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What is trademark dilution?

On Behalf of | Feb 9, 2024 | Intellectual Property

Trademark infringement is when another company uses trademarked material without express permission. For instance, a company may make cheap sunglasses and then put the logo of a famous sunglasses company on their products. They’re just trying to trick consumers into thinking that they are legitimate products so they can charge more money for them.

This is certainly an illegal practice, but it can lead to an even bigger issue, which is known as trademark dilution. Dilution can also happen if a company just has a protected mark that is very similar to a mark that is already famous. This similarity – or direct infringement – can dilute the value of that original trademark so that it isn’t worth as much as it was previously.

Why would this happen?

The issue is often with product quality. Say that the first company sells their sunglasses for $300. These are expensive, so they rely on their reputation for having top-notch quality. As a designer brand, they make sales even though there are many cheaper options on the market.

But when someone else is using a similar mark, or using the same mark without permission, consumers may become wary when they’re buying a product. Is it real or not? If they can’t tell, then that already decreases the value of the original trademark. People will be suspicious and wonder if they’re buying low-quality products – meaning that they are less likely to trust that trademark and buy the genuine products for higher prices.

As you can imagine, something like this can have a major negative financial impact on a company. If this has happened to your business, take the time to look into all of your potential legal options.