, and maintaining registrations for several other domain-name combinations, all using the TLD <.com>.
Avery Dennison sued Appellants, alleging trademark dilution under the Federal Trademark Dilution Act and California Business and Professional Code s 14330. Avery Dennison also sued NSI, alleging contributory dilution and contributory infringement. The district court granted summary judgment to NSI on Avery Dennison's claims. The district court then concluded as a matter of law that the disputed trademarks were famous and denied summary judgment to Appellants and granted summary judgment to Avery Dennison on its dilution claims, entering an injunction requiring Appellants to transfer the registrations to Avery Dennison. 999 F.Supp. at 1342.
III
Trademark Law
Trademark protection is "the law's recognition of the psychological function of symbols." Mishawaka Rubber & Woolen Mfg. Co. v. S.S. Kresge Co., 316 U.S. 203, 205, 62 S.Ct. 1022, 86 L.Ed. 1381 (1942). Two goals of trademark law are reflected in the federal scheme. On the one hand, the law seeks to protect consumers who have formed particular associations with a mark. On the other hand, trademark law seeks to protect the investment in a mark made by the owner. Qualitex Co. v. Jacobson Prods. Co., 514 U.S. 159, 163-64, 115 S.Ct. 1300, 131 L.Ed.2d 248 (1995).
Until recently, federal law provided protection only against infringement of a registered trademark, or the unregistered
trademark analog, unfair competition. See ss 32 & 43(a) of the Lanham Trademark Act of 1946, as amended, 15 U.S.C. ss 1114,
1125(a) (1994). These causes of action require a plaintiff to prove that the defendant is using a mark confusingly similar to a
valid, protectable trademark of the plaintiff's. Brookfield, 174 F.3d at 1046.
Many states, however, have long recognized another cause of action designed to protect trademarks: trademark dilution. Lori
Krafte-Jacobs, Comment, Judicial Interpretation of the Federal Trademark Dilution Act of 1995, 66 U. Cin. L.Rev. 659, 660-62 (1998)
(discussing the evolution of the dilution doctrine). With the 1995 enactment of the Federal Trademark Dilution Act, dilution
became a federal-law concern. Unlike infringement and unfair competition laws, in a dilution case competition between the parties
and a likelihood of confusion are not required to present a claim for relief. See 15 U.S.C. s 1127 (Supp. II 1996) (definition of
"dilution"); Leslie F. Brown, Note, Avery Dennison Corp. v. Sumpton, 14 Berkeley Tech. L.J. 247, 249 (1999). Rather, injunctive
relief is available under the Federal Trademark Dilution Act if a plaintiff can establish that (1) its mark is famous; (2)
the defendant is making commercial use of the mark in commerce; (3) the defendant's use began after the plaintiff's mark became
famous; and (4) the defendant's use presents a likelihood of dilution of the distinctive value of the mark. Panavision Int'l,
L.P. v. Toeppen, 141 F.3d 1316, 1324 (9th Cir.1998) (interpreting 15 U.S.C. s 1125(c)(1)).
California's dilution cause of action is substantially similar, providing relief if the plaintiff can demonstrate a
"[l]ikelihood of injury to business reputation or of dilution of the distinctive quality of a mark ..., notwithstanding the absence
of competition between the parties or the absence of confusion as to the source of goods or services." Cal. Bus. & Prof.Code s
14330. We have interpreted s 14330, like the Federal Trademark Dilution Act, to protect only famous marks. Fruit of the Loom,
Inc. v. Girouard, 994 F.2d 1359, 1362-63 (9th Cir.1993); see 3 J. Thomas McCarthy, Trademarks & Unfair Competition s 24:108
(Supp.1998).
IV
Standard of Review
We review the district court's grant of a permanent injunction de novo. Erickson v. United States ex rel. Dep't of Health
& Human Servs., 67 F.3d 858, 861 (9th Cir.1995). To determine the legality of the injunction, we consider de novo the underlying
grant of summary judgment to Avery Dennison and denial of summary judgment to Appellants. See Margolis v. Ryan, 140 F.3d 850, 852
(9th Cir.1998). Viewing the evidence in the light most favorable to the non-moving party, summary judgment is appropriate if no
genuine issues of material fact exist and the moving party is entitled to judgment as a matter of law. Id.
V
Dilution Protection
We now turn to the dilution causes of action at issue in this case, brought under the Federal Trademark Dilution Act and
California Business and Professional Code s 14330.
