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Use of Common Words in Trademarks Can Still Dilute
By Harry Zhou – Edited by Jad Mills

Visa Int’l Serv. Ass’n v. JSL Corp., No. 08-15206 (9th Cir. Jun. 28, 2010)
Slip Opinion

On June 28, 2010, the Ninth Circuit affirmed the U.S. District Court for the District of Nevada’s grant of summary judgment for Visa International Service Association (“VISA”) on its trademark dilution claim against JSL Corporation (“JSL”).

Chief Judge Alex Kozinski delivered the opinion, holding that JSL’s “eVisa” mark had diluted VISA’s “Visa” mark under 15 U.S.C. § 1125(c)(2)(B) (2006). The court found that JSL’s “eVisa” brand had created a situation in which two different products, namely VISA credit cards and JSL’s eVisa.com, competed for association with the word “Visa.” The court explained that although the word visa has a common meaning, the Visa mark can still be diluted by a junior user who is not using the word according to that common meaning. And since Orr did not dispute that the “Visa” mark was famous and distinctive before JSL started to use “eVisa,” the court upheld summary judgment.

Reuters provides a summary of the opinion. Seattle Trademark Lawyer briefly analyzes the court’s rationale. Eric Goldman’s Technology and Marketing Law Blog criticizes the decision.

Joseph Orr was the owner of eVisa.com, an Internet-based business that provided “multilingual education and information.” According to Orr, the use of the word “visa” in “eVisa” was meant to “suggest the ‘ability to travel, both linguistically and physically, through the English-speaking world.’” In 2002, the global financial services provider VISA sued JSL, the entity through which Orr operated eVisa, claiming that JSL’s use of “eVisa” diluted VISA’s “Visa” trademark under federal anti-dilution law. VISA did not advance a “likelihood of confusion” claim. The U.S. District Court for the District of Nevada granted summary judgment for VISA. JSL appealed.

The Ninth Circuit reviewed the district court’s grant of summary judgment de novo. Since the parties did not dispute that “Visa” had evolved into a famous brand long before Orr started to use “eVisa” in commerce, the propriety of the grant of summary judgment turned on whether JSL’s use of “eVisa” was likely to dilute the “Visa” trademark.

In determining the likelihood of dilution, the court examined “the similarity between the two marks and “the distinctiveness and recognition of plaintiff’s mark.” See 15 U.S.C. §§ 1125(c)(2)(B)(i), (ii), (iv). The court found that the two marks were “effectively identical” because prefixing “e” to the word “visa” did not distinguish the marks any more than appending “visa” with words like “Corp.” or “Inc.”. The court was also quick to conclude that the use of the “Visa” mark was distinctive, reasoning that but for VISA’s goodwill, the word “visa” would “[draw] on positive mental association with travel visas,” not credit cards.

JSL had argued that because the word “visa” had a common English definition, the mark “eVisa” could not cause dilution. The court agreed that if JSL had indeed been using the word “visa” for its literary definition, the case would have been a difficult one to decide. Granting anti-dilution rights as such, the court reasoned, would “deplete the stock of useful words.” For example, anti-dilution law did not intend for the trademark “Camel” to preempt the use of “Bactrian Camel Breeder” as another mark. Nonetheless, the court found JSL’s use of “visa” merely a heavy-handed allusion to the word’s ordinary meaning, and had in fact created a novel association between the word “Visa” and multilingual education services. As a result, VISA credit cards and JSL’s services were both competing for association with the “visa” mark. The court decided that this was the “quintessential harm addressed by anti-dilution law” and affirmed summary judgment accordingly.

This opinion has demonstrated that a trademark may cause dilution even when the words in question have common English definitions. Therefore, holders of trademarks that share commonly used words with preexisting strong trademarks now face increased litigation exposure to trademark dilution claims in the Ninth Circuit.

Harry Zhou is a 2L at the Harvard Law School.

Posted On Jul - 13 - 2010 Comments Off

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