Trademark Dilution

Trademark dilution is a use of a trademark which might base claims for trademark infringement. It usually occurs with regards to a well-known trademark. This type of trademarks can easily be recognized, but it is much harder to define. In this article, a trademark attorney from our firm will elaborate on those 2 complex legal definitions and explain what are the legal actions that can be taken in cases of trademark dilution.

The law firm of Decker, Pex, Levi specializes in intellectual property (IP) and trademark law. The firm represents Israeli and international clients in IP legal proceedings and assists them with handling their trademark registration in Israel and worldwide, portfolio management and protecting their trademarks, copyrighted works and other IP assets.

What are Well-known Trademarks?

Trademark dilutionWhat is common to BMW, Red Bull and Apple? These 3 companies produce totally different products. Yet, they all own brands that are well-known trademarks, without any doubt. Well-known trademarks are marks with a high level of recognition, that gained international goodwill and became widely familiar in many countries. 

With regards to the above companies, not only their names are well-known trademarks, but also other brands and features that appear on their products. Whoever comes across an Apple computer would immediately recognize the apple icon, which is a well-known trademark in its own right. The same applies for Red Bull’s cans of energy drinks, with the combination of silver and blue squares.

Protecting Well-Known International Brands

Similarly to other IP assets, such as patents, copyright-protected works, trademark owners can sell their trademarks, transfer them and even protect them from “thefts” (by taking legal action against trademark infringements). This would often require trademark registration. However, over the years new legal methods came in force. Nowadays, it is possibe to protect trademarks with a high profile, via legal doctrine of well-known trademarks.

Usually, companies that own well-known trademarks invest large sums of money in order to market and advertise their brands. The goal is to protect their uniqueness and goodwill. A major problem regarding well-known trademarks is their ability to lose their uniqueness. It might result with the public not being able to associate the trademark with the product behind it.

Many brands lost the uniqueness of their trademarks over the years. Accordingly, they lost their marks no longer have legal protection as trademarks. For instance, “Aspirin”, the well-known medication, originally developed by Bayer. Bayer has lost its trademark protection over the brand “Aspirin” in many countries. It happened as the brand became generic and the public could no longer associate the mark with Bayer’s particular product.

In fact, the definition of a well-known trademark was designed to cope with globalization and the popularity of international brands. Brands that are being sold around the world can now gain protection in some cases and circumstances. They can even gain protection without trademark registration in a certain territory. 

This protection can be against the use of similar marks that can cause trademark dilution. That is, when the use of a similar mark may degrade the brands’ extensive reputation. It is usually with relation to well-known trademarks. Below we will explain what exactly is a trademark dilution and what are the legal protections against it.

Should One Register Well-Known Trademark?

Trademark dilutionDifferent jurisdictions have different definitions and requirements for the recognition of a trademark as a well-known trademark. It is therefore important to note that a trademark might be recognized as well-known in some countries, whereas in some countries it won’t be recognized as such. In Israel, the Trademark Ordinance defines a well-known trademark as a mark that is well-known in the territory of Israel, even if it is not registered nor used in it. 

Thus, well-known trademarks are an exception to the obligation to register a trademark in order to obtain legal protection within a certain jurisdiction. However, registering a trademark is still the ultimate way to secure legal protection over your brands. Our firm represents companies and businesses in trademark registration proceedings and handling applications for trademark registration.

What Makes a Trademark a Well-Known Trademark?

There are several factors in order to conclude whether a mark is indeed well-known in the Israeli territory. For instance, the extent to which the mark is being familiar among the relevant consumers, as well as a consequence of its marketing efforts. These and other factors will be a part of the examination whether a mark is a well-known trademark.

As mentioned, international companies usually invest large sums in order to market its brands around the world. This can be done through advertisement, promotion and other methods that can serve as evidence to base the arguments that the mark is well-known.

