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. e du/thir dc ir c uit_2000/86Filed April 28, 2000

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

No. 99-1299

TIMES MIRROR MAGAZINES, INC.

v.

LAS VEGAS SPORTS NEWS, L.L.C., d/b/a LAS VEGAS SPORTING NEWS, Appellant.

On Appeal from the United States District Court for the Eastern District of Pennsylvania (D.C. No. 98-cv-05768) District Judge: Honorable Bruce W. Kauffman

Argued: January 13, 2000

Before: Alito, Barry and Aldisert, Circuit Judges.

(Filed: April 28, 2000)

Malcolm J. Gross (Argued) Gross, McGinley, LaBarre & Eaton Allentown, PA Attorney for Appellee

Diane S. Danoff (Argued) Dechert, Price & Rhoads Philadelphia, PA Attorney for AppellantOPINION OF THE COURT

ALDISERT, Circuit Judge.

The issue on appeal is whether the district court e rred by preliminarily enjoining Las Vegas Sports News, L.L. C., d/b/a Las Vegas Sporting News ("LVSN"), from using the phrase "Sporting News" in connection with its weekl y sports-betting publication under the Federal Tradem ark Dilution Act of 1995, 15 U.S.C. S 1125(c) ("FTDA" o r "Act"). The district court concluded that Times Mirror Maga zines Inc., owner of the federally registered mark "The S porting News," was likely to succeed on the merits of its d ilution claim against LVSN, because the mark was "famous" i n its niche market and LVSN's use of the title Las Vegas Sporting News on its publication diluted the Times Mirror's mark by blurring its distinctiveness.

The district court had jurisdiction over the diluti on claims pursuant to 15 U.S.C. S 1121(a) and 28 U.S.C

. S 1338. We have jurisdiction pursuant to 28 U.S.C. S 1292(a)(1). This appeal by LVSN was timelyfiled u nder Rule 4, Federal Rules of Appellate Procedure.

LVSN contends that the district court erred by gran ting Times Mirror preliminary injunctive relief because Times

Mirror failed to establish a likelihood of success on the merits of its dilution claim or immediate irreparab le harm. We must decide whether the district court erred by holding that (a) the mark "The Sporting News" was famous in the sports periodicals market; (b) LVSN's use diluted t he strength of Times Mirror's mark by blurring its distinctiveness and (c) Times Mirror's 15-month del ay in bringing suit did not preclude a finding that LVSN' s use would immediately cause irreparable harm to Times M irror.

In reviewing the grant or denial of a preliminary injunction, we consider the following:

1. The law has entrusted the power to grant or dissolve an injunction to the discretion of the trial court in the first instance, and not to the appellate

court.

22. Unless the trial court abuses that discre tion,

commits an obvious error in applying the law or makes a serious mistake in considering proof , the appellate court must take the judgment of th e trial court as presumptively correct.

3. This limited review is necessitated becau se the grant or denial is almost always based on an abbreviated set of facts, requiring a delica te balancing of the probabilities of ultimate s uccess at final hearing with the consequences of immed iate irreparable injury which could possibly flow from the denial of preliminary relief.

4. In exercising its limited review of the g rant or denial of preliminary injunctive relief, the appellate court asks: (a) Did the movant make a strong showing that it is likely to prevail on the merits? (b) Did the movant show that, without such relie f, it would be irreparably injured? (c) Would the grant of a preliminary injunction substantially ha ve harmed other parties interested in the proce edings? (d) Where lies the public interest?

5. The applicant for a preliminary injunctio n bears the burden of establishing that a right to s uch injunctive relief and that irreparable injur y will result to him of it is not granted. Moreover , we have emphasized the elementary principle tha t a preliminary injunction shall not issue excep t under a showing of irreparable injury.

A.O. Smith Corp. v. FTC, 530 F.2d 515, 525 (3d Cir. 1976); see Loretangeli v. Critelli, 853 F.2d 186, 193 (3d Cir. 1988).

I.

In 1886, the phrase "The Sporting News" was granted federal trademark registration and since that time has been the banner headline on a weekly publication, entitl ed The Sporting News. The mark's present owner, Times Mirr or Magazines, Inc., publishes The Sporting News and op erates an internet website devoted to its publication at <http://www.sportingnews.com>.

3The Sporting News provides its readers with informa tion

on baseball, basketball, football and hockey, and h as a weekly circulation of approximately 540,000 in the United States and Canada. The Sporting News does not provi de any information on gambling, because Times Mirror "believe[s] that there is a portion of the populati on that is adamantly opposed to gambling and that they would n ot look favorably on any of [its] products if they tho ught [the magazine was] promoting gambling in any way." D. Ct . Op. at 2 (alteration in original). The magazine is adve rtised on television, in direct mail solicitations, in promot ions and occasionally on the radio. It is typically sold for $2.99, but nine special content issues are sold each year for $3.99. Over the last several years, Times Mirror has inves ted millions of dollars in The Sporting News in an atte mpt to improve the quality of its magazine and to increase readership.

LVSN publishes Las Vegas Sporting News, which contains articles, editorials and advertisements on sports wagering "for the sports gaming enthusiasts or indi viduals that like to take a risk." App. at 41 (Testimony of LVSN publisher, Dennis Atiyeh). Las Vegas Sporting News is published 45 times a year and generally has a circu lation of 42,000, but some special editions have had a cir culation of up to 100,000. The publication is sold for $2.99 at several hundred newsstands across the country, but most copies are given away in gambling casinos free of c harge.

In 1997, LVSN publisher Dennis Atiyeh changed the name of his publication from Las Vegas Sports News to Las Vegas Sporting News. The publisher says that he cha nged the publication's title for two reasons: (1) the pr evious publisher of Las Vegas Sports News had a poor reput ation, having fallen into disrepute with gambling casinos and (2) the term "sporting" more accurately reflected the publication's content, because the publication was a"sports gaming" publication, and not purely a "sports publi cation." D. Ct. Op. at 3. Atiyeh admits that at the time he changed the name of his publication, he was familiar with T imes Mirror's publication The Sporting News. Since the 1 997 name change to Las Vegas Sporting News, circulation of the publication has increased, but not substantially.

4Times Mirror first learned that LVSN was publishing Las

Vegas Sporting News in August 1997. On September 24

, 1997, Times Mirror sent LVSN a cease and desist let ter, which read in part:

It has recently come to my attention that y our company is marketing a sports magazine entit led Las Vegas Sporting News. Apparently, this is a r elatively recent change, since the masthead page of yo ur magazine makes reference to Las Vegas Sports News, stating, in part, that, "Las Vegas Sports Ne ws . . . is published weekly . . . ."

. . . . It would appear that your company i s attempting to unlawfully appropriate the goo d will that is associated with our federally registered trademark.

In view of the likelihood of consumer confu sion, we hereby demand that you (1) immediately cease and desist from any further use of the term "Las Vegas Sporting News," and (2) select a name to ide ntify your product that is not confusingly similar to o ur "The Sporting News" trademark.

App. at 263-264 (citations omitted).

LVSN had not ceased using the phrase "Sporting News " in connection with its weekly publication. In Octob er 1998, after settlement negotiations between Times Mirror and LVSN proved unsuccessful, Times Mirror retained Gle nn Hauze, a private investigator in Pennsylvania, "to gain as much information as possible regarding the availabi lity of the Las Vegas Sporting News," in anticipation of li tigation. App. at 31. Hauze began his investigation by visiti ng three newsstands in or around Lehigh Valley, Pennsylvania . The first newsstand he visited was in Plumsteadville, a nd it carried both The Sporting News and Las Vegas Sporti ng News. Las Vegas Sporting News "was up on the shelf with the other sporting magazines," but The Sporting New s "was down amongst the tabloids." D. Ct. Op. at 6. The fo llowing day, Hauze found copies of Las Vegas Sporting News for sale at newsstands in Allentown and Quakerville. At the Allentown newsstand, Las Vegas Sporting News and Th e Sporting News were displayed within inches of each other in

5a bay window in front of the store, along with a la rge

number of other sporting type publications.

John Kastberg, vice-president of Times Mirror's The Sporting News, conducted his own investigation in December 1998, during which he visited three newsst ands in New York City:

I went to a newsstand in Penn Station which is a train terminal in New York, I went to Barnes & Nob le in New

York and I went to a newsstand in Grand Cent ral

Terminal which is another train station in N ew York. . . . [W]hen I went to Penn Station I asked the guy "Do you have the Las Vegas Sporting News," and h e handed me the Times Mirror Sporting News. . . . I went to the Barnes & Noble, asked the same questi on, got Times Mirror Sporting News and the same thin g happened at Grand Central. All three times I was handed the Times Mirror Sporting News when I asked for Las Vegas Sporting News.

App. at 24-25.

