearings regarding the former Federal dilution provision.
  Mr. President, the bill I am introducing today is the product of 
years of consideration and the study by Congress and various experts in 
this field, including the International Trademark Association, formerly 
the United States Trademark Association. It would amend section 43 of 
the Trademark Act to add a new subsection (c) to provide protection 
against another's commercial use of a famous mark which results in the 
dilution of such mark. The bill defines the term ``dilution'' to mean 
``the lessening of the capacity of registrant's mark to identify and 
distinguish goods and services regardless of the presence or absence of 
(a) competition between the parties, or (b) likelihood of confusion, 
mistake, or deception.''

  The proposal adequately addresses legitimate first amendment concerns 
espoused by the broadcasting industry and the media. The bill will not 
prohibit or threaten noncommercial expression, such as parody, satire, 
editorial and other forms of expression that are not a part of a 
commercial transaction. The bill includes specific language exempting 
from liability the ``fair use'' of a mark in the context of comparative 
commercial advertising or promotion.
  The legislation sets forth a number of specific criteria in 
determining whether a mark has acquired the level of distinctiveness to 
be considered famous. These criteria include: First, the degree of 
inherent or acquired distinctiveness of the mark; second, the duration 
and extent of the use of the mark; and third, the geographical extent 
of the trading area in which the mark is used.
  With respect to remedies, the bill limits the relief a court could 
award to an injunction unless the wrongdoer willfully intended to trade 
on the registrant's reputation or to cause dilution, in which case 
other remedies under the Trademark Act become available. The ownership 
of a valid Federal registration would act as a complete bar to a 
dilution action brought under State law.
  Mr. President, the Judiciary Committee, which I chair, looks forward 
to working with all interested parties to secure enactment of a Federal 
dilution statute that adequately meets the needs of trademark owners 
and is consistent with the public interest.
  I ask unanimous consent that the text of the bill and a section-by-
section analysis be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                S. 1513

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Federal Trademark Dilution 
     Act of 1995''.

     SEC. 2. REFERENCE TO THE TRADEMARK ACT OF 1946.

       For purposes of this Act, the Act entitled `'An Act to 
     provide for the registration and protection of trademarks 
     used in commerce, to carry out the provisions of certain 
     international conventions, and for other purposes'', approved 
     July 5, 1946 (15 U.S.C. 1051 and following), shall be 
     referred to as the ``Trademark Act of 1946''.

     SEC. 3. REMEDIES FOR DILUTION OF FAMOUS MARKS.

       (A) Remedies.--Section 43 of the Trademark Act of 1946 (15 
     U.S.C. 1125) is amended by adding at the end the following 
     new subsection:
       ``(c)(1) The owner of a famous mark shall be entitled, 
     subject to the principles of equity and upon such terms as 
     the court deems reasonable, to an injunction against another 
     person's commercial use in commerce of a mark or trade name, 
     if such use begins after the mark becomes famous and causes 
     dilution of the distinctive quality of the famous mark, and 
     to obtain such other relief as is provided in this 
     subsection. In determining whether a mark is distinctive and 
     famous, a court may consider factors such as, but not limited 
     to--
       ``(A) the degree of inherent or acquired distinctiveness of 
     the mark;
       ``(B) the duration and extent of use of the mark in 
     connection with the goods or services with which the mark is 
     used;
       ``(C) the duration and extent of advertising and publicity 
     of the mark;
       ``(D) the geographical extent of the trading area in which 
     the mark is used;
       ``(E) the channels of trade for the goods or services with 
     which the mark is used;
       ``(F) the degree of recognition of the mark in the trading 
     areas and channels of trade of the mark's owner and the 
     person against whom the injunction is sought;
       ``(G) the nature and extent of use of the same or similar 
     marks by third parties; and
       ``(H) the existence of a registration under the Act of 
     March 3, 1881, or the Act of February 20, 1905, or on the 
     principal register.
       ``(2) In an action brought under this subsection, the owner 
     of a famous mark shall be entitled only to injunctive relief 
     unless the person against whom the injunction is sought 
     willfully intended to trade on the owner's reputation or to 
     cause dilution of the famous mark. If such willful intent is 
     proven, the owner of a famous mark shall also be entitled to 
     the remedies set forth in sections 35(a) and 36, subject to 
     the discretion of the court and the principles of equity.
       ``(3) The ownership by a person of a valid registration 
     under the Act of March 3, 1881, or the Act of February 20, 
     1905, or on the principal register shall be a complete bar to 
     an action against that person, with respect to that mark, 
     that is brought by another person under the common law or 
     statute of a State and that seeks to prevent dilution of the 
     distinctiveness of a mark, label, or form of advertisement.
       ``(4) The following shall not be actionable under this 
     section:
       ``(A) Fair use of a famous mark by another person in 
     comparative commercial advertising or promotion to identify 
     the competing goods or services of the owner of the famous 
     mark.
       ``(B) Noncommercial use of a mark.
       ``(C) All forms of news reporting and news commentary.''.
       
