Executive Intellectual Property Bulletin

THE FEDERAL DILUTION ACT DOES NOT PROVIDE GROUNDS FOR TRADEMARK OPPOSITION OR CANCELLATION IN THE TTAB

August 7, 1996, the Trademark Trial and Appeal Board held that the framers of the Federal Trademark Dilution Act of 1995 did not intend for the Act to provide a new statutory ground for trademark opposition or cancellation before the Trademark Trial and Appeal Board. The decision was based upon the holding that the Federal Dilution Act creates a federal cause of action in the Courts and cannot be addressed by the Trademark Trial and Appeal Board since the Trademark Trial and Appeal Board is an administrative tribunal empowered to determine the right to register or maintain registration, but not the right to use the mark. Babson Bros. Co. vs. Surge Power Corp. 39 USPQ2d at 1953 (Aug. 7, 1996).

January 16, 1996, the Federal Dilution Act was amended to add subsection (c) to Section 43 of the Trademark Act which provides that "the owner of a famous mark shall be entitled....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 famous mark..." Section 43(c)(10, 15 U.S.C. § 1125 (c)(1).

In the Babson case, Surge Power Corporation filed an intent-to-use application to register the mark SURGE for use in connection with electric generators and automobiles. Babson Bros. opposed registration of the mark initially on the grounds that Surge's mark was confusingly similar to Babson's registered SURGE mark used in connection with dairy equipment.

Subsequent to filing the Answer and Complaint, Babson Bros. moved to amend their pleadings to add a dilution claim supported by the Federal Dilution Act. Babson Bros. alleged that registration of Surge's mark would damage Babson Bros.'s mark through dilution because Babson's mark had become famous, and registration of Surge's mark would lessen the Babson mark's capacity to identify and distinguish the goods used in connection with that mark.

The Trial and Appeal Board denied Babson's Motion to Amend the Complaint basing their denial upon the Federal Dilution Act itself, the lack of legislative history on point, and a published report by the United States Trademark Association. The Board held that the framers of the Federal Dilution Act did not intend to provide a new statutory ground for opposition or cancellation by adding the new provision. Rather, the Federal Dilution Act creates a right to a cause of action in the courts, which can include as a remedy an injunction against the commercial use of the applicant's mark. The TTAB, however, is an administrative tribunal only empowered to determine the right to register or maintain a registration. As a result, the TTAB is not authorized to enjoin a party from using a mark, nor can they award monetary damages.

For more information on this topic or any other topic, please contact any of the attorneys at Schwegman, Lundberg & Woessner, P.A. at 612-339-0331 or by facsimile at 612-339-3061 or via this web site.