In Panavision, we held that both the Federal Trademark Dilution Act and s 14330 were implicated when the defendant registered
domain-name combinations using famous trademarks and sought to sell the registrations to the trademark owners. 141 F.3d at 1318,
1327. Three differences made Panavision easier than the instant case. First, the defendant did not mount a challenge on the
famousness prong of the dilution tests. Panavision, 141 F.3d at 1324. Second, the Panavision defendant did not challenge the
factual assertion that he sought to profit by arbitrage with famous trademarks. Id. at 1324-25. Third, the diluting
registrations in Panavision both involved the TLD <.com>. In the instant case, by contrast, Appellants contest Avery Dennison's
claim of famousness, Appellants contend that the nature of their business makes the trademark status of "Avery" and "Dennison"
irrelevant, and the complained-of registrations involve the TLD <. net>.
A
Famousness
The district court considered evidence submitted by Avery Dennison regarding marketing efforts and consumer association with
its marks and concluded as a matter of law that "Avery" and "Dennison" were famous marks entitled to dilution protection. 999
F.Supp. at 1339. We hold that Avery Dennison failed to create a genuine issue of fact on the famousness element of both dilution
statutes. [FN4]
FN4. Although the famousness of "Avery" and "Dennison" is disputed, no dispute exists on the third element of dilution under
Panavision: Appellants' use must begin after the marks became famous. Any fame that Avery Dennison's marks have acquired
existed before November, 1996, when Appellants' use began.
Dilution is a cause of action invented and reserved for a select class of marks--those marks with such powerful consumer
associations that even non-competing uses can impinge on their value. See generally Frank L. Schechter, The Rational Basis for
Trademark Protection, 40 Harv. L.Rev. 813 (1927) (proposing a cause of action for dilution); Krafte-Jacobs, supra, at 689-91.
Dilution causes of action, much more so than infringement and unfair competition laws, tread very close to granting "rights in
gross" in a trademark. See 3 McCarthy, supra, s 24:108. In the infringement and unfair competition scenario, where the less
famous a trademark, the less the chance that consumers will be confused as to origin, see AMF Inc. v. Sleekcraft Boats, 599 F.2d
341, 349 (9th Cir.1979), a carefully-crafted balance exists between protecting a trademark and permitting non-infringing uses. In
the dilution context, likelihood of confusion is irrelevant. See 15 U.S.C. s 1127; Cal. Bus. & Prof.Code s 14330; Panavision,
141 F.3d at 1326. If dilution protection were accorded to trademarks based only on a showing of inherent or acquired
distinctiveness, we would upset the balance in favor of over-protecting trademarks, at the expense of potential non-infringing
uses. See Fruit of the Loom, 994 F.2d at 1363 ("[The plaintiff] would sweep clean the many business uses of this quotidian word.").
We view the famousness prong of both dilution analyses as reinstating the balance--by carefully limiting the class of trademarks
eligible for dilution protection, Congress and state legislatures granted the most potent form of trademark protection in a manner
designed to minimize undue impact on other uses. See San Francisco Arts & Athletics, Inc. v. United States Olympic Comm., 483
U.S. 522, 564 n. 25, 107 S.Ct. 2971, 97 L.Ed.2d 427 (1987) (Brennan, J., dissenting) (citing 2 J. McCarthy, Trademarks & Unfair
Competition s 24:16, at 229 (2d ed.1984)) (discussing limits on the dilution doctrine that help prevent overprotection of
trademarks).
Therefore, to meet the "famousness" element of protection under the dilution statutes, " 'a mark [must] be truly prominent and
renowned.' " I.P. Lund Trading ApS v. Kohler Co., 163 F.3d 27, 46 (1st Cir.1998) (quoting 3 McCarthy, supra, s 24.91). In a 1987
report, which recommended an amendment to the Lanham Act to provide a federal dilution cause of action, the Trademark Review
Commission of the United States Trademark Association emphasized the narrow reach of a dilution cause of action: "We believe that
a limited category of trademarks, those which are truly famous and registered, [FN5] are deserving of national protection from
dilution." Trademark Review Commission, Report & Recommendations, 77 Trademark Rep. 375, 455 (Sept.- Oct.1987).
FN5. The Trademark Review Commission's recommended amendment is very similar to the language of the eventually-enacted Federal
Trademark Dilution Act. The main difference relevant to the famousness inquiry is that the Commission's recommendation only
permitted a cause of action to the owner of a registered mark, while the owner of any protectable mark or trade name can bring
a cause of action under the enacted version of the Federal Trademark Dilution Act.
The Federal Trademark Dilution Act lists eight non-exclusive considerations for the famousness inquiry, 15 U.S.C. s
1125(c)(1)(A)-(H), which are equally relevant to a famousness determination under Business and Professional Code s 14330, see
Panavision, 141 F.3d at 1324 ("Panavision's state law dilution claim is subject to the same analysis as its federal claim.").