Two weeks after Hauze's investigation, Times Mirror filed a complaint in district court, charging LVSN with i nfringing Times Mirror's registered mark in violation of sect ion 32 of the Lanham Act, 15 U.S.C. S 1114(1); with false des ignation of origin in violation of section 43(a) of the Lanh am Act, 15 U.S.C. S 1125(a); with trademark dilution in violat ion of section 43(c) of the Lanham Act, 15 U.S.C. S 1125(c ); and with common law unfair competition and infringement

.

On December 3, 1998, both parties participated in a n evidentiary hearing on Times Mirror's motion for a preliminary injunction, in which it sought to enjoi n LVSN from using the phrase "Sporting News" on its public ation. In its March 4, 1999 Order and Memorandum Opinion, the

district court concluded that Times Mirror was like ly to

succeed on the merits of its federal trademark dilu tion claim and consequently granted Times Mirror's reque st for a preliminary injunction, thereby enjoining LVSN fr om using the phrase "Sporting News" in connection with its weekly publication. The district court granted the preliminary injunction solely on trademark dilution by blurring grounds and did not consider Times Mirror' s other

6claims. The parties subsequently agreed inter alia that the

preliminary injunction would be stayed pending appe al to

this court.

II.

The Federal Trademark Dilution Act of 1995 provides :

The owner of a famous mark shall be entitle d, subject to the principles of equity and upon such terms as the court deems reasonable, to an injunct ion against another person's commercial use in c ommerce of a mark or trade name, if such use begins after the

mark has become famous and causes dilution o f the distinctive quality of the mark, and to obta in such other relief as is provided in this subsecti on.

15 U.S.C. S 1125(c)(1).

The federal cause of action for trademark dilution grants extra protection to strong, well-recognized marks e ven in

the absence of a likelihood of consumer confusion-- the classical test for trademark infringement--if the d efendant's use diminishes or dilutes the strong identification value associated with the plaintiff 's famous mark. 4 McC arthy on Trademarks and Unfair Competition S 24:70 (4th ed. 1997). The dilution doctrine is founded upon the premise t hat a gradual attenuation of the value of a famous tradem ark, resulting from another's unauthorized use, constitu tes an invasion of the senior user's property rights in it s mark and gives rise to an independent commercial tort for tr ademark

dilution. Id.

To establish a prima facie claim for relief under t he federal dilution act, the plaintiff must plead and prove:

1. The plaintiff is the owner of a mark that qualifies as a "famous" mark in light of the totality of the eight factors listed in S 1125(c)(a),

2. The defendant is making commercial use in interstate commerce of a mark or trade name,

3. Defendant's use began after the plaintiff 's mark became famous, and

74. Defendant's use causes dilution by lessen ing the

capacity of the plaintiff 's mark to identif y and distinguish goods or services.

See 4 McCarthy, supra, S 24:89; see also Hershey Fo ods Corp. v. Mars, Inc., 998 F. Supp. 500, 504 (M.D. Pa . 1998) (quoting 4 McCarthy, supra). A court may consider t he following eight non-exclusive factors in determinin g the

famousness vel non of a mark:

(A) the degree of inherent or acquired dist inc tiveness of the mark;

(B) the duration and extent of use of the m ark in connection with the goods or services with w hich the mark is used;

(C) the duration and extent of advertising and publicity of the mark;

(D) the geographical extent of the trading are a in which the mark is used;

(E) the channels of trade for the goods and se rvices with which the mark is used;

(F) the degree of recognition of the mark i n t he trading areas and channels of trade used by the marks' owner and the person against whom the injunction is sought;

(G) the nature and extent of use of the sam e o r similar marks by third parties; and

(H) whether the mark was registered under t he Act of March 3, 1881, or the Act of February 20, 19 05, or on the principal register.

15 U.S.C. S 1125(c)(1)(A)-(H).

The district court held Times Mirror established a

likelihood of success on the merits of its federal dilution claim against LVSN, because (1) Times Mirror's mark "The Sporting News" was famous; (2) LVSN made commercial use in interstate commerce of the name "Las Vegas Sport ing News"; (3) Times Mirror's mark became famous before LVSN began using the name "Las Vegas Sporting News" and (4) LVSN's use of that name diluted the strength of"The

8Sporting News" mark. Because Appellant only challen ges

the first and last prongs of Times Mirror's prima f acie claim for dilution, we focus our attention on the distric t court's findings that "The Sporting News" is a famous mark under the Act and that LVSN's use diluted the strength of Times

Mirror's mark.

III.

LVSN argues that the district court erred in granti ng Times Mirror a preliminary injunction because its m ark "The Sporting News" is not famous and because the c ourt did not make a separate finding as to the distincti veness of

Times Mirror's trademark.

A.

Appellant contends that "The Sporting News" cannot be

famous under the Act because it is not famous to th e general public, and "substantial case law indicates that marks famous in a specialized market, rather than w ellknown to the general public, should not be consider ed `famous' under the federal dilution statute." Appel lant Br. at 23 (citing Washington Speakers Bureau, Inc. v. L eading Authorities, Inc., 33 F. Supp.2d 488, 503 (E.D. Va. 1999)). However, in the case Appellant cites for its theory , the court did not specifically adopt or reject a niche market theory for fame. See Washington Speakers Bureau, Inc., 33 F. S upp.2d at 503 ("In the instant case, it is ultimately unne cessary to resolve this still-unsettled question, since even i f fame in a

niche market were sufficient to establish fame unde r the Act, consideration of the statutory factors reveals that [the plaintiff] has failed to make even this demonstrati on."). Thus, this case is not particularly helpful to our analysis.

We recognize that not all courts' decisions have be en precise in addressing the question whether a mark c an be famous in a niche market. The Court of Appeals for the

Seventh Circuit has addressed the niche market deba te:

At an initial glance, there appears to be a wide variation on this issue [of whether a mark f amous in a niche market is entitled to protection under the FTDA].

9Some cases apparently hold that fame in a ni che

market is insufficient for a federal dilutio n claim, while

some hold that such fame is sufficient. Howe ver, a closer look indicates that the different lin es of authority are addressing two different contexts. Cases holding that niche-market fame is insufficient gener ally address the context in which the plaintiff a nd defendant are using the mark in separate mar kets. On the other hand, cases stating that niche-mar ket renown is a factor indicating fame address a context . . . in which the plaintiff and defendant a re using the

mark in the same or related markets.

Syndicate Sales, Inc. v. Hampshire Paper Corp. , 19 2 F.3d 633, 640 (7th Cir. 1999) (internal footnotes omitte d); see also Nabisco, Inc. v. PF Brands, Inc., 191 F.3d 208 , 222 (2d Cir. 1999) ("[D]ilution can occur where the[defenda nt's] use competes directly with the [plaintiff 's] as well a s where the [defendant] is in a non-competing market. In genera l, the closer the products are to one another [in the mark etplace], the greater the likelihood of both confusion and di lution.").

The Restatement (Third) of Unfair Competition lends further support to the theory that niche market fam e is sufficient to protect a mark from dilution within t hat

market:

A mark that is highly distinctive only to a select class or group of purchasers may be protected from diluting uses directed at that particular class or gr oup. For example, a mark may be highly distinctive am ong purchasers of a specific type of product. In such circumstances, protection against a dilution of the mark's distinctiveness is ordinarily appropr iate only against uses specifically directed at that p articular class of purchasers . . . .

Restatement (Third) of Unfair Competition S 25 cmt. e (1995 Main Vol.); see 4 McCarthy, supra,S 24:112. We are persuaded that a mark not famous to the general pub lic is nevertheless entitled to protection from dilution w here both the plaintiff and defendant are operating in the sa me or related markets, so long as the plaintiff 's mark p ossesses a high degree of fame in its niche market.

10The district court determined that Times Mirror and

LVSN competed in the same, or at least significantl y related, markets--namely, the sports periodicals ma rket. LVSN contends that its readers, who essentially are interested in wagering on sports, are distinct from the readers of The Sporting News, who are interested in sports generally. We find such a distinction to be without merit. Surely many, if not the vast majority, of those ind ividuals who gamble on sports in Las Vegas also follow the s ports on which they are wagering. We conclude therefore t hat the district court did not err by finding that LVSN and Times

Mirror shared a common market. Because a mark can b e famous in a niche market where the mark has a high degree of distinctiveness within the market and whe re the plaintiff and defendant operate within or along sid e that market, we hold that the district court did not com mit an obvious error by holding that the mark "The Sportin g News" was famous in its niche and therefore entitled to p rotection under the FTDA against LVSN's use of a similar mark in

the same market.

B.

LVSN also argues that "The Sporting News" is not fa mous because it is merely a descriptive mark and does no t satisfy the eight statutory factors for fame listed in 15 U .S.C. S 1125(c)(1)(A)-(H). Because Appellant disputes the district court's factual findings with regard to fame and it s application of the S 1125(c)(1) fame factors, we re view each factor of the district court's analysis and will no t reverse

unless the district court committed an obvious erro r in applying the law or made a serious mistake in consi dering the proof presented. See A.O. Smith, 530 F.2d at 52 5.

