Rochelle Dreyfuss on dilution

Rochelle Dreyfuss, NYU School of Law: Her general doubts about extensions of TM law including initial interest confusion, post sale confusion, and dilution, have been mentioned by many people. V’s Secret was good because it said “If you believe in dilution, show it to me – prove there’s a harm that needs to be alleviated.” The need for limits on TM is especially clear on the internet, where people are trying to attract audiences. In real space, people are sometimes allowed to “free ride” on others’ territory to reach audiences.

Other reasons for skepticism about dilution: TMs are capable of generating goodwill, but Schechter never asked whether people would buy Dupont shoes. The more dominant you make your mark, the less likely it is to be subject to free riding in distant markets.

The ultimate question about dilution is its effect on customers, which Jacoby addressed. Consumers’ rationality is bounded. Consumers may satisfice and not look further after a moment of recognition. That’s part of what TM holders are trying to capture: the ability to be able to present consumers with a product they’ll buy automatically. But the moment taken for the consumer to search through her own mind is when she considers other products and asks whether there’s a better product – when the unseen hand of the market rummages through her brain. So depriving consumers of that moment may not be efficient overall even if it helps the TM owner. If consumers aren’t going to compare products, there’s no need for goodwill, only a need for advertising/branding.

She questions the entire quest: the idea that we can get rid of overlapping usages and create a marketplace without confusion or dilution. Interjurisdictional cases, for example, will always be problematic. Different products start to converge, as with Apple Music/Apple Computers. Geographic indications overlap with TMs. Add to that all the exceptions that already exist allowing a mark to be reproduced by those who don’t own it: newsworthiness, political uses, fair uses, comparative ads, noncommercial uses. Consumers will always have to devote effort to deciphering marks. Is the thrust of dilution entirely wrong? Shouldn’t we be trying to figure out how to help consumers resolve ambiguity rather than quixotically trying to suppress it?