These are:
(A) the degree of inherent or acquired distinctiveness of the mark;
(B) the duration and extent of use of the mark in connection with the goods or services with which the mark is used;
(C) the duration and extent of advertising and publicity of the mark;
(D) the geographical extent of the trading area in which the mark is used;
(E) the channels of trade for the goods or services with which the mark is used;
(F) the degree of recognition of the mark in the trading areas and channels of trade used by the mark's owner and the person
against whom the injunction is sought;
(G) the nature and extent of use of the same or similar marks by third parties; and
(H) whether the mark was registered ... on the principal register.
15 U.S.C. s 1125(c)(1).
We note the overlap between the statutory famousness considerations and the factors relevant to establishing acquired
distinctiveness, which is attained "when the purchasing public associates the [mark] with a single producer or source rather than
just the product itself." First Brands Corp. v. Fred Meyer, Inc., 809 F.2d 1378, 1383 (9th Cir.1987). Proof of acquired
distinctiveness is a difficult empirical inquiry which a factfinder must undertake, Taco Cabana Int'l, Inc. v. Two Pesos, Inc., 932
F.2d 1113, 1119- 20 & n. 7 (5th Cir.1991), aff'd, 505 U.S. 763, 112 S.Ct. 2753, 120 L.Ed.2d 615 (1992), considering factors
including:
whether actual purchasers ... associate the [mark] with [the plaintiff];
the degree and manner of [the plaintiff's]
advertising;
the length and manner of [the plaintiff's] use of the [mark]; and
whether [the plaintiff's] use of the
[mark] has been exclusive.
Clamp Mfg. Co. v. Enco Mfg. Co., 870 F.2d 512, 517 (9th Cir.1989). [FN6] Furthermore, registration on the principal register
creates a presumption of distinctiveness--in the case of a surname trademark, acquired distinctiveness. 15 U.S.C. s 1057(b)
(1994); Americana Trading Inc. v. Russ Berrie & Co., 966 F.2d 1284, 1287 (9th Cir.1992) ("[R]egistration carries a presumption of
secondary meaning.").
FN6. The Clamp court specifically discussed a trademark in a product configuration, rather than in a word or symbol, and the
First Brands and Two Pesos courts dealt with trade dress. However, the analysis is the same. See Two Pesos, Inc. v. Taco
Cabana, Inc., 505 U.S. 763, 768- 76, 112 S.Ct. 2753, 120 L.Ed.2d 615 (1992) (applying the rules applicable to unfair
competition to trade dress); Clamp Mfg. Co. v. Enco Mfg. Co., 870 F.2d 512, 515-16 (9th Cir.1989) (applying the rule for
acquired distinctiveness to the design of a product); see generally Graeme B. Dinwoodie, Reconceptualizing the Inherent
Distinctiveness of Product Design Trade Dress, 75 N.C. L.Rev. 471 (1997) (discussing the application of trademark infringement
and unfair competition law to product design and trade dress).
However, the Federal Trademark Dilution Act and Business and Professional Code s 14330 apply "only to those marks which are both
truly distinctive and famous, and therefore most likely to be adversely affected by dilution." S.Rep. No. 100-515, at 42 (emphasis
added). The Trademark Review Commission stated that "a higher standard must be employed to gauge the fame of a trademark eligible
for this extraordinary remedy." 77 Trademark Rep. at 461. Thus, "[t]o be capable of being diluted, a mark must have a degree of
distinctiveness and 'strength' beyond that needed to serve as a trademark." 3 McCarthy, supra, s 24:109; see also Krafte-Jacobs,
supra, at 690 ("If all marks are distinctive, and a showing of distinctiveness meets the element of fame, what marks would be
outside the protection of the FTDA? [T]he FTDA does not indicate that any particular degree of distinctiveness should end the
inquiry." (interpreting the Federal Trademark Dilution Act)). We have previously held likewise under California Business and
Professional Code s 14330. Accuride Int'l, Inc. v. Accuride Corp., 871 F.2d 1531, 1539 (9th Cir.1989) (requiring more than mere
distinctiveness).
Applying the famousness factors from the Federal Trademark Dilution Act to the facts of the case at bench, we conclude that
Avery Dennison likely establishes acquired distinctiveness in the "Avery" and "Dennison" trademarks, but goes no further. Because
the Federal Trademark Dilution Act requires a showing greater than distinctiveness to meet the threshold element of fame, as a
matter of law Avery Dennison has failed to fulfill this burden.