The district court concluded that "The Sporting New s" mark was famous under S 1125(c)(1) for the followin g

reasons:

First, "The Sporting News" is a federally re gistered trademark. Because a mark does not qualify f or federal trademark registration unless it is distinct ive, see 15 U.S.C. S 1052, federal registration goes a l ong way toward proving that the mark has inherent or acquired

11distinctiveness. Second, "The Sporting News" has been

used on the magazine's banner headline since 1886. Third, The Sporting News is advertised on te levision, in direct mail solicitations and promotions, an d, occasionally, on the radio. In recent years, Times Mirror has spent millions of dollars improvi ng the magazine. Fourth and finally, Times Mirror u ses"The Sporting News" trademark throughout the Unit ed

States and Canada and on the internet.

D. Ct. Op. at 8-9 (internal quotation marks, footno tes and citations omitted). We now review the district cour t's analysis of the famousness of the mark "The Sportin g News" and its application of the eight non-exclusiv e statutory factors for famousness set forth in Part II, supra.

1.

Applying the first factor under 15 U.S.C. S 1125(c) (1), the district court determined that "The Sporting News" had a high degree of distinctiveness in the sports period icals market. Although the district court did not elabora te on this finding, its factual conclusion was not errone ous.

The degree of acquired or inherent distinctiveness of a mark bears directly upon the issue of whether that mark is famous. See 15 U.S.C. S 1125(c)(1)(A). The mark "Th e Sporting News" is not inherently fanciful or creati ve, and thus the mark does not have a high degree of inhere nt distinctiveness. We must therefore examine the degr ee to which the mark has acquired distinctiveness by gain ing secondary meaning over time in the marketplace. To determine whether a trademark has acquired distinctiveness by the attachment of secondary mean ing, we examine the following considerations: (1) the le ngth or exclusivity of use of the mark; (2) the size or pro minence of the plaintiff 's enterprise; (3) the existence of s ubstantial advertising by the plaintiff; (4) established place in the market and (5) proof of intentional copying. I.P. L und Trading v. Kohler Co., 163 F.3d 27, 42 (1st Cir. 19 98). The district court concluded that "The Sporting News," although not a fanciful or arbitrary trademark, has acquired secondary meaning, and thus distinctiveness in the sports

12periodicals market, because it has been used in com merce

since 1886 and because Times Mirror has expended millions of dollars in advertising and promoting th eir mark through various media outlets. Times Mirror present ed evidence to support several of the considerations f or acquired distinctiveness set forth in I.P. Lund . W e therefore conclude that the district court did not err byfind ing that "The Sporting News" had gained secondary meaning an d a high degree of distinctiveness in its market.

2.

The district court also found that the second statu tory

factor--extent and duration of use of the mark--wei ghed in favor of finding the mark famous, because The Sport ing News has been continuously published since 1886. Se e S 1125(c)(1)(B). We find that the district court di d not err in this respect.

3.

The district court found that the third statutory f actor-- extent and duration of advertising--weighed in favo r of finding the mark famous, because Times Mirror prese nted credible proof of extensive advertising and additio nal publicity from the Internet. See S 1125(c)(1)(C). H ere, too,

the district court did not err.

4.

The fourth factor is the geographical extent of the trading area in which the mark is used. See S 1125(c)(1)(D) . Since 1886, The Sporting News has grown to a circulation of over 540,000 in both Canada and the United States, as we ll as

a recent internet site. The district court found th is evidence supported a finding that the mark was famous and we will

not disturb it.

5.

The fifth and sixth factors for fame are the degree s of recognition of the mark in its channels of trade an d the

13degree of recognition of the mark in the trading ar eas, see

S 1125(c)(1)(E)-(F), and the seventh factor is the nature and extent of the use of a same or similar mark by thir d parties, see S 1125(c)(1)(G). The district court did not exp licitly address these factors in its opinion. Nevertheless, the FTDA does not require that courts strictly apply every f actor in the statute. See S 1125(c)(1) (providing that "a co urt may consider factors such as, but not limited to") (emp hasis added). It was not an abuse of its discretion for t he court to omit explicit discussion of these factors in its analysis, because the majority of the other fame factors weig hed in favor of finding the mark famous.

6.

Finally, the district court determined that the eig hth factor--whether the mark was registered--favored Ti mes Mirror, because "The Sporting News" was registered in 1886. See S 1125(c)(1)(H).

Accordingly, we hold that the district court did no t err by concluding that "The Sporting News" mark was famous in the sports periodicals market.

IV.

As a final argument against the district court'sfin ding that "The Sporting News" mark was famous, LVSN cont ends that S 1125(c)(1) requires that a mark be subject t o a test for fame and a separate test for distinctiveness un der the FTDA. Although some courts agree with Appellant's contention,1 we are persuaded that this interpretat ion is inconsistent with the language and construction of the

statute.

To be sure, S 1125(c)(1) does state that a court ma y consider eight statutory factors, among others,"[i] n determining whether a mark is distinctive and famou s." 15

___________________________________________________ ______________

1. See, e.g., Nabisco, Inc. v. PF Brands, Inc., 191 F.3d 208, 216 n.2 (2d Cir. 1999) ("McCarthy's treatise contends that the statute does not include an independent requirement of distinctivene ss. . . . We disagree.")

14U.S.C. S 1125(c)(1) (emphasis added). We believe, h owever,

that "distinctiveness" as used in S 1125(c)(1) is o nly a synonym for "fame." Any other reading of the statut ory language will result in the statute being redundant because the first statutory factor for fame is "the degree of inherent or acquired distinctiveness" of the mark. See S 11 25(c)(1)(A); see also 4 McCarthy, supra, S 24:91 ("[T]here is . . . no separate statutory requirement of `distinctiveness, ' apart from a finding that the designation be a `mark' tha t is `famous.' `Distinctiveness' is used here only as a synonym for `fame.' ").2 If a mark is famous, then it is pr esumed distinctive. See Viacom, Inc. v. Ingram Enterprises , Inc., 141 F.3d 886, 890 n.6 (8th Cir. 1998). We conclude that there is no separate statutory requirement of distinctive ness apart from a finding of fame.

V.

LVSN argues also it was obvious error for the distr ict court to apply Judge Sweet's test for "dilution by blurring" found in Mead Data Central, Inc. v. Toyota Motor Sa les, Inc., 875 F.2d 1026, 1035 (2d Cir. 1989) (Sweet, J., conc urring).

Before discussing the mechanics of Judge Sweet's Me ad Data test for dilution, we first explain how tradem ark

dilution can occur. A trademark can be diluted two different ways: by blurring or by tarnishment. Only dilution by blurring is at issue in this appeal. "Blurring" in this context means "to make dim, indistinct or indefinit e." Webster's Third New International Dictionary 243 (1 968). Blurring occurs when the defendant's use of its mar k causes the public to no longer associate the plaint iff 's famous mark with its goods or services; the public instead begins associating both the plaintiff and the defen dant with the famous mark. See I.P. Lund, 163 F.3d at 47-48; 4

___________________________________________________ ______________

2. The Trademark Review Commission Report, the impe tus behind the FTDA, stated: "The same type of evidence which is t raditionally used to prove distinctiveness can be used to prove fame. Al though the registrant is not required to prove distinctiveness apart from the import of registration, any additional evidence of distinctiv eness will ordinarily

be entitled to substantial weight." Report of the Trad emark Review Commission, 77 Trademark Rep. 375, 459-460 (1987).

15McCarthy, supra, S 24:70. Dilution by blurring take s place

when the defendant's use of its mark causes the ide ntifying features of the plaintiff 's famous mark to become vague and less distinctive. To prove dilution by blurring , the owner of a famous mark must prove that the capacity of its mark to continue to be strong and famous would be endangered by the defendant's use of its mark. See 4 McCarthy, supra, S 29:94.

To determine whether LVSN's use blurred, and theref ore diluted, Times Mirror's mark for "The Sporting News ," the district court applied the dilution factors set for th in Judge

Sweet's concurrence in Mead Data:

1. similarity of the marks

2. similarity of the products covered by the marks

3. sophistication of consumers

4. predatory intent

5. renown of the senior mark

6. renown of the junior mark

Mead Data, 875 F.2d at 1035 (Sweet, J., concurring) ; see D. Ct. Op. at 10-11.

Several courts and commentators have criticized Jud ge Sweet's dilution test as the offspring of classical likelihood of confusion analysis and not particularly relevant or helpful in resolving issues of dilution by blurring . See, e.g., 4 McCarthy, supra, S 24:94.1; see also, e.g., I.P. Lund, 163 F.3d at 49-50 (reiterating the criticisms of Judge Sweet's dilution by blurring test). Instead of outright rej ection of the Sweet factors, most courts have improved upon the t est's shortcomings by supplementing the Sweet test with o ther considerations more pertinent to the issue of dilut ion. See, e.g., Nabisco, 191 F.3d at 227 ("We think it would be a

serious mistake at the outset of our consideration of the

new federal antidilution statute to limit ourselves to these six factors or to any other putatively definitive l ist."). In Nabisco, the Court of Appeals for the Second Circui t articulated a more complete set of factors for dilu tion by blurring, including

16actual confusion and likelihood of confusion , shared

customers and geographic isolation, the adje ctival quality of the junior use, and the interrela ted factors of duration of the junior use, harm to the juni or user, and delay by the senior user in bringing the action.

Id. at 228. Because we consider the dilution analys is in Nabisco helpful, we apply it to facts found by the district

court.

The district court concluded that

[t]his criticism [of Judge Sweet's dilution test] notwithstanding, blurring sufficient to cons titute dilution requires a case-by-case factual inq uiry, and in this case, the Court finds that the Sweet fa ctors are useful in evaluating the likelihood that LVS N's use of Las Vegas Sporting News lessens the capacity of The Sporting News to identify and distinguish Ti mes Mirror's goods or services.

D. Ct. Op. at 11-12 (internal quotation marks and c itations omitted). Applying the Sweet factors, the district court concluded that Times Mirror was likely to prevail o n its dilution claim based on the following facts:

First, the two marks are similar. Not only d o the two marks use dominant identical words, i.e., th e words "Sporting News," but they both print those w ords in red lettering on a single line that spans ho rizontally across the publication's cover, which genera lly features a well-known sports figure. Las Vegas Sporti ng News and The Sporting News use different type sty les, and

LVSN outlines its mark in black whereas Time s Mirror

outlines its mark in black and white. The le ttering thus is distinguishable, but similar nevertheless . Second,

both LVSN and Times Mirror use their mark to cover a weekly publication. Third, the undisputed te stimony indicated that consumers do not purchase [th ese] publications in a sophisticated manner, but tend to select their purchase on "impulse," largely based on the publication cover rather than the conten t. Fourth, the similarity of the marks and their placem ent on the publication cover might be coincidental, but the evidence showed that the publisher of Las Ve gas

17Sporting News was aware of The Sporting News at the

time he changed the name of his periodical. Finally, The Sporting News is well known, whereas Las Vegas Sporting News is not.

D. Ct. Op. at 12-13. We hold that the district cour t did not make an obvious error in applying these facts to Ju dge Sweet's factors. Although the district court applie d Judge Sweet's test and did not explicitly adopt the Nabis co factors or any other supplemental dilution factors, our app lication of the Nabisco dilution factors to the facts suppor ts the

district court's conclusion that LVSN diluted "The Sporting News" mark by blurring its distinctive qualities.

Actual confusion has been shown to exist among thos e selling the two publications, even though no consum er surveys were submitted to the district court during the preliminary injunction hearing. The evidence presen ted at the hearing supports the finding that a strong like lihood of confusion is present, because LVSN's mark and publi cation cover are very similar to Times Mirror's mark and t he cover of The Sporting News. Sufficient evidence supports a finding that customers who purchase these sports publicatio ns are "unsophisticated consumers," because they often buy on impulse and because the publications are relatively inexpensive. Unsophisticated buyers lack the

discrimination and "are more vulnerable to confusio n, mistake and misassociations against which the trade mark protects." Nabisco, 191 F.3d at 220. Furthermore, L VSN

has a short duration of use because its first use o f its new publication name was in 1997.

Finally, Times Mirror did not unreasonably delay in brining an action against LVSN. Times Mirror first discovered the publication Las Vegas Sporting News in August 1997. One month later, Times Mirror sent LVS N a cease and desist letter, thereupon triggering a ser ies of correspondence and negotiations between the parties

. Times Mirror's delay was attributable to its belief that LVSN would change the name of its publication. Once negotiations failed, Times Mirror filed suit. Thus, Times Mirror did not unduly delay filing an action agains t LVSN.

After weighing the dilution factors from Judge Swee t's Mead Data concurrence as supplemented by the Nabisc o

18analysis, we conclude that the district court did n ot err by

finding that Times Mirror was likely to prevail on the merits

of its dilution claim.

VI.

LVSN contends also that the district court erred by granting the preliminary injunction, because Times Mirror failed to show that it would suffer irreparable har m if the injunction was not issued. On this point, the distr ict court

stated:

In the trademark context, irreparable harm may be shown even in the absence of actual injury t o plaintiff 's business based on plaintiff 's demonstration

of a likelihood of success on the merits of its claim. The

Court therefore finds that in the absence of an injunction, Times Mirror will suffer irrepar able harm.

D. Ct. Op. at 13-14 (internal quotation marks and c itations omitted).

We have held that a lack of control over the use of one's own mark amounts to irreparable harm. See Opticians Ass'n v. Independent Opticians, 920 F.2d 187, 195 ( 3d Cir. 1990) (stating that potential damage to a mark hold er's reputation or goodwill or likely confusion between parties' marks constitute irreparable injury for the purpose of granting a preliminary injunction). LVSN argues tha t the 15-month delay, beginning when Times Mirror was on notice of the new name of LVSN's publication and en ding when Times Mirror filed suit against LVSN, necessar ily shows that Times Mirror's injury, if any, is not im mediate and irreparable. This argument does not persuade us

, because the 15-month delay was attributable to negotiations between the parties. We conclude that the district court did not err by determining that Time s Mirror would be irreparably harmed if the preliminary inju nction

did not issue.

* * *

We have also considered Appellant's contentions tha t the district court erred by determining that the benefi ts from

19preliminary injunctive relief outweighed the injury such

relief would cause LVSN and that the public interes t would be served by granting Times Mirror's motion for a preliminary injunction. Neither contention has suff icient

merit to warrant further discussion.

The judgment of the district court will be affirmed

.

20BARRY, Circuit Judge, Dissenting.

How famous a mark must be before it can be afforded protection under the Federal Trademark Dilution Act ("FTDA") is a question of first impression in this Circuit, a question which implicates the expansion of trademar k rights under the Lanham Act and one which has recei ved much judicial attention elsewhere since the passage of the FTDA. The correct answer to this question is of cri tical importance in order that an appropriate balance bet ween free competition and property rights be maintained. 1 The majority holds that the District Court did not err in finding that "The Sporting News" mark was sufficiently famo us to merit protection under the FTDA. Because I conclude that Times Mirror has not shown and, in my view, cannot show that it is likely to satisfy the threshold fame req uirement, I respectfully dissent.

I.

Fame means FAME

The FTDA offers little guidance as to what is requi red to find a mark famous. Thus, courts must rely on legis lative history and, where helpful, look to dilution theory which has developed over years of judicial interpretation of state anti-dilution statutes. Dilution theory in the Unit ed States

emanated from a 1927 Harvard Law Review article whi ch posited that protection against dilution would fill the gap in trademark law left by infringement theory which onl y provided protection when a junior user applied a deceptively similar mark to similar goods to confus e a competitor's consumers about the source of the good s. See

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1. Commentators have warned that expansion of a dil ution cause of action could harm competition. See, e.g. , Mark A. Lemley, The Modern Lanham Act and the Death of Common Sense, 108 Yale L. J. 1687 (May 1999); Glynn S. Lunney, Jr., Trademark Monopolies, 48 Emory L. J. 367 (Spring 1999); William Marroletti, Dilution, Confus ion, or Delusion? The

Need for a Clear International Standard to Determin e Trademark Dilution, 25 Brook. J. Int'l L. 659 (1999); Robert N. Klieger , Trademark Dilution: The Whittling Away of the Rational Basis for Tradem ark Protection, 58 U. Pitt. L. Rev. 789 (Summer 1997).

21Frank I. Schechter, The Rational Basis of Trademark

Protection, 40 Harv. L. Rev. 813, 825 (1927). In th e absence of a dilution cause of action, trademark law was un able to protect mark owners from the unauthorized use of a deceptively similar mark placed upon dissimilar or noncompeting goods. Before passage of the FTDA, state antidilution statutes attempted to fill this gap in tra demark law. However, because truly famous marks -- and"tru ly" will become the operative word here -- are ordinari ly used on a nationwide basis but only half of the states p rovided remedies for dilution, Congress recognized the need for a federal anti-dilution statute. See H.R. Rep. No. 10 4-374, at 4 (1995), reprinted in 1995 U.S.C.C.A.N. 1029. Acco rdingly, the FTDA was passed to fill the gap and "to bring uniformity and consistency to the protection of fam ous marks." See id. at 3.

Historically, the Lanham Act has attempted to balan ce the two competing goals of protecting consumers and protecting a trademark owner's investment. The FTDA

, however, is concerned only with the latter:

It does not have those twin public policy go als of the laws of trademark infringement[.] As a resul t there may be a kind of judicial restraint about the ne w law. The perception may be that it does not carry any compelling need to protect the public, and t hat it benefits only a coterie of American business elite, not the general public.

