Opinion ID: 2443
Heading Depth: 3
Heading Rank: 1

Heading: Dilution by Blurring

Text: Dilution by blurring is an association arising from the similarity between a mark or trade name and a famous mark that impairs the distinctiveness of the famous mark, 15 U.S.C. § 1125(c)(2)(B), and may be found regardless of the presence or absence of actual or likely confusion, of competition, or of actual economic injury, 15 U.S.C. § 1125(c)(1); see also Deere & Co. v. MTD Products, Inc., 41 F.3d 39, 43 (2d Cir.1994); Nabisco, Inc. v. PF Brands, Inc., 191 F.3d 208, 219 (2d Cir.1999). Some classic examples of blurring include hypothetical anomalies as Dupont shoes, Buick aspirin tablets, Schlitz varnish, Kodak pianos, Bulova gowns, and so forth. See Mead Data Cent., Inc. v. Toyota Motor Sales, U.S.A., Inc., 875 F.2d 1026, 1031 (2d Cir.1989) (internal quotation marks omitted); see also id. (stating that the primary concern in blurring actions is preventing the whittling away of an established trademark's selling power through its unauthorized use by others.). Federal law specifies six non-exhaustive factors for the courts to consider in determining whether there is dilution by blurring: (i) The degree of similarity between the mark or trade name and the famous mark. (ii) The degree of inherent or acquired distinctiveness of the famous mark. (iii) The extent to which the owner of the famous mark is engaging in substantially exclusive use of the mark. (iv) The degree of recognition of the famous mark. (v) Whether the user of the mark or trade name intended to create an association with the famous mark. (vi) Any actual association between the mark or trade name and the famous mark. 15 U.S.C. § 1125(c)(2)(B)(i)-(vi); cf. ITC Ltd. v. Punchgini, Inc., 482 F.3d 135, 168 (2d Cir.2007). The District Court found that the second, third, and fourth factors favored Starbucks, and those findings are not challenged in this appeal. With respect to the first factor  the degree of similarity between the marks  the District Court did not clearly err in finding that the Charbucks Marks were minimally similar to the Starbucks Marks. Although Charbucks is similar to Starbucks in sound and spelling, it is evident from the record that the Charbucks Marks  as they are presented to consumers  are minimally similar to the Starbucks Marks. The Charbucks line of products are presented as either Mister Charbucks or Charbucks Blend in packaging that displays the Black Bear name in no subtle manner, and the packaging also makes clear that Black Bear is a Micro Roastery located in New Hampshire. See Playtex Prods., Inc., 390 F.3d at 167-68 (considering the differences in the ways [the marks] are presented in determining similarity in dilution action); cf. Star Indus., 412 F.3d at 386 (In assessing similarity [in the infringement context], courts look to the overall impression created by the logos and the context in which they are found and consider the totality of factors that could cause confusion among prospective purchasers. (internal quotation marks omitted)). Moreover, Black Bear's package design for Charbucks coffee is different in imagery, color, and format from Starbucks' logo and signage. [2] For example, either a graphic of a bear or a male person is associated with Charbucks, and those marks are not comparable to the Starbucks graphic of a siren in pose, shape, art-style, gender, or overall impression. Indeed, the Starbucks siren appears nowhere on the Charbucks package. To the extent the Charbucks Marks are presented to the public through Black Bear's website, the dissimilarity between the marks is still evident as the Charbucks brand of coffee is accompanied by Black Bear's domain name, www. blackbearcoffee.com, and other products, such as shirts and cups, displaying Black Bear's name. Furthermore, we note that it is unlikely that Charbucks will appear to consumers outside the context of its normal use, since Charbucks is not directly identifiable with the actual product, i.e., coffee beans. Cf. Nabisco v. PF Brands, Inc., 191 F.3d 208, 213, 218 (2d Cir.1999) (observing that Pepperidge Farm's famous goldfish mark may be identified outside of the packaging because the goldfish cracker itself is the famous mark). The term Charbucks appears only on the packaging and on Black Bear's website  both mediums in which the Charbucks Marks' similarity with Starbucks is demonstratively minimal  and Starbucks has not identified any other method by which the Charbucks Marks likely would be presented to the public outside the context of its normal use. Cf. id. at 218 ([M]any consumers of [the defendant's] crackers will not see the box; they will find goldfish-shaped