In a dilution claim, a trademark owner asserts that their famous mark is entitled to protection from use that causes harm to the mark’s reputation or distinctiveness. In effect, the trademark owner is saying that the mark is so famous that even use in connection with unrelated goods or services would result in an affiliation with its business and a resulting decrease in the value of the mark. For example, you are inviting a dilution claim if you begin selling McDonalds Cars, Chevy Hamburgers … or Nike Faucets.
But recent dismissals of trademark dilution claims at the motion to dismiss stage highlight that plaintiffs must be prepared to show early on that their mark is a “household name” before they can pursue their claims. These decisions also show that defendants are more often turning to this early path to attack an exaggerated claim to fame.
Background: Elements of a Claim to Fame
To state a claim for trademark dilution, a plaintiff in the Ninth Circuit must allege that (1) the plaintiff’s mark is famous and distinctive; (2) the defendant is using the mark in commerce; (3) the defendant’s use began after the mark became famous; and (4) the defendant’s use of the mark is likely to cause dilution by blurring or tarnishment. Jada Toys, Inc. v. Mattel, Inc., 518 F.3d 628 (9th Cir. 2007).
For the first element, a mark must be “widely recognized by the general consuming public of the United States as a designation of source of the goods or services of the mark’s owner.” 15 U.S.C. § 1125(c)(2). In 2006, Congress revised the statute to specifically exclude dilution protection for marks whose fame extends only to niche markets. This restricts dilution claims to “those few truly famous marks like Budweiser beer, Camel cigarettes, Barbie Dolls, and the like.” Bd. of Regents, Univ. of Tex. Sys. ex. rel. Univ. of Tex. at Austin v. KST Elec., Ltd., 550 F. Supp. 2d 657 (W.D. Tex. 2008).
Section 1125(c)(2) further provides four factors that are relevant to determining if a mark “possesses the requisite degree of recognition” needed for a dilution claim: (1) the duration, extent, and geographic reach of advertising and publicity of the mark, and whether it is advertised or publicized by the owner or third parties; (2) the amount, volume, and geographic extent of sales of goods or services offered under the mark; (3) the extent of actual recognition of the mark; and (4) whether the mark is federally registered.
Showing that a mark is famous is no easy feat. A plaintiff must demonstrate that a mark is a “household name.” Nissan Motor Co., 378 F.3d 1002, 1011 (9th Cir. 2004). And courts are clear that this is a “rigorous standard” that is difficult to prove. ArcSoft, Inc. v. CyberLink Corp., 153 F. Supp. 3d 1057, 1065 (N.D. Cal. 2015) (internal citations omitted).
Kardashian Selfies Are Famous? Not Even Plausible
Several courts have recently dismissed dilution claims at the pleading stage for failing to allege a plausible claim that the mark was famous. For example, in the ArcSoft case, ArcSoft’s claims to fame were not enough despite having alleged that over 20 million consumers had downloaded its selfie app. (See ArcSoft, Inc. v. CyberLink Corp., 153 F. Supp. 3d 1057 (N.D. Cal.2015)). ArcSoft also alleged that celebrities such as the Kardashians (whom ArcSoft described as “perhaps the world’s foremost authorities on the selfie”) used the app, and that the app had been featured in many of “the most famous and widely-circulated publications in the United States,” including The New York Times, The Washington Post, The Huffington Post, The Daily Mail, Allure magazine, TechCrunch, PCWorld, and VentureBeat.
In finding that ArcSoft’s allegation did not support a claim to fame, the court noted that “ArcSoft cites no authority for the proposition that 20 million downloads of an app is a material indicator of ‘household name’ status,” and pointed to the recent decision in Pinterest, Inc. v. Pintrips, Inc., No. 13-cv-04608 (N.D. Cal. 2015). In the Pinterest case, the photo-sharing app failed to establish fame at trial despite evidence that its website received 25 million monthly active users.
In another recent example, the court dismissed a trademark dilution claim against a historic fraternity. (See Theta Chi Fraternity, Inc. v. Leland Stanford Junior University, Case No. 16-cv-01336 (N.D. Cal. 2016)). After noting that fame in just one line of business is not enough to establish dilution, the court found that Theta Chi’s allegation that it was “one of the oldest and most widely regarded college fraternities in the United States” with more than 175,000 members since 1856 was inadequate to show that it was a household name. The court relied on the ArcSoft decision and a decision by a Florida district court granting summary judgment for a defendant accused of diluting an even more popular fraternity’s trademark. Based on these decisions, the court found that “allegations that Theta Chi has had 175,000 members over the course of 160 years is insufficient to support a claim that the Theta Chi marks are famous.”
Finally, the plaintiffs in LeCharles Bentley v. NBC Universal, LLC, CV 16-03693 (C.D. Cal. 2016), one of which was a former NFL player, failed to assert facts showing that their marks were famous despite alleging that the marks were recognized by people interested in football, sports performance, and fitness training. As in Theta Chi, the court noted that “recognition in a niche market or among a limited segment of individuals does not satisfy the ‘widely recognized by the general consuming public of the United States’ requirement of 15 U.S.C. § 1125(c)(2)(A).” Moreover, in dismissing the plaintiffs’ claims, the court highlighted the plaintiffs’ failure to allege facts about the extent of their marks’ advertising, publicity or sales.
“You’re Not Famous Until My Mother Has Heard of You.” – Jay Leno
It isn’t enough for a mark to be famous in a niche market or to be used over an extended period of time. For defendants fighting a trademark dilution claim against a plaintiff with a smaller customer base than those alleged in ArcSoft, Theta Chi, or Bentley, these cases supply a foundation for a motion to dismiss. And plaintiffs making a claim to fame should be prepared to allege specific amounts regarding sales, advertising and publicity at the pleading stage.
Eric Ball is a partner at Fenwick & West LLP. Carly Bittman is an associate Fenwick & West LLP.