1
Distinctiveness
We begin with the first factor in the statutory list: "inherent or acquired distinctiveness." s 1125(c)(1)(A). No dispute
exists that "Avery" and "Dennison" are common surnames--according to evidence presented by Appellants, respectively the 775th and
1768th most common in the United States. A long-standing principle of trademark law is the right of a person to use his or her
own name in connection with a business. See Howe Scale Co. v. Wyckoff, Seamans & Benedict, 198 U.S. 118, 140, 25 S.Ct. 609, 49
L.Ed. 972 (1905). This principle was incorporated into the Lanham Act, which states that a mark that is "primarily merely a
surname" is not protectable unless it acquires secondary meaning. 15 U.S.C. s 1052(e)(4), (f) (1994); Abraham Zion Corp. v.
Lebow, 761 F.2d 93, 104 (2d Cir.1985); see L.E. Waterman Co. v. Modern Pen Co., 235 U.S. 88, 94, 35 S.Ct. 91, 59 L.Ed. 142 (1914)
(pre- Lanham Act case stating that protection from confusion is available to the holder of a surname trademark that has acquired
public recognition); Horlick's Malted Milk Corp. v. Horluck's, Inc., 59 F.2d 13, 15 (9th Cir.1932) (pre-Lanham Act case limiting
the defendant's right to use his surname as a trademark where the name had acquired public recognition from the efforts of a
competitor). Avery Dennison cannot claim that "Avery" and "Dennison" are inherently distinctive, but must demonstrate acquired
distinctiveness through secondary meaning.
The drafters of the Federal Trademark Dilution Act continued the concern for surnames when adding protection against trademark
dilution to the federal scheme. On early consideration of the Act, the report from the Senate Judiciary Committee emphasized:
"[T]he committee intended to give special protection to an individual's ability to use his or her own name in good faith." S.Rep.
No. 100-515, at 43 (1988). The Federal Trademark Dilution Act imports, at a minimum, the threshold secondary-meaning requirement
for registration of a surname trademark.
Avery Dennison maintains registrations of both "Avery" and "Dennison" on the principal register, prima facie evidence that these
marks have achieved the secondary meaning required for protection from infringement and unfair competition. See Americana
Trading, 966 F.2d at 1287. We reject Appellants' argument that the distinctiveness required for famousness under the Federal
Trademark Dilution Act is inherent, not merely acquired distinctiveness. See 15 U.S.C. s 1125(c)(1)(A) (referring to "inherent or
acquired distinctiveness"). However, because famousness requires a showing greater than mere distinctiveness, the presumptive
secondary meaning associated with "Avery" and "Dennison" fails to persuade us that the famousness prong is met in this case.
2
Overlapping Channels of Trade
We next consider the fifth and sixth factors of the statutory inquiry: the channels of trade for the plaintiff's goods and
the degree of recognition of the mark in the trading areas and channels of trade used by plaintiff and defendant. s 1125(c)(1)(E),
(F). The drafters of the Federal Trademark Dilution Act broke from the Trademark Review Commission's recommendation that only
marks "which have become famous throughout a substantial part of the United States" could qualify for protection. Report &
Recommendation, 77 Trademark Rep. at 456. Instead, fame in a localized trading area may meet the threshold element under the
Act if plaintiff's trading area includes the trading area of the defendant. S.Rep. No. 100-515, at 43; Washington Speakers
Bureau, Inc. v. Leading Auths., Inc., 33 F.Supp.2d 488, 503-04 (E.D.Va.1999) (citing I.P. Lund, 163 F.3d at 46; Teletech Customer
Care Mgt., Inc. v. Tele-Tech Co., 977 F.Supp. 1407, 1413 (C.D.Cal.1997)). The rule is likewise for specialized market segments:
specialized fame can be adequate only if the "diluting uses are directed narrowly at the same market segment." Washington Speakers,
33 F.Supp.2d at 503. No evidence on the record supports Avery Dennison's position on these two prongs of the famousness inquiry.
In Teletech, fame in a narrow market segment was present when the plaintiff showed "that the Teletech Companies may be the largest
provider of primarily inbound integrated telephone and Internet customer care nationwide." 977 F.Supp. at 1409. The defendant
was "a contractor providing engineering and installation services to the telecommunications industry," and maintained the
domain-name combination, . Id. at 1409-10. The court held that the showing on the threshold element under the
Federal Trademark Dilution Act was adequate to qualify for a preliminary injunction. Id. at 1413. In Washington Speakers, both
the plaintiff and defendant were in the business of scheduling speaking engagements for well-known lecturers. 33 F.Supp.2d at 490,
503 & n. 31 (citing cases). In the instant case, by contrast, Appellants' sought-after customer base is Internet users who desire
vanity e- mail addresses, and Avery Dennison's customer base includes purchasers of office products and industrial fasteners. No
evidence demonstrates that Avery Dennison possesses any degree of recognition among Internet users or that Appellants direct their
e-mail services at Avery Dennison's customer base.
