Dilution is another theory of infringement (see Infringement) that is available and one which has nothing to do with confusion. The widely cited example is the case of Eastman Photographic Materials Co. v. Kodak Cycle (Eng. 1898). Eastman is obviously that brand recognized as "Kodak" and the other party sold bicycles. The court was well aware that there was no likelihood of confusion but nonetheless granted Eastman an injunction on the grounds that the use of "Kodak" on bicycles would harm Eastman, even if there was to possibility of confusion as to source.

In a more recent U.S. case, Mortellito v. Nina of California (S.D.N.Y. 1972), the court succinctly stated the harm caused by dilution as follows:

Dilution is an injury that differs materially from that arising out of the orthodox confusion. Even in the absence of confusion, the potency of a mark may be debilitated by another's use. This is the essence of dilution. Confusion leads to immediate injury, while dilution is an infection, which if allowed to spread, will inevitably destroy the advertising value of the mark.

The obvious question here is what marks are entitled to this kind of protection? The Federal Trademark Dilution Act of 1995 (FTDA) added a dilution statute to the Lanham Act (see section 1125(c)),  and helps answer this question. Essentially, this Act codifies protection from dilution of "famous marks." What exactly was Congress attempting to fix with the FTDA? An excerpt from the legislative history of the act may shed some light:

[The intent is to] create a federal cause of action to protect famous marks from unauthorized users that attempt to trade upon the goodwill and established renown of such marks, and thereby, dilute their distinctive quality. ... The bill defines the term "dilution" to mean "the lessening of the capacity of a famous mark to identify or distinguish famous goods or services regardless of the presence or absence of (a) competition between the parties, or (b) likelihood of confusion, mistake or deception." