I

Eastman Kodak Company

Statement of David C. Stimson

Chief Trademark Counsel

Committee Print to Amend the Federal Trademark Dilution Act

House Subcommittee on Courts, the Internet and Intellectual Property

April 22, 2004

David C. Stimson

Chief Trademark Counsel

Eastman Kodak Company

343 State Street

Rochester, New York 14650-0205

(585) 724-6732

I. Introduction

Good morning, Mr. Chairman. Thank you for inviting me to testify. My name is David Stimson. I am Chief Trademark Counsel for Eastman Kodak Company in Rochester, New York where I have been employed for the past 18 years.·

Kodak supports amending the Federal Trademark Dilution Act (FTDA) [1] to address issues raised by the Supreme Court’s decision in Moseley v. V Secret Catalogue, Inc.[2] This decision will hamper the ability of owners of famous trademarks like KODAK to protect their intellectual property from third party uses that either blur or tarnish. Blurring and tarnishment are the two forms that dilution can take. In Moseley, the court said that the owner of a famous mark must wait until there is some sort of demonstrable harm before a judge can issue an injunction in a dilution case. The court also raised the possibility that tarnishment of a famous mark may not be actionable under the current statute.

II. The KODAK Trademark

The FTDA was designed to protect famous trademarks like KODAK. In the nearly 125 years since it was first coined, the KODAK trademark has been used on billions of products and has generated hundreds of billions of dollars of revenue. During that time Kodak has employed millions of American workers. Kodak has used the KODAK trademark on all its products and in all its advertising, gaining the loyalty and trust of hundreds of millions of American consumers over six generations.

As a result, the KODAK trademark today is one of the strongest and most famous trademarks in the United States and around the world. It was even cited by Congress as a famous mark when the FTDA was adopted in the mid-1990s[3] as well as by the United States Supreme Court in its Moseley decision.[4] Surveys of brand value consistently place the KODAK trademark at the top of the list of the world’s most valuable trademarks. The Forrester 2003 Technology Brand Scorecard placed KODAK number two among 58 major technology brands and number one in terms of usage and recognition. KODAK was the number one U.S. brand in the 2002 WPP Brandz study that measured consumers’ bonding with over 17,000 brands. [5] Independent news reporters have called KODAK “one of the world’s best known brands” [6] and have said that “[f]ew American companies have the kind of brand loyalty and history that Kodak has ….” [7] So important is the KODAK trademark to our company that our CEO Dan Carp has listed “brand strength” as the first among our five “core competencies.”

Because the KODAK trademark is so important to our company, Mr. Chairman, I am grateful to have the opportunity to appear here today and share with the subcommittee the importance of the FTDA to Kodak and to recommend ways in which the statute should be revised.

III. Using the FTDA to Protect the KODAK Mark

Just as Kodak has worked hard to establish the KODAK trademark, my colleagues and I work hard to strengthen and protect it. Kodak is proud of the high quality of the products and services it offers under the KODAK brand and we spend billions of dollars on manufacturing quality and improvements to deliver products and services worthy of the KODAK trademark. We also have spent millions of dollars registering KODAK as a trademark, understand its value, and are serious about protecting our ownership rights.

The FTDA has been an important and effective part of our strategy in protecting the KODAK brand from blurring and tarnishing uses before it is irreparably damaged. To insure that we are able to take action under the FTDA before the damage has become irreparable it is important that Kodak and other owners of famous trademarks be able to stop uses that create a likelihood of dilution. For example, if we were faced with KODAK Condoms, KODAK Vodka or KODAK Escort Service, we would want to act quickly under the FTDA to obtain a preliminary injunction and stop these diluting uses at the earliest possible moment.

IV. The Supreme Court Decision in Moseley and Its Impact on Use of the FTDA

In the Moseley decision, the Supreme Court said that the statutory text of the FTDA leads to the conclusion that a famous mark owner must prove actual harm before a court issues an injunction in a dilution case. Mr. Chairman, an actual harm standard seriously undercuts the effectiveness of the statute.

A trademark embodies the goodwill and reputation of the company that owns it and serves as the company’s face to its customers and to the world. Reputations take years to build up but can be destroyed instantly, as we have seen all too often in the recent corporate and accounting scandals. If a corporation such as Kodak, which has built up its reputation over a period of a hundred years through billions of individual transactions and interactions with its customers, has to wait until it is able to prove actual harm before it can obtain an injunction to stop the dilution of its trademark, it would be too late. The damage would be irreparable.

A requirement that Kodak show actual harm would mean spending months litigating at the potential cost of hundreds of thousands of dollars in legal and survey fees. But even more importantly, in the meantime the dilution would continue and the value of our trademark would be constantly diminishing at a huge cost that could not be calculated. Once the injunction was finally issued, the damage to our trademark would already have been done.

In the real world, once the singularity of a famous mark has been blurred and the sterling reputation of the mark has been tarnished, the genie is out of the bottle and any court-ordered injunction or damages comes much too late. Our reputation would have been taken over by someone else and, by the time we were able to show actual harm, our reputation would never again be ours alone.

