July 01, 1997
As mass-marketing and advertising have become ever more sophisticated and pervasive, the law's conception of the scope and purpose of trademark protection has shifted in a way that potentially threatens freedom of expression. Traditionally, a trademark's primary function was to identify the source of a product; the focus was on protecting the public by ensuring that consumers had accurate information. Nowadays, though, trademarks are designed not so much to reveal the product's corporate source as to convey a favorable image of the product. As a result, we have become more receptive to the notion that the main goal of trademark laws is to protect the reputation of the owner of the mark, rather than to prevent consumer confusion.
Nowhere is this shift of focus more evident than in the doctrine of "trademark dilution," a cause of action recognized in several states' unfair competition statutes and recently written into the Lanham Act as § 43(c). 15 U.S.C. § 1125(c) (1996). Infringement by dilution occurs when the infringer's use of the mark "causes dilution of the distinctive quality of the mark." 15 U.S.C. § 1125(c)(1) (1996). In a significant departure from traditional trademark law, the owner of the mark need not allege likelihood of consumer confusion as an element of the dilution cause of action. Dilution can occur either by "blurring" (the infringer's use of the mark diminishes its uniqueness even when there is no source confusion) or by "tarnishment" (the infringer uses the mark in a context that reflects badly on the image that the mark's owner wants to promote). See Jordache Enterprises, Inc. v. Hogg Wyld, Ltd., 828 F.2d 1482, 1489 (10th Cir. 1987) (discussing various dilution theories in context of state statute). The federal statute is limited to dilution of "famous" marks. It is also worth noting that the federal anti-dilution statute does not explicitly mention tarnishment, and that therefore some ambiguity exists (in theory) as to whether the statute authorizes a cause of action based on the tarnishment theory. However, the legislative history suggests that the statute was meant to encompass this cause of action, and courts have applied it accordingly.
This legal development should be disturbing to advocates of individual liberties and free markets. Unlike tangible resources, words and images can be used by unlimited numbers of people without being used up: in their natural state, they are a common resource, not exclusive property. Trademark protection is a limitation placed upon the free marketplace of ideas which is justified, if at all, by countervailing social benefits it produces. Expansion of a trademark owner's property rights, then, does not necessarily expand individual liberties or advance free market ideals. The concept of dilution by tarnishment may in fact hinder free debate and criticism of the values promoted by the "famous" marks that pervade our popular culture.
The federal anti-dilution statute itself provides only a partial safeguard against the danger that large corporations will use the statute to insulate their products' images from effective criticism. The statute does not apply to "noncommercial use" of a mark. 15 U.S.C. § 1125(c)(4)(B) (1996). However, both the nature of modern advertising and the outcome of some recent trademark parody cases suggest that it is often difficult to distinguish between commercial and noncommercial expression. Moreover, some of the state anti-dilution statutes do not even contain an explicit exemption for noncommercial uses.
The Supreme Court's attempt to define commercial speech as speech that merely proposes a commercial transaction, see Virginia State Board of Pharmacy v. Virginia Citizens Consumer Council, Inc., 425 U.S. 748, 762 (1976), seems out of touch with today's style of advertising. Ads featuring cultural icons like Joe Camel and the Marlboro Man are designed to create and promote the image of an entire lifestyle supposedly associated with the product. The product itself is often not even featured prominently. Overt commercial proposals have given way to subtle psychological appeals.
Because of the expressive nature of such marks, anti-smoking activists have found that one of the most effective ways to criticize the product is to parody the trademarks that make it attractive. They must counteract not just the appeal of "cigarettes" in the abstract, but (perhaps even more so) the widespread cultural images of cool camels and rugged cowboys whom smokers desire to emulate. New York City taxis now carry parody ads depicting a yellow-toothed crone smoking "Virginia Slimes" with the slogan "It's a Cancer Thing" (a parody of "It's a woman thing") and a skeleton on a horse underneath the word "Cancer" in the red-and-white style of the Marlboro logo. Stuart Elliott, Uncle Sam Is No Match for the Marlboro Man, N.Y. Times, Aug. 27, 1995, Money & Business, at 1. Similarly, an anti-alcohol group parodied the Absolut Vodka ads with a picture of a bottle outlined in chalk on the pavement at the scene of a car wreck, next to the words "Absolute End." Steven Greenhouse, Hoist on their Own Ad Campaigns, N.Y. Times, March 17, 1996, Week in Review, at 6. Sponsors of these parodies argue that they are necessary and effective because the main message conveyed by the marks in question is not commercial information about a product, but instead expressive promotion of a certain lifestyle, which can only be counteracted by contesting the cultural meaning of the symbols themselves.
