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Understanding trademark dilution under California law

Dilution is when the value of something is decreased. So, trademark dilution is when one company infringes upon a trademark and it leads to consumer confusion and a decrease in the value of the trademark. California has specifically addressed trademark dilution in the state’s Business and Professions Code.

When a company uses a mark that is well-known and distinct, it receives protection against anyone else using that mark without its permission. It is important to note, though, that this protection is limited. The law does not protect a mark if it is being used to compare goods or services, in a parody, in commenting on the goods or services, non-commercially or in news reporting.

If dilution occurs, the owner of a mark has some legal options. First, the owner is able to stop the other company from using the mark. The court may seize all goods or components from the infringing company, that are involved in the selling and making of goods using the mark. If a counterfeit mark is being used, the court may even order the goods and components to be destroyed. The owner is also entitled to damages, which include lost profits and compensation for any harm resulting from the infringement.

As explained by the National Paralegal College, dilution only applies in the case of a mark that is considered “famous.” This means it is well-known and recognizable by people in the area as belonging to a specific company. For example, there are many counterfeit goods that mimic those of the luxury goods brand, Louis Vuitton, which is globally known. As for the confusion point, consumer confusion does not always have to be proven, especially if it is found that the use of the mark is damaging in some way to the original owner’s business. 

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