Dilution can weaken a trademark’s appeal

| Mar 20, 2020 | Intellectual Property Litigation

The main issue that crops up when someone infringes on a trademark is that they may use it to make sales. For instance, they could use the logo of a famous company to produce knock-off items and sell them for far less. Every sale that they make potentially takes a sale away from the company that owns the trademark. They can potentially lose a lot of income over the issue.

However, there is a much larger issue to consider, as well, which is the weakening of the trademark. This is known as dilution. It impacts the way that the public sees the trademark, and therefore, lowers the value of that mark.

For instance, perhaps a company makes luxury outdoor clothing that is known for its durability. A second company starts using the mark to sell outdoor clothing that looks similar but that does not hold up nearly as well. People buy it by mistake and are unimpressed with the quality.

Over the years, the first company built up a reputation for quality. That’s how they justify the high prices. This process of dilution can make the public believe that the products are not nearly as good as advertised and not worth the listed price. This, in turn, causes the original company to lose sales or lower their prices. It harms their brand. They have to think about their reputation, which extends far beyond a handful of sales of knockoff goods.

This is just one example, but it shows how detrimental dilution can be and why everyone needs to make sure they know their legal options.