Jerome Gilson, 2 Trademark Protection & Practice ( 1999) S 5.12[1][e] at 5-272 to 5-273 (hereinafter "Gilson "). Moreover, there can be little doubt that Congress s ought to protect only a select and narrow class of truly fam ous and well-recognized marks. "Without such a requirement, an anti-dilution statute becomes a rogue law that turn s every trademark, no matter how weak, into an anti-competi tive weapon." 4 J. Thomas McCarthy, McCarthy on Trademar ks and Unfair Competition, (4th ed. 1999) S 24:108 at 24-210 (hereinafter "McCarthy"). "To save the dilution doc trine from abuse by plaintiffs whose marks are not famous and distinctive, a large neon sign should be placed adj acent wherever the doctrine resides, reading: `The Diluti on Rule: Only Strong Marks Need Apply.' " 4 McCarthy S 24:10 8 at

2224-209; see also 2 Gilson S 5.12[1][b] at 5-260 (re ferring to

class of trademarks protected by FTDA as "Supermark s").

The legislative history of the Act is crystal clear that Congress intended courts to be highly selective in determining which marks are famous and accorded tho se truly famous marks an unprecedented degree of prote ction. A 1987 Report of the Trademark Review Commission of the United States Trademark Association (USTA) emphasiz ed

how limited this universe should be: "We believe th at a limited category of trademarks, those which are tru ly famous and registered, are deserving of national pr otection from dilution[.] We therefore urge the adoption of a highly selective federal dilution statute[.]" Trademark Re view Commission, Report & Recommendations, 77 Trademark Rep. 375, 455 (1987).2 The Report of the Senate Jud iciary Committee on the precursor to the FTDA stated that the

1988 bill

creates a highly selective federal cause of action to protect federally registered marks that are truly famous from dilution of the distinctive quality of the mark. The provision is specifically intended to addres s a narrow category of famous registered trademarks whe re the unauthorized use by others, on dissimilar pr oducts for which the trademark is not registered, dilut es the distinctiveness of the famous work[.]

Section 43(c) of the Act is to be applied se lectively and is intended to provide protection only to th ose marks which are both truly distinctive and famous, and therefore most likely to be adversely affect ed by dilution. To protect these special marks, an d to ensure that the bill does not supplant the current protection of

trademarks based on the likelihood of confus ion, the committee amended the legislation to place g reater emphasis on the factors the courts must weig h in determining whether a mark possesses a suffi cient

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2. In 1988, legislation based on the Commission's p roposal for a dilution statute limited only to "famous marks" was approved by the Senate, but did not survive in the House of Representatives. Su bsequently, the Commission's proposal became, in large part, the ba sis for the FTDA. See 4 McCarthy S 24:87.

23level of fame and distinctive quality to qua lify for

federal protection from dilution.

S. Rep. No. 100-515 (reproduced in 6 McCarthy App. A5, at 41-42)(emphasis added). Examples of truly famous ma rks cited in a House Report on the FTDA included "Buick ", "Dupont", and "Kodak". See H.R. Rep. No. 104-374, a t 4 (1995), reprinted in 1995 U.S.C.C.A.N. 1029, 1031. In a nutshell, the legislative history amply supports th e conclusion that the FTDA should be restricted to a narrow category of marks, ensuring that it does not swallo w infringement law by allowing mark owners to end-run a likelihood of confusion analysis which they fear-- or, indeed, know -- they cannot win.

Despite Congressional intent that the FTDA protect only a narrow category of truly famous marks, some early judicial interpretations of the Act granted dilutio n protection after engaging in only a cursory analysi s (or no analysis at all) of the fame of the mark. See , e.g ., Gazette Newspapers, Inc. v. New Paper, Inc., 934 F. Supp. 6 88, 696-97 (D. Md. 1996)(no separate analysis of fame); Hasbro, Inc. v. Internet Entertainment Group, Ltd. , No. 96- 130, 1996 WL 84853 (W.D. Wash. Feb. 9, 1996)(enteri ng preliminary injunction on dilution claim without di scussing fame). Little if any analysis, of course, would be required to find marks such as "Buick", "Dupont" or "Kodak" tru ly famous or, in the context of sports with which we d eal here,

that the mark "New York Yankees" is so famous that even non-sports fans are well aware of it. If, however, marks which are not such household names can be protected by the Act -- and, in my view, that is a big "if " -- those marks must be subjected to a rigorous analysis. As one

commentator has noted with some alarm:

[C]ourts thus far have shown little inclinat ion to limit protection to the truly famous marks envisio ned by the drafters of the [FTDA]. Instead, the courts, when they acknowledge the fame requirement at all, sim ply state a mark's fame in conclusory terms without at tention to the eight fame factors. Unless courts strict ly adhere to the admittedly vague dictates of the federal dilution statute, federal dilution protection will su rely give rise to a broad regime of trademark rights in gro ss.

24Robert N. Klieger, Trademark Dilution: The Whittlin g Away

of the Rational Basis for Trademark Protection, 58 U. Pitt. L. Rev. 789, 68 (Summer 1997).

This concern has not gone unnoticed, and courts are now taking pains to emphasize the rigor of the fame requirement. For example, the Ninth Circuit recentl y set itself apart from the expansive interpretations of the FTDA by other courts by vacating a permanent injunction after finding that plaintiff 's trademarks were not suffi ciently famous for FTDA protection and remanding with instructions to enter summary judgment for defendan t. See Avery Dennison Corp. v. Sumpton, 189 F.3d 868 (9th Cir. 1999). There, Avery Dennison, the seller of office supplies and industrial fasteners, sued an Internet e-mail b usiness which offered "vanity" e-mail addresses, alleging t hat defendant's maintenance of the domain name registra tions and <dennison.net> diluted Avery Dennison's trademarks. The "Avery" mark had been in continuous use since the 1930s and had been registered since 1963. The

"Dennison" mark had been in continuous use since th e late 1800s and registered since 1908. See Avery Dennison , 189 F.3d at 873. Avery Dennison's annual advertising expenditures exceeded $5 million, and its annual sa les reached $3 billion (although no evidence indicated what percentage of these dollar figures applied exclusiv ely to the "Avery" or "Dennison" trademarks as opposed to the company's other marks). See id. Avery Dennison also

maintained its own website.

After reviewing dilution theory and the legislative intent behind the FTDA, the Court emphasized the role of t he fame requirement in "reinstating the balance" in th e Lanham Act to avoid "over-protecting trademarks, at the expense of potential non-infringing uses." Id . at 875. Despite the fact that the registered marks had acqu ired distinctiveness and that four of the eight statutor y fame factors favored a finding that the marks were famou s, the Ninth Circuit held that, as a matter of law, Avery Dennison had failed to meet its burden of proving fame for t wo reasons. Id. at 876-77. First, while recognizing th at fame in a "specialized market segment" might be adequate if the "diluting uses are directed narrowly at the same ma rket

25segment," the Court noted that Avery Dennison provi ded no

evidence of customer overlap or that defendant's cu stomers possessed any degree of recognition of plaintiff 's marks. Id. at 877-78. Second, widespread third-party use of th e names "Avery" and "Dennison" undermined the famousn ess of the marks. Id. at 878. Thus, the Court held that the marks were not entitled to protection under the FTD A. See also I.P. Lund Trading ApS v. Kohler Co., 163 F.3d 27, 46 & 49 (1st Cir. 1998)(finding mark not famous and no ting "mark [must] be truly prominent and renowned"; "cou rts should be discriminating and selective in categoriz ing a mark as famous"); G. Kip Edwards, Developments in Dilution Law, 579 PLI/Pat 209, 217 (Nov.-Dec. 1999) (noting that many early judicial interpretations of the FTD A neglected to heed Congressional intent that the Act be applied sparingly to truly famous marks and mistake nly granted protection to marks that were "famous" only within a specialized market niche (citing Gazette Newspape rs), but noting that the "pendulum may be swinging back towa rd protection only of truly famous marks" (citing Aver y Dennison)).

If one heeds the legislative history, it is simply beyond the pale to find "The Sporting News" mark to be ano ther "Buick", "Dupont", or "Kodak", names which have lon g been associated in the public's eye with a particular co mpany or a particular product and which immediately strike o ne as being truly famous. Stated somewhat differently, to find that "The Sporting News" mark meets the fame requirement, thus entitling it to the extraordinary protection the FTDA provides -- a nationwide injunc tion -- would defeat Congress's deliberate design.

II.

Insufficient evidence of fame

The majority, after paying lip service to the fame requirement, holds that the District Court did not err by concluding that "The Sporting News" mark is famous in the sports periodicals market, a "niche market". I disa gree. For starters, the legislative history does not mention much less

26embrace a so-called "niche market" theory of fame.3 Beyond

that, the niche market theory risks lowering the ba r for trademark protection unless it is applied prudently to cases which clearly call for such an analysis, and this i s not one. For one thing, The Sporting News is directed at the general public via subscriptions and at newsstands, thereby begging the question: is not the general public the appropriate universe for assessing the fame of the mark? But even if fame exclusively within the sports peri odicals market would be enough to establish fame under the FTDA, the paltry evidence here does not permit any suchfi nding. Moreover, I take issue with the rather cursory disc ussion by the majority, and by the District Court, of the eight statutory factors for fame.