Since the parody advertisements discussed above are sponsored by nonprofit groups, the noncommercial use exception would probably apply to exempt them from liability for what would otherwise be a clear case of dilution by tarnishment. The activists could be liable, though, if they marketed products such as T-shirts that portrayed trademark parodies in order to spread their message. See Dorean M. Koenig, Joe Camel and the First Amendment: The Dark Side of Copyrighted and Trademark-Protected Icons, 11 T.M. Cooley L. Rev. 803, 808 (1994). The trademark owners themselves, meanwhile, sell T-shirts and other clothing to popularize their cool characters and the products with which they are associated. Id. at 807. In this way, the anti-dilution law unfairly favors the trademark owner's ability to create a favorable place for its mark in the iconography of popular culture, while insulating it from effective criticism.
A recent case decided under the federal anti-dilution statute seems to indicate that the noncommercial use exemption may have little force because of the difficulty of distinguishing between advertising, entertainment, and expression. In Anheuser-Busch, Inc. v. Andy's Sportswear, Inc., No. C-96-2783, 1996 U.S. Dist. LEXIS 15583 (N.D. Cal. Aug. 28, 1996), a sportswear company was enjoined from selling T-shirts bearing the slogan "Buttweiser" on the grounds that this use diluted the famous "Budweiser" trademark. Here, the mark was used as an expressive parody, not as a trademark, but the noncommercial use exception was not applied, probably because the parody of the mark was still being used on goods. (The court did not discuss its reasoning in any detail.) This precedent does not bode well for anti-smoking activists who wish to popularize their alternative interpretation of advertising's cultural icons through buttons, T-shirts, and the like.
The greatest danger to free expression may be posed by state anti-dilution statutes which do not contain an explicit noncommercial use exception. For instance, when Screw Magazine published a picture of Pillsbury's characters Poppin' Fresh and Poppie Fresh engaging in sexual acts, a Georgia court issued an injunction pursuant to the Georgia anti-dilution statute (on the grounds of tarnishment), despite having found that Screw's use of the marks was editorial and noncommercial. The Pillsbury Company v. Milky Way Productions, Inc., 215 U.S.P.Q. 124 (N.D. Ga. 1981).
State anti-dilution laws can also hinder competitors' ability to criticize the trademark owner's product in a commercially effective way. In Deere & Company v. MTD Products, Inc., 41 F.3d 39 (2d Cir. 1994), Deere's competitor MTD ran a commercial which depicted Deere's trademark deer running away in fear while being pursued by an MTD tractor. The purpose of the parody was to compare Deere's tractors unfavorably to MTD's. The court found that traditional likelihood of confusion analysis was inappropriate, as was the theory of dilution by blurring, because the alleged infringer was using the trademark owner's mark to refer to the trademark owner's product, rather than to identify the infringer's own goods. Id. at 43-44. However, the court found MTD liable for dilution by tarnishment, on the grounds that the parody's unflattering treatment of the Deere mark "risk[ed] the possibility that consumers will come to attribute unfavorable characteristics to [the] mark and ultimately associate the mark with inferior goods and services." Id. at 45.
This argument makes no sense for the simple reason that the legitimate purpose of comparative advertising is to create a negative impression of the rival brand. This is just market competition, not dilution. Far from free-riding on the goodwill of Deere's mark --- the injury that the dilution cause of action was meant to address --- MTD tried to diminish that goodwill by suggesting that its product was superior. The court seemed to want to restrict comparative advertising to factual comparisons of objectively measurable product characteristics. However, to a great extent, modern advertising focuses less on providing factual information and more on surrounding the product with favorable emotional and psychological associations, often by means of a memorable trademark. Effective comparative advertising, then, must be able to reinterpret and reconfigure those images. The Deere court's dilution theory wrongly allows trademark owners to use their marks to prevent competition.
