For the last decade, the biggest question in trademark law has been how to prove dilution. This is a clear sign of something. Can no smart attorney, judge or social scientist figure out what dilution is and how to prove it? Dilution has proven to be a "dauntingly elusive concept," according to the Fourth Circuit. Even the Supreme Court does not "get" dilution. In oral arguments in Moseley v. V. Secret Catalog, nearly all of the questions from the Justices were seeking to simply understand what dilution is.
Other courts either do not get dilution, or else they just do not like it. Courts that have ruled in dilution cases have read additional restrictions into the act. What these courts are doing can be characterized as "judicial nullification." These courts seem to be uncomfortable with the apparent breadth of the new right and are seeking to reign it in with additional limitations. The Supreme Court in the V. Secret case also evidenced some distaste for dilution, but admirably tried to wrestle it down nonetheless. The Court ultimately failed to define dilution and acknowledged this by holding that whatever dilution is, at least you have to prove it.
Trademark owners desire a likelihood of dilution standard rather than an actual dilution standard because they cannot prove actual dilution. They cannot prove actual dilution because there is no such harm. The Supreme Court could not provide guidance because they could not articulate the harm that needed to be proved. The trademark bar takes it on faith that dilution exists and would like it to be presumed. The main problem with dilution law is that it provides a remedy without a supportable theorization of the harm.
It is not a strong sense of harm that is motivating the push for dilution protection. Instead, it a strong reaction to a perceived sense of the bad faith on the part of defendants. When defending dilution, proponents frequently state that defendants in dilution cases can only have bad faith intentions to use these famous marks. So dilution protection is desired not so much to protect famous trademark owners' property, but instead to protect against others' free rides.
If dilution is really about preventing the unfair advantage that results from the non-confusing use of a famous mark, then this really is unfair competition legislation. But an unfair competition right without strict boundaries could easily become a right in gross for the trademark owner.
Farley, Christine Haight, Trademark Dilution Law: A Remedy in Search of a Harm. Fordham Intellectual Property, Media & Entertainment Law Journal, Vol. 16, p. 101, 2006.