The fundamental problem with the majority's applica tion of the niche market theory, sometimes known as the" big fish in a small pond theory," to the facts of this case is that it is hard to conceive of any consumer goods or ser vices that are not in a narrow market of some type, be it luxury cars, cameras, or sporting publications.

Courts approving the "big fish in a small po nd" theory of trademark dilution fail to recognize that it threatens to overrun trademark infringement law. Trade mark

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3. The only reference in the legislative history th at even comes close to suggesting a so-called "niche-market" theory is fou nd in a discussion of the degree of a mark's recognition, where the Trade mark Review Commission noted that dilution might occur with res pect to one universe of consumers, but not necessarily to another. "For example, if a mark is

famous at the industrial level but not at the consu mer level, protection may be appropriate at the industrial level but not at the consumer level." 77 Trademark Rep. at 461. This reasoning may provid e the basis for the application of a niche market theory within a speci alized industrial niche. See, e.g., Syndicate Sales, Inc. v. Hampshir e Paper Corp., 192 F.3d 633, 640 (7th Cir. 1999)(finding niche market fame sufficient under circumstances in which both parties operated within the narrow wholesale market for plastic baskets used for funer al floral bouquets); Avery Dennison, 189 F.3d at 877-78 (involving marke ts for office products, industrial fasteners and e-mail addresses ); Teletech Customer Care Management (California), Inc. v. Tele-Tech Co. , Inc., 977 F. Supp. 1407 (C.D. Cal. 1997)(involving "teleservicing indu stry" where both parties provided services for large corporate clien ts).

27infringement law permits similar, or even id entical,

marks to coexist on non-competing goods. If even a locally famous mark can preclude all other m arks in every channel of trade, then conceivably eve ry trademark can be used to create a monopoly i n a word or symbol -- a proposition clearly contrary to the intent and practice of trademark law. It is possibl e tofind virtually any mark to be "famous" within som e market, depending on how narrowly that market is def ined.

Courtland L. Reichman, State and Federal Trademark Dilution, 17 Franchise L. J. 111, 133 (Spring 1998)

.

If marks can be "famous" within some market, depend ing on how narrowly that market is defined, then the FT DA will surely devour infringement law. Indeed, the unautho rized use of a mark in the same or a similar market is pr ecisely what good old-fashioned infringement principles hav e traditionally been there to remedy once actual conf usion or likelihood of confusion has been shown, and there i s simply no need for dilution principles. Can one imagine a clearer case for application of those principles than if on e were to begin manufacturing automobiles and calling those automobiles "Buick"? Similarly, if the parties here operate within the sports periodicals market, then this cas e, at least in my view, is a garden variety infringement case, and the complaint alleges just that.

Congress was quite clear, however, that the FTDA wa s not designed for situations in which ordinary infri ngement law provided a remedy but, rather, for those situat ions in which a truly famous mark on dissimilar products d eserves, but cannot receive, protection under infringement l aw -- those situations in which, for example, no one woul d ever confuse that truly famous mark with the goods or se rvices to which it has been wrongly attached. Congress was explicit as to where protection was warranted: "DUP ONT shoes, BUICK aspirin, and KODAK pianos." H.R. Rep. No. 104-374, at 4 (1995), reprinted in 1995 U.S.C.C.A.N . at 1030. The extensive relief the FTDA authorizes, whi ch gives the owner of the famous mark a virtual monopoly by precluding all others from using the mark "regardle ss of the presence or absence of . . . competition between th e owner of the famous mark and other parties, or likelihood of

28confusion," is itself something federal trademark l aw had

not before seen, and surely was not meant to be acc orded to any marginally "famous" mark. 15 U.S.C.S 1127. I t follows inexorably that if a mark is famous in the general public, it is also famous in its niche market and, in such a case, dilution and infringement theories need not b e mutually exclusive. Before, however, a Court catego rically adopts the theory that a mark that is not generally renowned, but famous only in its niche market, is e ntitled to protection under the FTDA, the evidence of fame should be rigorously examined. Had such an examination bee n performed here, only one conclusion could have been reached: the evidence of fame is woefully lacking.

A. Factor (F)

The FTDA lists eight non-exclusive statutory factor s for fame which a court may but is not required to consi der. The "may" is important because it would make little sense to require that a mark which immediately strikes on e as truly famous -- again, "Buick", "Dupont", or "Kodak " -- be analyzed for fame in accordance with these factors, although certainly such an analysis would confirm t he immediate impression of fame. The less truly famous a mark is, however, the more rigorous the analysis of the statutory factors must be in light of the evidence of record.

It is Factor (F), "the degree of recognition of the mark in the trading areas and channels of trade used by the marks' owner and the person against whom the injunction is sought," which gives the FTDA's fame requirement it s "teeth." As the majority notes, however, the Distri ct Court did not explicitly address this factor -- and neith er did the majority.

The guidance which Factor (F) affords to courts is somewhat murky. The Act, for example, does not defi ne "channels of trade," although presumably that phras e means the chain of distribution of the goods featur ing the mark in question, i.e. the route by which the goods travel to the ultimate consumer -- here, from the publishe r to the reader. Importantly, although Factor (F) focuses th e analysis on the channels of trade in which the part ies

29operate, it does not dictate the conclusion that fa me solely

within those channels of trade is enough for protec tion

under the FTDA.

According to the legislative history, a finding of fame "requires substantial renown or fame within both th e trading area of the mark and the trading area of th e other party to the dilution suit." S. Rep. No. 100-515 (r eproduced in 6 McCarthy App. A5, at 43)(emphasis added); see also 77 Trademark Rep. at 461 (advocating that a mark"shoul d be well known to a substantial portion of the relevant purchasers of the goods or services.")(emphasis add ed). This, I note, is a higher standard than the"appreci able number of persons" standard applied in an infringem ent action in which a plaintiff may prevail only if it shows that an appreciable number of ordinarily prudent purchas ers of the type of product in question are likely to becom e confused as to the source of the goods by the defen dant's use of the mark. See 77 Trademark Rep . at 461; 4 McCarthy S 24:92 at 24-163.

The crux of any discussion of Factor (F) is whether Times Mirror is likely to prove that its mark is recogniz ed by a substantial portion of LVSN's potential consumers. Again, the FTDA does not quantify the requisite "degree of recognition". Consequently, some commentators have called for a clear percentage cut-off for consumer recogni tion. McCarthy, for example, recommends that a plaintiff 's mark must be known by more than 50% of the defendant's potential customers in order to be considered "famo us". See 4 McCarthy S 24:92 at 24-164; see also Xuan-Thao N. Nguyen, The New Wild West: Measuring and Proving Fa me and Dilution Under the Federal Trademark Dilution A ct, 63 Albany L. Rev. 201, 233 (1999)(advocating a 40% rat e of recognition among defendant's potential customers i n a nationwide survey). While I am not wed to any speci fic minimum percentage for consumer recognition, I do t ake issue with the fact that Times Mirror has been gran ted a preliminary injunction without offering any evidenc e whatsoever of consumer recognition in LVSN's channe l of

trade.4

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4. The majority averts its gaze from what little ev idence does exist relating to either party's channel of trade. The ma jority of LVSN copies

30In the absence of evidence indicating that consumer s in

LVSN's channel of trade recognize Times Mirror's ma rk, it was wrong, in my view, for the District Court and t he majority to conclude that the publications share a common market and that the mark is famous within that mark et. The Sporting News, moreover, is available at newsst ands to members of the general public, just as Buick automo biles and Kodak film are available to the general public. Accordingly, to be entitled to a preliminary injunc tion, it was incumbent upon Times Mirror to demonstrate that it is likely to succeed in proving that its mark is truly famous among members of the general public and, although t his should follow almost automatically, that its mark i s recognized by a substantial portion of LVSN's consu mers -- those who like to gamble, who read gambling publica tions, or who frequent casinos. Such a showing is typicall y achieved through a properly-conducted recognition s urvey.5

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(approximately 22,000 out of 42,000 in circulation) are made available at no charge in Nevada. Many others are available at n o charge at casinos in Mississippi, Louisiana, Atlantic City, New Jerse y and Foxwood, Connecticut. Only a small percentage of copies is s old at newsstands. Of the approximately 10,000 to 11,000 copies sent to a couple of hundred newsstands in a handful of states, only approximate ly 1,500 are actually sold; the rest are returned to the publisher. By co ntrast, The Sporting News is available nationwide through subscriptions and at newsstands.