cheddar cheese crackers served in a dish at a bar or restaurant or friend's house, looking very much like the familiar Pepperidge Farm Goldfish product.). To be sure, consumers may simply refer to Mister Charbucks or Charbucks Blend in conversation; however, it was not clearly erroneous for the District Court to find that the Mister prefix or Blend suffix lessened the similarity between the Charbucks Marks and the Starbucks Marks in the court's overall assessment of similarity. [3] Inasmuch as Starbucks argues that the District Court clearly erred in concluding that Charbucks is not a stand-alone identifier of Black Bear's products, we find Starbucks' argument to be unpersuasive. Starbucks asserts that the District Court should have ignored the term Mister or Blend before or after Charbucks in assessing the degree of similarity factor because those terms are generic and too weak to serve a brand-identifying function. This argument to ignore relevant evidence is unfounded in the law. See 15 U.S.C. § 1125(c)(2)(B); accord H.R. Report No. 109-23, at 7 (2005), reprinted in 2006 U.S.C.C.A.N. 1091, 1096 (emphasizing that a court is permitted to consider all relevant factors in determining the presence of dilution by blurring). And in any event, even if the core term Charbucks were used to identify a product as a stand-alone term, such finding would not be dispositive of the District Court's overall assessment of the degree of similarity. See Playtex Prods., Inc., 390 F.3d at 167-68. In this case, the District Court's reasons for a finding of minimal similarity between the Charbucks Marks and the Starbucks Marks were well supported by the record, as explained above. Upon its finding that the marks were not substantially similar, however, the District Court concluded that [t]his dissimilarity alone is sufficient to defeat [Starbucks'] blurring claim, and in any event, this factor at a minimum weighs strongly against [Starbucks] in the dilution analysis. We conclude that the District Court erred to the extent it required substantial similarity between the marks, and, in this connection, we note that the court may also have placed undue significance on the similarity factor in determining the likelihood of dilution in its alternative analysis. Prior to the TDRA, this Court has held that [a] plaintiff cannot prevail on a state or federal dilution claim unless the marks at issue are `very' or `substantially similar.' Playtex Prods., Inc., 390 F.3d at 167. Notably, under the pre-TDRA law, the federal statute provided a remedy for dilution of famous marks but did not define dilution, much less inform the courts of the importance of similarity in the dilution analysis. 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 has become famous and causes dilution of the distinctive quality of the mark.... 15 U.S.C. § 1125(c) (2000). Our adoption of a substantially similar requirement for federal dilution claims, see Playtex Prods., Inc., 390 F.3d at 167, can likely be attributed to the lack of guidance under the former federal statute and the existence of a substantially similar requirement under state dilution statutes, which were better defined, see generally Federal Express Corp. v. Federal Espresso, Inc., 201 F.3d 168, 174-76 (2d Cir.2000); Mead Data, 875 F.2d at 1028-29. The post-TDRA federal dilution statute, however, provides us with a compelling reason to discard the substantially similar requirement for federal trademark dilution actions. The current federal statute defines dilution by blurring as an association arising from the similarity between a mark ... and a famous mark that impairs the distinctiveness of the famous mark, and the statute lists six non-exhaustive factors for determining the existence of an actionable claim for blurring. 15 U.S.C. § 1125(c)(2)(B). Although similarity is an integral element in the definition of blurring, we find it significant that the federal dilution statute does not use the words very or substantial in connection with the similarity factor to be considered in examining a federal dilution claim. See 15 U.S.C. § 1125(c); Bonime v. Avaya, Inc., 547 F.3d 497, 502 (2d Cir.2008) (In determining the proper interpretation of a statute, this court will look first to the plain language of a statute and interpret it by its ordinary, common meaning. (internal quotation marks omitted)). Indeed, one of the six statutory factors informing the inquiry as to whether the allegedly diluting mark impairs the distinctiveness of the famous mark is [t]he degree of similarity between the mark or trade name and the famous mark. 15 U.S.C. § 1125(c)(2)(B)(i) (emphasis added). Consideration of a degree