State anti-dilution laws may even prevent editorial criticism of the trademark owner's product. The Eighth Circuit recently held that a parody advertisement in a humor magazine violated Missouri's anti-dilution statute. Anheuser-Busch, Inc. v. Balducci Publications, 28 F.3d 769 (8th Cir. 1994). The fake advertisement, which appeared on the back of Snicker Magazine, purported to sell "Michelob Oily," and featured Anheuser-Busch's trademarked eagle being soaked with oil from a beer can. The parody's dual purpose was to mock Anheuser-Busch's brand proliferation and to express outrage at the Shell oil spill in the Gasconade river (a source of Anheuser-Busch's water supply). Id. at 772. The court rejected the defendants' contention "that the First Amendment prevents any construction of an anti-dilution statute that would enjoin perceived tarnishment in a non-commercial context." Id. at 778. L.L. Bean, Inc. v. Drake Publishers, Inc., 811 F.2d 26 (1st Cir. 1987), in which the First Circuit declined to apply Maine's dilution statute to a sexually explicit parody of L.L. Bean's catalog on First Amendment grounds, was distinguished by the Eighth Circuit on the grounds that the parody in L.L. Bean did not attack the quality of the trademark owner's product.
It is a sad irony that where parodies are concerned, the law seems to afford more protection to trademarks than to people. Advertisement parodies are enjoined if they criticize a trademarked product, but Jerry Falwell could not succeed on a cause of action against Hustler for printing an advertising parody stating that he had sex with his mother while drunk in an outhouse. Hustler Magazine, Inc. v. Falwell, 485 U.S. 46 (1988). Perhaps Falwell should have joined forces with Campari Liquors (the brand whose advertisement was parodied) and proceeded on a trademark tarnishment theory instead.
As described above, the concept of trademark dilution, particularly when premised on a theory of tarnishment, tends to encroach on freedom of expression when the expression in question makes critical use of famous marks. By shifting the focus of trademark protection from the consumer's ability to make free and informed choices, to the trademark owner's ability to control its public image, anti-dilution laws grant corporations unfair control of words and images that should be free for all to use. Protecting famous marks from critical use prevents market competition in the realm of ideas. Koenig, at 814. It also hinders economic competition by creating unreasonable barriers to effective comparative advertising.
To limit the tarnishment theory's threat to free expression, Congress and the states might consider amending their respective anti-dilution statutes to include a clear exception for critical and expressive uses of the mark --- an exception that does not depend on the elusive concept of "noncommercial" use. Section 25(2) of the Restatement (Third) of Unfair Competition may be a useful model. After setting out the elements of dilution in § 25(1), the Restatement qualifies them in § 25(2) as follows:
One who uses a designation that resembles the trademark, trade name, collective mark, or certification mark of another, not in a manner that is likely to associate the other's mark with the goods, services, or business of the actor, but rather to comment on, criticize, ridicule, parody, or disparage the other or the other's goods, services, business, or mark, is subject to liability without proof of a likelihood of confusion only if the actor's conduct meets the requirements of a cause of action for defamation, invasion of privacy, or injurious falsehood.
Here, the key distinction is not between commercial and noncommercial use, but use as a trademark versus use as commentary. The Restatement test is more effective at protecting critical expression, while still preventing "free-riders" from misappropriating the trademark owner's goodwill in order to draw attention to their own products. If limited in this way, dilution by tarnishment may have a useful role to play, because such misappropriation may injure the trademark owner even in the absence of consumer confusion. E.g. Chemical Corp. of America v. Anheuser-Busch, Inc., 306 F.2d 433 (5th Cir. 1962) (enjoining insecticide manufacturer's use of slogan, "Where there's life . . . there's bugs!").
Meanwhile, courts should give more weight to First Amendment interests in the trademark context. The Eighth Circuit wrongly declined to consider Snicker's First Amendment claims because it found that the magazine had not done enough to avoid likelihood of consumer confusion (apparently some people thought "Michelob Oily" was a real brand). The First Circuit's priorities in the L.L. Bean case were more appropriate. There the court stated:
The legitimate aim of the anti-dilution statute is to prohibit the unauthorized use of another's trademark in order to market incompatible products or services. The Constitution does not, however, permit the range of the anti-dilution statute to encompass the unauthorized use of a trademark in a noncommercial setting such as an editorial or artistic context.
L.L. Bean, 811 F.2d at 33. The court noted, however, that parodies which engendered consumer confusion would be entitled to less protection, and would be evaluated by balancing free expression against the consumer protection objectives of trademark law. Id. at 32 n. 3.
At present, only the increasingly obsolete distinction between commercial and noncommercial speech permits anti-dilution law to avoid an overt clash with the First Amendment's goal of fostering dissent and criticism of the political and cultural status quo. If anti-dilution law is to survive, it must develop a more effective safeguard against the erosion of our freedom to re-evaluate and transfigure the cultural meaning of famous trademarks and the products they represent.
*Jendi B. Reiter is an associate at O'Melveny & Myers, New York, NY.