Dilution

Dilution refers to the use of a trademark by an unauthorized party such that it lessens the value of the trademark to the trademark owner. The Trademark Act of 1946 prohibits dilution.

Dilution can occur with any unauthorized use of a trademark. However, dilution occurs most commonly when the unauthorized party uses it for non-competing products or services. Unauthorized use of a trademark for non-competing products and services is also the most damaging to the trademark owner.

Dilution occurs when there is confusion with members of the public who consume a trademarked product or service about what the trademark represents. When an unauthorized user of a trademark applies that trademark to a similar product or service, the industry where the trademark is used may remain clear, although the unauthorized user is still infringing on the owner's trademark. However, when an unauthorized user uses the trademark for a non-competing product or service, the public perception can become unclear on the types of products and services represented by the trademark. Thus, the unauthorized use dilutes the trademark, making the trademark less valuable to the trademark owner.

Dilution is most damaging when the trademark involved is famous. Infringement of a relatively unknown trademark, while illegal, may have no impact on public perception, as consumers of the intended products and services may not be aware of use of the trademark elsewhere.