Trademark dilutionEven before the Israeli law was amended and the definition of well-known trademarks has been added, the Israeli courts began to recognize marks as well-known trademarks. In 1998, the Israeli Supreme Court ruled in an appeal on a decision of the Israeli Trademark Registrar. The registrar refused to register the mark “BAKARDI JEANS” for an Israeli clothing brand, due to the opposition of the famous liquor company Bacardi. 

Opposing Trademark Registration Because of a Well-Known Trademark

Opposition proceedings are similar to civil lawsuit proceedings. They include filing of pleadings and evidence, investigations of declarants and final decision of the Israeli Trademark Registrar. One can appeal the registrar’s decision. In Bacardi’s case, the owner of the Israeli clothing brand did so.

There are 2 main claims that one can raise in an opposition to trademark registration. The first claim is that the mark already exists in the Israeli trademark registry. The second claim is that the mark is identical or may cause deception with another registered trademark or a well-known trademark. In the case at hand, Bacardi’s argument was that its trademark is well-known.

The court held that there is a great international reputation behind the Bacardi mark. Therefore,  registering a deceptive brand as a trademark would constitute an unfair competition, a practice that cannot be allowed. Although the Israeli brand wasn’t competing with Bacardi directly, the court held that it cannot gain trademark protection.

After this precedent judgement, the Trademark Ordinance was amended and the definition of a well-known trademark was added to it. Since then, the Israeli courts have defended many well-known trademark owners from infringers, attempting to dilute the strength of their brands. We will now focus on trademark dilution in both opposition proceedings and legal actions against trademark infringement (C&D letters, lawsuits, etc.).

Trademark Dilution and Well-Known Trademarks

Trademark dilution means that a certain use of a trademark weakens the power of its unique goodwill, and thus erodes its international status. It usually occurs in well-known trademarks, as they often acquire international recognition and an extensive reputation. Any use of such high profile trademarks by others might affect this reputation negatively. In such circumstances it is possible to raise claims for trademark dilution.

In the aforementioned Bacardi case, the court used the legal doctrine of trademark dilution. Although Bacardi sells mostly liquors under its trademark, the court held that the Israeli mark is still problematic. The public might think that there is a connection between the Israeli clothes and Bacardi’s products. In such cases, a mark might dilute the goodwill of the well-known brand. 

In another verdict, the court held that a mark which includes a painting of a blue dove cannot qualify for registration for beauty and hygiene products. Unilever (the owner of Dove products) filed an opposition. Its argument was that the idea of a dove symbolizing beauty and hygiene has gained international goodwill. The court accepted Unilever’s claims. It was held that in the circumstances of the case, the Israeli applicant cannot enjoy Unilever’s reputation. Allowing this may cause dilution. 

Trademark Dilution and Infringement of a Well-Known Trademark

The above cases dealt with the refusal to register marks that are similar to well-known trademarks and may thus cause trademark dilution. The Israeli Trademark Ordinance also enables taking legal actions against trademark dilution, when a use of a well-known trademark might damage its owner.

Recently, the Israeli Supreme Court dismissed a lawsuit filed by Nespresso against the Israeli company Espresso Club. Espresso Club had an advertisement with an actor resembling George Clooney (Nespresso’s presenter). Nespresso sued Espresso Club for several legal claims, including trademark dilution. 

The court did not accept Nespresso’s claims in this respect, mostly because its trademark did not appear in Espresso Club’s advertisement. In other circumstances, where a well-known trademark indeed appears in a competitor’s advertisement, such claims might be accepted. The Israeli courts are willing to accept claims for trademark dilution with regards to registered and well-known trademarks.

Contact Us

In this article we explained the definitions of a well-known trademark and their connection to trademark dilution. If you have further questions you may contact the law firm of Decker, Pex, Levi. Our attorneys specialize in trademark law and protecting IP assets. We will be happy to assist with any legal matter with relation to trademarks, based on our extensive experience in handling trademark registration proceedings and protecting IP assets in Israel and around the world.

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