[[Page S19311]]

       (b) Conforming Amendment.--The heading for title VIII of 
     the Trademark Act of 1946 is amended by striking ``AND FALSE 
     DESCRIPTIONS'' and inserting ``FALSE DESCRIPTIONS, AND 
     DILUTION''.

     SEC. 4. DEFINITION.

       Section 45 of the Trademark Act of 1946 (15 U.S.C. 1127) is 
     amended by inserting after the paragraph defining when a mark 
     shall be deemed to be ``abandoned'' the following:
       ``The term `dilution' means the lessening of the capacity 
     of a famous mark to identify and distinguish goods or 
     services, regardless of the presence or absence of--
       ``(1) competition between the owner of the famous mark and 
     other parties, or
       ``(2) likelihood of confusion, mistake, or deception.''.

     SEC. 5. EFFECTIVE DATE.

       This Act and the amendments made by this Act shall take 
     effect on the date of the enactment of this Act.
                                                                    ____


 Section-by-Section Analysis of the Federal Trademark Dilution Act of 
                                  1995

       Section 1. Section one of the bill provides the short title 
     of the bill, the ``Federal Trademark Dilution Act of 1995.''
       Section 2. Section 2 of the bill clarifies the references 
     in the bill to the ``Trademark Act of 1946,'' giving the full 
     title of the law and statutory citations.
       Section 3. Section 3 of the bill would create a new Section 
     43 of the Lanham Act to provide a cause of action 
     for dilution of ``famous'' marks. A new Section 43(c)(1) 
     would provide protection to the owners of famous marks 
     against another person's commercial use in commerce of the 
     mark which dilutes the distinctive quality of the mark. The 
     section would provide protection to famous marks, whether or 
     not the mark is the subject of a federal trademark 
     registration.
       Section 3 identifies a list of nonexclusive factors that a 
     court may consider in determining whether a mark qualifies 
     for protection. These factors include: (1) the degree of 
     distinctiveness of the mark; (2) the duration and extent of 
     use of the mark; (3) the geographical extent of the trading 
     area in which the mark is used; and (4) whether the mark is 
     federally registered.
       With respect to relief, a new Section 43(c)(2) of the 
     Lanham Act would provide that, normally, the owner of a 
     famous mark will only be entitled to an injunction upon a 
     finding of liability. An award of damages, including the 
     possibility of treble damages, may be awarded upon a finding 
     that the defendant willfully intended to trade on the 
     trademark owner's reputation or to cause dilution of the 
     famous mark.
       Under section 3 of the bill, a new Section 43(c)(3) of the 
     Lanham Act would provide that ownership of a valid federal 
     trademark registration is a complete bar to an action brought 
     against the registrant under state dilution law. In this 
     regard, it is important to note that the proposed federal 
     dilution statute would not preempt state dilution laws.
       A new Section 43(c)(4) sets forth various activities that 
     would not be actionable. These activities include the use of 
     a famous mark for purposes of comparative advertising, the 
     noncommercial use of a famous mark, and the use of a famous 
     mark in the context of news reporting and news commentary. 
     This section is consistent with existing case law. The cases 
     recognize that the use of marks in certain forms of artistic 
     and expressive speech is protected by the First Amendment.
       Section 4. Section 4 of the bill defines the term 
     ``dilution'' to mean the lessening of the capacity of a 
     famous mark to identify and distinguish goods or services, 
     regardless of the presence or absence of (1) competition 
     between the owner of the famous mark and other parties, or 
     (2) likelihood of confusion, mistake, or deception. The 
     definition is designed to encompass all forms of dilution 
     recognized by the courts, including disparagement. In an 
     effort to clarify the law on the subject, the definition also 
     recognizes that a cause of action for dilution may exist 
     whether or not the parties market the same or related goods 
     and whether or not likelihood of confusion exists.
       Section 5. Section 5 of the bill makes the legislation 
     effective upon enactment.

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