of similarity as a factor in determining the likelihood of dilution does not lend itself to a requirement that the similarity between the subject marks must be substantial for a dilution claim to succeed. See Bonime, 547 F.3d at 502. Moreover, were we to adhere to a substantial similarity requirement for all dilution by blurring claims, the significance of the remaining five factors would be materially diminished because they would have no relevance unless the degree of similarity between the marks are initially determined to be substantial. Such requirement of substantial similarity is at odds with the federal dilution statute, which lists degree of similarity as one of several factors in determining blurring. See United States v. Kozeny, 541 F.3d 166, 171 (2d Cir.2008) (Statutory enactments should ... be read so as to give effect, if possible, to every clause and word of a statute. (internal quotation marks omitted)); compare 15 U.S.C. § 1125(c)(2)(B)(ii) (providing [t]he degree of inherent or acquired distinctiveness of the famous mark as one of the factors to be considered in determining dilution), with Perfumebay.com Inc. v. EBAY, Inc., 506 F.3d 1165, 1180, 1181 n. 9 (9th Cir. 2007) (comparing post-TDRA federal dilution law with California's dilution law and noting that the similarity requirement [in a dilution action] may be less stringent in circumstances in which the senior marks is highly distinctive and the junior mark is being used for a closely related product. (internal quotation marks omitted)). [4] Accordingly, the District Court erred to the extent it focused on the absence of substantial similarity between the Charbucks Marks and the Starbucks Marks to dispose of Starbucks' dilution claim. We note that the court's error likely affected its view of the importance of the other factors in analyzing the blurring claim, which must ultimately focus on whether an association, arising from the similarity between the subject marks, impairs the distinctiveness of the famous mark. 15 U.S.C. § 1125(c)(2)(B); cf. Perfumebay.com, Inc., 506 F.3d at 1180-81; see supra note 4. Turning to the remaining two disputed factors  (1) whether the user of the mark intended to create an association with the famous mark, and (2) whether there is evidence of any actual association between the mark and the famous mark  we conclude that the District Court also erred in considering these factors. The District Court determined that Black Bear possessed the requisite intent to associate Charbucks with Starbucks but that this factor did not weigh in favor of Starbucks because Black Bear did not act in bad faith. The determination of an intent to associate, however, does not require the additional consideration of whether bad faith corresponded with that intent. The plain language of section 1125(c) requires only the consideration of [w]hether the user of the mark or trade name intended to create an association with the famous mark. See 15 U.S.C. § 1125(c)(2)(B)(v); see also Kozeny, 541 F.3d at 171 (We have stated time and again that courts must presume that a legislature says in a statute what it means and means in a statute what it says there. (internal quotation marks omitted)). Thus, where, as here, the allegedly diluting mark was created with an intent to associate with the famous mark, this factor favors a finding of a likelihood of dilution. The District Court also determined that there was not an actual association favoring Starbucks in the dilution analysis. Starbucks, however, submitted the results of a telephone survey where 3.1% of 600 consumers responded that Starbucks was the possible source of Charbucks. The survey also showed that 30.5% of consumers responded Starbucks to the question: [w]hat is the first thing that comes to mind when you hear the name `Charbucks.' In rejecting Starbucks' claim of actual association, the District Court referred to evidence supporting the absence of actual confusion  to conclude that the evidence is insufficient to make the ... factor weigh in [Starbucks'] favor to any significant degree. (internal quotation marks and original alteration omitted). This was error, as the absence of actual or even of a likelihood of confusion does not undermine evidence of trademark dilution. See 15 U.S.C. § 1125(c)(2)(B); accord Nabisco, 191 F.3d at 221 (stating that while a showing of consumer confusion is relevant in determining dilution by blurring, the absence of confusion has no probative value in the dilution analysis). Accordingly, in light of the foregoing, we remand to the District Court for consideration of Starbucks' claim of trademark dilution by blurring under 15 U.S.C. § 1125(c)(2)(B).