USA – TEXAS Trends and Developments Contributed by: John Flaim and Dyan House, Baker McKenzie
the brand owner must show that its mark was famous before the accused use began. Courts consider various factors in making a determina - tion of fame, including: • duration, extent, and geographic reach of advertising and publicity of the mark; • amount, volume, and geographic extent of sales of goods or services offered under the mark; • extent of actual recognition of the mark; and • whether the mark has been registered on the Principal Register of the US Patent and Trademark Office. Here, the Court found that Jack Daniel’s met this criteria. Jack Daniel’s is the best selling whis - key in the United States, has billions of dollars in sales, extensive advertising, and has global recognition. Consumer awareness of the Jack Daniel’s brand consistently sits around the 98% mark. ii) Similarity Under the TDRA, a party need only show similar - ity between the famous mark and the accused mark to support a likelihood of dilution finding. The District Court noted that the TDRA does not require a finding of substantial similarity or identicalness in order to find that the marks are similar. While the TDRA does not set forth clear factors for the comparison of the marks, courts look to some of the same factors used in trade mark infringement – appearance, sound, and meaning. In the Bad Spaniels case, the Court found that VIP Products set out to create a toy that mimicked nearly all aspects of the Jack Daniel’s whiskey bottle including names, bottle shape and size, font choices, colours, etc.
iii) Reputational harm The final factor to consider in a dilution by tar - nishment case is whether the accused use caus - es reputational harm to the brand owner. As the Second Circuit noted in Tiffany (NJ) Inc. v eBay, Inc., reputational harm arises “when the plain - tiff’s trade mark is linked to products of shoddy quality, or is portrayed in an unwholesome or unsavory context likely to evoke unflattering thoughts about the owner’s product.” In the Bad Spaniels case, the parties presented expert testimony with regard to reputational harm. The Court found the testimony from the Jack Daniel’s expert to be more compelling as he has “special - ized knowledge and specific expertise in con - sumer psychology to evaluate and conclude that there is a likelihood of a tarnishing effect of the ‘Bad Spaniels’ dog toy upon Jack Daniel’s trade - marks and trade dress.” VI) Trade mark infringement The Court noted that Jack Daniel’s needed to prove three elements to succeed in its trade mark infringement claim: • distinctiveness; As the Court previously ruled that Jack Daniel’s trade mark and trade dress are, as a matter of law, distinctive and non-functional, the only con - sideration was the likelihood of confusion ele - ment. For this analysis, the Court applied the Sleekcraft factors, which are to be considered in any likelihood of confusion analysis in the Ninth Circuit. As with the reputational harm element of the dilution by tarnishment claim, the par - ties relied on expert testimony for the likelihood of confusion factor. Finding that VIP Products • non-functionality; and • likelihood of confusion.
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