3
Use of the Marks by Third Parties>
The seventh factor, "the nature and extent of use of the same ... marks by third parties," s 1125(c)(1)(G), undercuts the district
court's conclusion as well. All relevant evidence on the record tends to establish that both "Avery" and "Dennison" are commonly
used as trademarks, both on and off of the Internet, by parties other than Avery Dennison. This evidence is relevant because,
when "a mark is in widespread use, it may not be famous for the goods or services of one business." Report & Recommendation, 77
Trademark Rep. at 461; see Accuride, 871 F.2d at 1539 (affirming the district court's holding that widespread use of elements of a
trademark helped to defeat a dilution claim).
The record includes copies of five trademark registrations for "Avery" and "Averys," a computer printout of a list of several
businesses with "Avery" in their names who market products on the Internet, and a list of business names including "Avery," which,
according to a declaration submitted by NSI, is a representative sample of over 800 such businesses. The record also contains a
computer printout of a list of several businesses with "Dennison" in their names which market products on the Internet and a list
of business names including "Dennison," a representative sample of over 200 such businesses. Such widespread use of "Avery" and
"Dennison" makes it unlikely that either can be considered a famous mark eligible for the dilution cause of action.
4
Other Famousness Factors
Avery Dennison argues that evidence of extensive advertising and sales, international operations, and consumer awareness suffices
to establish fame. We agree that the remaining four statutory factors in the famousness inquiry likely support Avery Dennison's
position. Both "Avery" and "Dennison" have been used as trademarks for large fractions of a century and registered for decades.
Avery Dennison expends substantial sums annually advertising each mark, with some presumable degree of success due to Avery
Dennison's significant annual volume of sales. In addition, Avery Dennison markets its goods internationally. See 15 U.S.C. s
1125(c)(1)(B)-(D), (G). However, we disagree that Avery Dennison's showing establishes fame.
Avery Dennison submitted three market research studies regarding perceptions of the "Avery" and "Avery Dennison" brands.
Discussion groups through which one study was conducted were formed "using Avery client lists," and produced the conclusion that
the "Avery" name has "positive associations ... among current customers." Surveyed persons in the other two studies were mostly
"users and purchasers of office products" and "[o]ffice supply consumers." The one consumer group that did not necessarily include
office supply purchasers for businesses was still required to be "somewhat" or "very" familiar with Avery products in order to be
counted.
Avery Dennison's marketing reports are comparable to a survey we discussed in Anti-Monopoly, Inc. v. General Mills Fun Group,
Inc., 684 F.2d 1316 (9th Cir.1982), proving only the near tautology that consumers already acquainted with Avery and Avery Dennison
products are familiar with Avery Dennison. See id. at 1323-24. The marketing reports add nothing to the discussion of whether
consumers in general have any brand association with "Avery" and "Avery Dennison," and no evidence of product awareness relates
specifically to the "Dennison" trademark. Although proper consumer surveys might be highly relevant to a showing of fame, we
reject any reliance on the flawed reports submitted by Avery Dennison.
Finally, Avery Dennison--like any company marketing on the Internet--markets its products worldwide. See 15 U.S.C. s
1125(c)(1)(D). By itself, this factor carries no weight; worldwide use of a non-famous mark does not establish fame. Because
famousness requires more than mere distinctiveness, and Avery Dennison's showing goes no further than establishing secondary
meaning, we hold that Avery Dennison has not met its burden to create a genuine issue of fact that its marks are famous. Avery
Dennison's failure to fulfill its burden on this required element of both dilution causes of action mandates summary judgment for
Appellants.
5
Likelihood of Confusion Remains Irrelevant
We recognize that our discussion of the breadth of fame and overlapping market segments begins to sound like a likelihood of
confusion analysis, and we agree with Avery Dennison that likelihood of confusion should not be considered under either the Federal
Trademark Dilution Act or Business and Professional Code s 14330. However, as we discuss above, the famousness element of the
dilution causes of action serves the same general purpose as the likelihood of confusion element of an infringement or unfair
competition analysis--preventing the trademark scheme from granting excessively broad protection at the expense of legitimate uses.
See Fruit of the Loom, 994 F.2d at 1363 ("Whittling away will not occur unless there is at least some subliminal connection in a