In addition, the record does not evidence much if a ny overlap in advertising revenues or readership. Because LVSN is given away at casinos, it survives primarily on its advertising r evenues. LVSN's advertisers tend to be "casinos, paging companies, [and] handicappers." Times Mirror, 1999 WL 124416, *2. The Sporting News , on the other hand, advertises, inter alia, sports memorabilia, c ollectibles, commemorative collections, apparel, sporting equipm ent, tobacco products and automobiles. LVSN's competitors for ad vertising dollars and readership are not sports magazines, but gambli ng publications, such as Gaming Today, Atlantic City Magazine and Ca sino Player. The Sporting News reports on the six major spectator sp orts; LVSN reports not only on sports gambling, but also on gambling o n horse racing, car racing, roulette, craps, blackjack, slots -- and pr esidential elections.

5. See, e.g., Star Markets, Ltd. v. Texaco, Ltd., 9 50 F. Supp. 1030, 1033 & 1035 (D. Haw. 1996)(secondary meaning survey foun d 75% of respondents associated mark "Star" with plaintiff ' s grocery stores; recognition survey found that over 96% of responden ts recalled

31Certainly, Times Mirror had ample time and notice ( sixteen

months passed between its discovery of LVSN's title and the preliminary injunction hearing) to conduct a recogn ition survey of its mark and/or a survey to determine whe ther its mark would be affected by the presence of LVSN's ti tle in the marketplace.6

Assuming, arguendo, that a showing of fame only wit hin the sports publication market suffices for protecti on under the FTDA, Congress's intent to reserve dilution pro tection for a select and narrow category of truly famous ma rks cannot be glossed over, as the majority has done, b y an unsupported finding that "The Sporting News" mark i s famous within its niche and recognized by a signifi cant portion of Las Vegas Sporting News readers."A preli minary injunction may not be based on facts not presented at a hearing, or not presented through affidavits, depos ition testimony, or other documents, about the particular situation [ ] of the moving part[y]." Adams v. Free dom Forge Corp., 204 F.3d 475, 487 (3d Cir. 2000). Times Mirr or has simply not come forward with any evidence of "the d egree of recognition of the mark in the trading areas and channels of trade used by the marks' owner and the person against whom the injunction is sought." 15 U.S.C. S 1125(c)(1)(F). This failure weighs formidably aga inst any conclusion that Times Mirror is likely to succeed o n its

dilution claim.

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plaintiff 's mark when asked to name any grocery st ore); Ringling Bros.- Barnum & Bailey Combined Shows, Inc. v. Utah Div. O f Travel Development, 955 F. Supp. 605, 612 n.4 (E.D. Va. 19 97)(40% of respondents to recognition survey associated phrase "Greatest Show on Earth" with plaintiff 's circus), aff 'd, 170 F.3d 449 (4th Cir. 1999),

cert. denied, 120 S. Ct. 286 (1999); Hershey Foods Corp. v. Mars, Inc., 998 F. Supp. 500, 517 (M.D. Pa. 1998) (94% of respondents recognized orange, brown and yellow packaging of non-labeled peanut bu tter candy as Reese's brand).

6. Between 1997 and 1998, The Sporting News spent $500,000 to study the market's perception of its title. See"In Brief: The More, The Merrier," Media Daily, Mar. 2, 1998. The results of this stud y were not, however,

introduced into evidence.

32B. The remaining factors

Examination of the remaining statutory factors underscores the inadequacy of the evidence offered by Times Mirror. Factor (A), the degree of inherent or acquired distinctiveness of the mark, encompasses more than simply whether "The Sporting News" mark has inherent distinctiveness or has acquired distinctiveness thr ough secondary meaning, as it must to be eligible for pr otection under the Lanham Act. This factor suggests that the degree

of the mark's distinctiveness is relevant to the fa me inquiry. As discussed below with regard to Factor (G), the d egree of a mark's distinctiveness is weakened by third party use of the mark and by the descriptive nature of the mark. Therefore, while this factor favors Times Mirror, i t does so only slightly.

Factor (B), the duration and extent of the use of t he mark, means more than simply the length of time"The Sporting News" mark has been in use, but also the b readth

of its distribution. Times Mirror did not introduce evidence of The Sporting News's sales figures either in toto or broken down by source, i.e. newsstand, subscription, adver tising, or Internet, relying only on its weekly circulation of half a million copies in Canada and the United States. It cannot be seriously argued that this weekly circulation is not small relative to other major publications, including spo rts magazines, and not small period given the populatio n of those countries.7 Thus, despite over one hundred ye ars of publication of an inexpensive product distributed i n countries in which there is a huge interest in, and concomitant market for, anything to do with sports, the relatively limited extent of The Sporting News 's c irculation certainly does not compel the conclusion that the m ark has generated a mental association among consumers suff icient to support a finding of fame.

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7. See Bill Wallace, "Web Hits Becomes Baseball's N ew Statistic, KnightRidder Tribune Business News, Feb. 22, 2000, availa ble at 2000 WL 14920170 (comparing distribution rates of sports pu blications -- 3.2 million weekly distribution of Sports Illustrated, for example -- and noting "second-tier" Sporting News's half million " static circulation"
rate.)

33Factor (C) addresses how widely and frequently a ma rk

has been advertised or publicized which, in turn, s uggests the public's familiarity with the mark. See 4 McCar thy S 24:92. Times Mirror presented evidence that it ad vertises primarily by direct mail, but also on television an d "occasionally" on the radio in "selected markets". It did not, however, provide evidence of its annual advertising expenses, nor did it detail where, when, or how the mark has been advertised. Moreover, the unadorned fact t hat Times Mirror has an Internet website, a fact the ma jority noted, is of little significance because there is n o evidence regarding the extent of sales or advertising on the Internet, nor is there any evidence regarding, for example, t he

number of "hits" received from visitors to the webs ite which would assist in determining the degree of consumer recognition of the mark.8

The FTDA, I note, does not specify quantitative measurements for Factors (B) and (C), such as a bas ic minimum for sales or advertising. When, however, th e evidence supporting these factors in this case is c ompared

to that in dilution cases in which the mark has bee n deemed "famous", Times Mirror's evidence of sales r evenue and advertising expenditures falls short.9

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8. The District Court's fame analysis appears to ha ve added an additional factor to the eight statutory factors in emphasizing that "Times Mirror has spent millions of dollars improvi ng the magazine." Times Mirror, 1999 WL 124416, *5. Large expenditure s aimed at retooling a product do not contribute to establishi ng fame unless it can be shown that those efforts were effective among th e relevant group of consumers. While it is possible that a company's in vestment in its product may result in the heightened fame of its ma rk, it is far from

clear whether that has occurred here.

9. See, for example: Eli Lilly & Co. v. Natural Ans wers, Inc., ___ F. Supp. 2d ___, No. 99-1600, 2000 WL 223585, *2, 16 (S.D. I nd. Jan. 20, 2000)(finding "Prozac" famous; $12 billion in sales over twelve year period and "massive" unsolicited publicity renderin g mark part of the "popular lexicon"); Planet Hollywood (Region IV), I nc. v. Hollywood Casino Corp., 80 F. Supp. 2d 815, 840 (N.D. Ill. 1999)(fin ding "Planet Hollywood" mark famous and noting annual sales of m ore than $195 million in merchandise bearing mark); NBA Propertie s v. Untertainment Records, L.L.C., No. 99-2933, 1999 WL 335147, *7 (S .D.N.Y. May 26,

34Factor (G) clearly favors LVSN. Factor (G) takes in to

account the possibility that third party use of the mark or elements of the mark has already diluted the mark's strength, thereby rendering the mark less famous. S ee 77 Trademark Rep. at 461 ("Third party uses of the sam e or similar marks are relevant in determining the fame and distinctiveness of the mark, since the mark must be in substantially exclusive use. If a mark is in widesp read use, it may not be famous for the goods or services of o ne business.").10

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1999)(finding NBA logo famous; logo appeared on $1. 6 billion of merchandise over three year period and mark was wid ely promoted); Nabisco, Inc. v. PF Brands, Inc., 191 F.3d 208 (2d Cir. 1999) (finding Pepperidge Farm Goldfish crackers famous; $120 mill ion three year marketing campaign and $200 million annual net sale s); Ringling Bros., 955 F. Supp. at 609 (finding slogan "Greatest Show on Earth" famous; over $103 million in annual sales derived from good s bearing slogan and over $19 million in annual advertising expenditures ); American Exp. Co. v. CFK, Inc., 947 F. Supp. 310, 312 (E.D. Mich. 199 6)(finding slogan "Don't Leave Home Without It" famous; over $600 mil lion in marketing expenditures over six years). 10. See, e.g., Avery Dennison Corp. v. Sumpton, 189 F.3d 868 (9th Cir. 1999); Carnival Corp. v. SeaEscape Casino Cruises, Inc., 74 F. Supp. 2d 1261, 1271 (S.D. Fla. 1999)("the word `fun' is used by many other businesses in the travel, gaming, and entertainment industries . . . cut[ting] against Carnival's dilution claim"); Mich ael Caruso & Co., Inc.

v. Estefan Enterprises, Inc., 994 F. Supp. 1454, 1463 (S.D. Fla. 1998)(extensive third party use of word "bongo" und ermines inherent distinctiveness of mark), aff 'd without opinion, 1 66 F.3d 353 (11th Cir. 1998); Hershey, 998 F. Supp. at 517 (finding trade dress not sufficiently famous and noting several examples of third party's trade dress in food industry similar to plaintiff 's color combination and lettering); Sports Authority v. Abercrombie & Fitch, Inc., 965 F. Supp . 925, 941 (E.D. Mich. 1997)(third-party use of "authority," whether or no t in the relevant market, diminishes any distinctive or famous aspect s of mark rendering it "not so famous as to deserve protection" under t he FTDA); Trustees of Columbia University v. Columbia/HCA Healthcare Corp . , 964 F. Supp. 733, 744 & 750 (S.D.N.Y. 1997)(fame of mark "Columb ia" for healthcare services "has been seriously undermined by third pa rty use of the same

or similar marks" both within the health care indus try and in other industries); Star Markets, 950 F. Supp. at 1035 (no ting multiple third party uses of "Star" and "Star Markets" in food ind ustry and unrelated industries); Golden Bear Int'l, Inc. v. Bear U.S.A. , Inc., 969 F. Supp. 742, 749 (N.D. Ga. 1996)(third parties extensively used both the word "bear" and a bear design in connection with the sale of sp orting goods and
clothes).

