TTAB Disagrees With Supreme Court on Dilution Standard

The Trademark Trial and Appeal Board (“TTAB”) has recently ruled that the Supreme Court’s holding in Mosely v. V Secret Catalogue, Inc. does not apply to oppositions and cancellations before the TTAB. The case, Nasdaq Stock Market, Inc. v. Antartica, S.r.l. (Opposition No. 91121204), arose when the Italian corporation Antartica, S.r.l. filed an application for a design mark including the term NASDAQ in connection with various sporting goods and related clothing. The application was based on Antartica’s registration for the mark in its home country and its intent to use the mark in commerce in the United States. The NASDAQ stock market filed an opposition to Antartica’s application on the bases of likelihood of confusion and dilution. After determining the applicant’s NASDAQ mark was likely to cause confusion with the stock market’s NASDAQ marks (due in part to the stock market’s use of the mark on clothing and collateral goods), the TTAB turned to consideration of the stock market’s dilution claim.

The Nasdaq case was the first opportunity the TTAB had to address a dilution claim since the Supreme Court’s March 2003 decision in Mosely v. V Secret Catalogue, Inc. In Moseley, the Court held that a plaintiff bringing a dilution claim under the Federal Trademark Dilution Act (“FTDA”) must show that the defendant’s mark “causes dilution” of the plaintiff’s famous mark. The Mosely decision resolved a split between circuits applying this “actual dilution” standard and circuits applying a “likelihood of dilution” standard. The Court’s decision was based primarily on the text of the FTDA, which included the unambiguous language “causes dilution,” and could not be read to support a “likelihood of dilution” standard. The Court gave almost no guidance on how a trademark owner could show “actual dilution,” other than to suggest that it might be possible to presume actual dilution if the junior and senior marks are identical or nearly identical.

Although the Moseley decision was criticized as inconsistent with the legislative history of the FTDA and general theories of trademark law, the practical effect of the Mosely decision has been to discourage trademark owners from bringing dilution claims unless the junior mark has been in use long enough to actually cause measurable dilution of the famous mark. In theory, the Moseley opinion would also prevent dilution claims against intent-to-use marks, which have not yet been used and therefore have not yet “caused dilution.”

However, the TTAB drew a distinction between cases brought in federal court under the FTDA and oppositions and cancellations brought before the Board. The Board noted that the statute granting the TTAB the authority to consider dilution claims was not the FTDA (Section 43(c) of the Lanham Act), but rather the Trademark Amendments Act of 1999, which amended Section 2(f) of the Lanham Act. Section 2(f), as amended, did not include the “causes dilution” language of the FTDA, but rather allowed TTAB proceedings to be based on a claim that an applicant’s mark “when used would cause dilution.” Therefore, the Board’s “inescapable conclusion” was that “Congress intended to limit judicial relief under the FTDA to cases where dilution has already occurred but to allow cases involving prospective dilution to be heard by the Board.”

The TTAB therefore analyzed the NASDAQ stock market’s dilution claim under the “likelihood of dilution” standard, and concluded that Antarctica’s NASDAQ mark was likely to dilute the stock market’s mark by lessening the capacity of the NASDAQ mark to identify the stock market’s goods and services.

As a result of the TTAB’s decision, trademark owners who own famous marks should continue to include dilution claims in opposition proceedings before the Board, regardless of whether the application being opposed is based on use, intent-to-use, or a foreign registration. It remains to be seen whether the TTAB will also apply the “likelihood of dilution” standard in cancellation proceedings, but the language of the decision, as well as the fact that cancellations are also governed by Section 2(f), suggests that this standard may also be applicable in cancellations.