Does Dilution 'Dilute' the First Amendment?: Trademark Dilution and the Right to Free Speech after Tam and Brunetti

Abstract

Trademark dilution, a legal theory allowing owners of famous trademarks to prevent others from weakening their marks' source-identifying power despite lack of consumer confusion, is controversial because it reveals the tension between trademark law and free speech. It has long been argued that laws against dilution violate the First Amendment by giving trademark owners an intellectual interest that exceeds a trademark's source-identifying function. As trademarks are governed by both federal and state laws, dilution laws exist at both the state and federal levels.

One type of dilution occurs when any similar trademark is likely to decrease, by milliseconds, the processing speed with which consumers associate the famous trademark with its source. The other type of dilution occurs when any similar trademark “tarnishes” a famous trademark, usually by leading consumers to, at least momentarily, associate a famous mark with a vice or sexual reference. These concepts are extremely abstract, difficult to define or measure, and unduly favorable to famous brands; however, the First Amendment requires that regulations on commercial speech justify a government interest that is substantial, in a way that does not broadly suppress speech. Although relatively recent federal dilution statutes have added First Amendment exemptions to try to protect free speech, these exemptions are too discretionary and loosely defined to ensure that free speech is consistently upheld. For these reasons, scholars have long posited that dilution laws are contrary to the First Amendment.

While the anti-dilution argument is not new, recent cases reveal a shift in judicial attitudes towards trademark law's relationship to the First Amendment, making courts now more amenable to overturning dilution law. In the past, courts more or less assumed that dilution laws were constitutional–as no trademark statute had been deemed unconstitutional since the 1800's–and then developed various means to justify that end. In 2017, that changed when the United States Supreme Court in Matal v. Tam struck down a federal statute that had prohibited federal trademark registration for “disparaging” trademarks. The Court decided that this content-based registration bar violated the First Amendment's free speech clause. In 2019, the U.S. Supreme Court used the same reasoning to invalidate a second registration bar against “immoral” trademarks. Although only registration was denied (and any banned trademarks could still be used freely in commerce), the courts still held that blanket restrictions on certain types of trademarks did not serve a substantial government interest and were too unlimited in scope to be justifiable.

These problems are even more pronounced in the context of trademark dilution, which bars not only registration but also use in commerce for trademarks that are found to dilute famous marks. Although the disparagement and immorality clauses are not perfectly analogous to trademark dilution, they signal that courts are at least willing to consider the possibility that certain trademark statutes are not compatible with the First Amendment. Considering the serious First Amendment problems that dilution laws cause, these controversial laws may no longer pass muster.

Keywords: trademark, dilution, First Amendment, Tam, Brunetti

JEL Classification: K20