35The words "sporting" and "news" are commonplace wor ds

in our vocabulary appearing on many items, not only publications. The majority does not acknowledge tha t at least six other publications use the word "sporting " in their titles: Grays Sporting Journal, Southern Sporting J ournal, Sporting Thoughts, The Sporting Scene, The Sporting Life and Sporting Green. LVSN's use of the word"sporting " in its title describes the magazine's content. "Sporting" is defined, in this record, as "involving betting or gambling a s sporting men. Involving or inducing the taking of risk as a sporting proposition." In Viacom, Inc. v. Ingram Enters., 14 1 F.3d 886 (8th Cir. 1998), the Eighth Circuit held that w hile the

trademark "Blockbuster" for a chain of video stores was strong for purposes of an infringement analysis, th e mark's strength was not necessarily sufficient to sustain a claim for dilution-by-blurring due to the ordinariness of the word

"Blockbuster". See 141 F.3d at 891-92. The court no ted that "the fact that Viacom is seeking a complete mo nopoly on the use of a rather common word with multiple meanings would make us hesitate to uphold summary judgment on its dilution-by-blurring claim." Id. (c iting 3 McCarthy S 24:114 at 24-208) (dilution"is a potent legal tool, which must be carefully used as a scalpel, no t a sledgehammer."). Third party use of the commonplace

elements of Times Mirror's mark weakens its fame. F actor (G), therefore, strongly favors LVSN.

The legislative history indicates that the eight fa ctors should be weighed independently "and it is the cumu lative

effect of these considerations which will determine whether a mark qualifies for federal protection from diluti on." S. Rep. 100-515 (reproduced in 6 McCarthy App. A5, at 42). Moreover, the factors should be interpreted flexibl y "so that their relative weight in any given case can be bala nced." Hershey Foods Corp. v. Mars, Inc., 998 F. Supp. 500 , 504 (M.D. Pa. 1998). In Hershey, for example, the Distr ict Court found that even though six of the eight enumerated statutory factors favored Hershey (inherent distinc tiveness, degree of consumer recognition, duration and extent of use, advertising and publicity, geographical extent of t rading area and widespread distribution channels), Hershey 's trade dress was unlikely to meet the statute's stri ngent fame requirement because of third party use of the same

36aspects of the trade dress and because it was not

registered. Here, Factors (B), (D) and (H) favor Ti mes Mirror because "The Sporting News" is a registered mark us ed continuously for over 100 years nationwide. However , there is little evidence going to Factor (B)'s extent of sales. Times Mirror has offered little or no evidence going to f actors (C), (E) and (F). Factor (G) weighs strongly against Tim es Mirror. Finally, because third party use and the descriptiv e nature of the mark tend to weaken its distinctiveness, Fac tor (A) only slightly favors Times Mirror.

In my view, the District Court failed to sufficient ly

evaluate the mark -- it did not consider several of the statutory factors, nor did it qualitatively weigh t hose factors it did consider. Even if a mark not immediately rec ognizable by the general public can, nonetheless, meet the fa me requirement of the FTDA, and I do not believe it ca n, at this preliminary stage, based upon the inadequate record before us, I cannot agree that Times Mirror is likely to s ucceed in proving the fame of its mark.11

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11. My disagreement with the majority rests primari ly on my conclusion that Times Mirror has not come close to satisfying the threshold requirement of fame to qualify for protection under the FTDA. It goes without saying, therefore, that I would also disagr ee that Times Mirror was likely to prevail on its dilution claim. One ob servation: the majority holds that the District Court did not err in applyi ng what have become

known as the "Sweet factors" to determine whether L VSN's use blurred and, therefore, diluted, Times Mirror's mark for"Th e Sporting News". In addition to the Sweet factors, which have been roun dly criticized, the majority appears to have adopted the multiple facto r test articulated in Nabisco, Inc. v. PF Brands, Inc., 191 F.3d 208 (2d Cir. 1999), which includes the factor of likelihood of confusion, a f actor which is required in a standard infringement analysis, but not in a d ilution analysis. While I have no difficulty with adopting an appropriate l ist of factors for consideration, I note that we are the only Circuit to have considered the applicability of the Sweet factors -- and the Nabis co factors -- which has not articulated a specific critique or rejected som e or all of the

factors.

We should do so as well.

The majority also holds that the District Court did not err in finding that irreparable injury may be shown even in the ab sence of actual economic harm, presumably siding with the Second Ci rcuit and rejecting the Fourth Circuit's position on the issue. Compare Ringling Bros.-

37III.

Conclusion

The FTDA grants broad discretion to the federal cou rts and, as one commentator has remarked, "it is up to the judiciary to apply such potent laws with care and c ommon sense lest they damage the competitive systems they are designed to enhance." 4 McCarthy S 24:114 at 24-222 . Lax interpretation of FTDA requirements forecasts easie r lawsuits for trademark owners who will use a diluti on cause of action as a "tack-on" to an infringement c laim in

the event that likelihood of confusion cannot be sh own, and even when, as perhaps here, it can. See Klieger, Tr ademark Dilution, 58 U. Pitt. L. Rev. at 64 ("It may just b e a matter of time before dilution eclipses confusion as the g ravamen of most federal trademark actions and trademark rig hts in gross displace consumer protection as the defining feature of United States Trademark law."); I.P. Lund Tradin g ApS v. Kohler Co., 163 F.3d 27, 48 (1st Cir. 1998)("Diluti on laws are intended to address specific harms; they are no t intended to serve as mere fallback protection for t rademark owners unable to prove trademark infringement.").

Naturally, when a court rules on a motion for a preliminary injunction, it makes an initial judgmen t based on an incomplete factual record; its findings of fa ct and conclusions of law are subject to revision based on additional discovery. The stakes are, nonetheless, high; here, for example, had the injunction not been stay ed with the consent of the parties, lowering the bar for th e fame

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Barnum & Bailey Combined Shows, Inc. v. Utah Div. O f Travel Development, 170 F.3d 449, 461 (4th Cir. 1999), cer t. denied, 120 S. Ct. 286 (1999), with Nabisco, 191 F.3d at 223-24. I agr ee, and note only that it would be well-nigh impossible for a widely sold product such as Kodak to show that its sales have been impacted by a dilu ting use of its mark. Indeed, Kodak's sales might well be increasing even as the distinctiveness of its truly famous mark is being w hittled away by an unauthorized user. See S. Rep. No. 100-515, at 108 (noting that distinctive quality of a mark "could be materially reduced during a period of rising sales").

38requirement would have forced LVSN to alter its pub lication

at great cost or cease publishing altogether.12

Yet again, we have recently stressed our respect fo r the extraordinary nature of the preliminary injunction power and the fact that "the use of judicial power to arr ange relationships prior to a full determination on the merits is a weighty matter" to be reserved for extraordinary situations. Adams v. Freedom Forge Corp., 204 F.3d 475, 487 (3d Cir. 2000). This is surely not such a situa tion. I would vacate the preliminary injunction.

A True Copy:

Teste:

Clerk of the United States Court of Appeals

for the Third Circuit

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12. A District Court's review of the merits of a di lution claim at the preliminary injunction stage may also be significan t because, as at least one court has held, the cause of action is essentia lly equitable in nature and may not provide a right to a jury trial. See Ri ngling Bros., 955 F. Supp. 598, 605 (E.D. Va. 1997), aff 'd on other gro unds, 170 F.3d 449 (4th Cir. 1999)(reserving constitutional issue for another day), cert. denied, 120 S. Ct. 286 (1999); see also 25 U.S.C. S S 1116(a), 1117(a), 1118; 2 Gilson S 5.12[1][c][vii].

39