V. Kodak Supports a Likelihood of Dilution Standard

Kodak believes that the best way to assure the effectiveness of a federal dilution statute is to specifically incorporate a likelihood of dilution standard into the law.

Such a standard allows the trademark owner to stop the damage to the distinctiveness of its famous trademark before it becomes irreparable. It insures that the singular meaning of the trademark – its unique identification with the trademark owner alone and nobody else – will continue.

I would like to illustrate this point with a hypothetical example that is based on real problems that Kodak has faced over the years. Because of the strong and positive reputation of the famous KODAK trademark and because it is so closely identified with photography, our KODAK brand often is used to identify photographs for which Kodak has had no involvement or responsibility.

If Kodak were to be used as the name of a magazine containing photographs of child pornography the damage to Kodak’s image as a family-oriented company that can be trusted with the pictures and memories of life’s special moments is obvious. Obvious too is the damage to the KODAK trademark that would result from this misuse. However, if we were required to prove actual dilution, the sales of these magazines would continue and proliferate around the country. Even after we had shown actual dilution we never would be able to retrieve all those magazines. Our KODAK trademark would forever have been associated by everyone who saw those magazines with child pornography, not with our company and the products which we so proudly sell.

Granting relief based on a showing of likelihood of dilution is essential for the owners of famous trademarks to enable them to quickly stop this kind of serious damage to their reputation and goodwill.

VI. Tarnishment, Blurring, and the First Amendment

The Moseley decision also created ambiguity as to the protection that the FTDA offers against tarnishment. “Tarnishment occurs when a famous trademark is linked to products of shoddy quality, or is portrayed in an unwholesome or unsavory context.”[8] The court in Moseley said: “Whether it [tarnishment] is embraced by the statutory text … is another question.”[9]

To remedy this ambiguity, Kodak supports adding to the FTDA an express cause of action for likelihood of dilution by tarnishment.

As long as the KODAK trademark has value there will be dishonest people out there who try to take advantage of it to make a quick buck, often in ways that disparage our valuable property. We see all too much of this in the Internet world, where unscrupulous scam artists use our KODAK trademark in the domain names of websites that tarnish our KODAK trademark and identity.

Some recent examples are “kodak.net” as the domain name of a website linked to a gambling casino, “kodaq.net” for a professional male escort and “kodakcompany.com” for nude and lingerie models. Under some court decisions it is far from certain that such misuses would be held to be dilution by blurring, on the dubious ground that once websurfers go to the actual website it is clear what entity they are dealing with.

The FTDA should be amended to make it clear that uses like these, which use our trademark in connection with unsavory activities and tarnish its value, constitute dilution.

If there is a separate cause of action for likelihood of dilution by tarnishment, then it is reasonable that Congress also create a cause of action for likelihood of dilution by blurring. Whereas tarnishment focuses on a famous mark’s reputation, a likelihood of dilution by blurring should address the loss of a famous mark’s distinctiveness, specifically the capacity of the famous mark to stand as an identifier for a single source.

This would address situations in which there is not a direct negative or derogatory connotation from the diluting use, but the second use serves to place into the public’s mind an entity other than the original trademark owner. This blurs the distinctiveness of the famous trademark so that it no longer is associated with a single source.

We faced this situation several years ago with a company that was using our trademark slogan “A KODAK MOMENT” as the punch line for greeting cards that it was selling. There was nothing obscene or derogatory about the cards, so they would not have been actionable under a tarnishment standard, but they did blur the distinctiveness of our KODAK trademark by associating it with the card manufacturer and its joke, rather than with Kodak as the owner of the mark and the source of all KODAK-branded products.

For these reasons, both tarnishment and blurring should be explicitly listed as grounds for dilution in the FTDA.

VII. Conclusion

Thank you, Mr. Chairman, for this opportunity to testify. Revising the FTDA is a matter of great importance to Eastman Kodak Company. We therefore ask for your support in passing the appropriate legislation and your assistance to Kodak and other U.S. companies in protecting their valuable trademark assets.

· My volunteer activities in the trademark community include service on the U.S. Patent and Trademark Office Trademark Public Advisory Committee from 2000 to 2003 and with the International Trademark Association. I served as INTA president between May 1997 and May 1998. My comments here today concerning revision of the FTDA, however, are only on behalf of Kodak.

[1] Pub. L. No. 104-98, 109 Stat. 505 (1995).

[3] Federal Trademark Dilution Act of 1995, 104 H. Rpt. 374 (referring to dilution by the introduction of KODAK pianos).

[5] “The 2003 Tech Brand Scorecard”, Forrester Research, Inc.; Wholeview Technologies Research Brief, October 28, 2003.

[6] Robert Siegel, “All Things Considered”, National Public Radio, September 25, 2003.

[7] Jim Zarroli, “All Things Considered”, National Public Radio, September 25, 2003.

[8] 2 Jerome Gilson, Trademark Protection and Practice § 5A.01[6], at 5A-55 (Rel. 50-December 2003).