Demystifying Dilution

The article examines a legal theory that has plagued courts and commentators for decades on issues that cut to the core of the elusive definition of dilution and the method of its proof. I argue that the principal source of the theoretical conflict over dilution is the pervasive conception of it as a sort of mystical construct that depends for its logical coherence on some external limiting principle. In refuting this notion, I show that dilution shares an important feature in common with the traditional consumer confusion standard of trademark infringement: both require an inherent quantitative weighing of the probable extent to which the junior trademark may interfere with the senior mark. The article shows that once this probabilistic dimension of dilution is forthrightly acknowledged, much of the theoretical tangle in dilution law can be unraveled. My analysis also uncovers a latent paradox in the Supreme Court's decision last term in Moseley v. V. Secret Catalogue. Although Moseley adopted the "actual dilution" standard over the competing "likelihood of dilution" formulation, I show that any evaluation of dilution necessarily requires a consideration of its probability, even if an express inquiry into its likelihood is paradoxically prohibited. As I demonstrate at some length, an express acknowledgment of this probabilistic inquiry sets the stage for a straightforward resolution of much of the theoretical tension in dilution law. After offering a more complete description of the evolution of the controversy surrounding trademark dilution theory culminating in Moseley (in Section I), I turn to a reconsideration of the theory's basic definitional premise (in Section II). Here, I explore the concept of dilution as it relates to the notions of mental association, consumer confusion, and selling power--concepts whose relation to dilution theory has long confounded the courts and commentators and was given only passing treatment by the Court in Moseley. In so doing, I conclude that an evaluation of dilution, properly conceived, necessarily requires a consideration of its probability. Dilution, after all, is not a binary phenomenon whose objective existence can be shown in "actual" fact; it is an inherently probabilistic notion that can be evaluated only in terms of its subjective degrees. An open acknowledgement of this probabilistic dimension of trademark dilution is an important step toward resolving the decades-old debate over the fundamentals of dilution law. Once dilution is demystified and placed in the broader context of the probability inquiry that has long been undertaken in traditional trademark infringement cases, many of the longstanding puzzles in dilution law may be unraveled. A parallel demystification lies at the heart of my resolution of the question of the method of proving dilution (in Section III). In recent months, courts and commentators have scrambled to read the Moseley tea leaves on this issue, and the emerging majority view seems to be that direct evidence of dilution is generally required (except perhaps in cases of identical marks) and that the circumstantial factors relevant to the likelihood of consumer confusion have no application in the dilution context. This approach is misguided, however, and the problem again stems from a misperception of dilution as an indecipherable construct, and from the failure to treat the evidentiary proof question within the mainstream of the law of evidence and in the context of parallel evidentiary issues that arise in traditional infringement cases. When the proof question is evaluated in this broader context, it becomes apparent that there can be no categorical exclusion of evidence on the basis of its "circumstantial" nature. Any proffered item of evidence must be evaluated on the basis of its impact on the extent of dilution of the famous mark, not whether it may be labeled "direct" or "circumstantial. " This is the approach that has been embraced across the broad spectrum of cases that have come before the courts (including in traditional infringement cases), and there is nothing so mystical about dilution that would call for a different approach. For the most part, I conclude that the circumstantial factors considered under the likelihood of confusion standard are relevant, in the sense that they tend to have some effect on the probability that a junior trademark will dilute the distinctive quality of the senior mark. In reaching this conclusion, I uncover a further dimension of the paradox inherent in the Moseley decision--that the question of the admissibility of dilution evidence requires an evaluation of the basis of its impact, if any, on the probability of trademark dilution, even if, after Moseley, the inquiry must proceed without explicit reference to its likelihood.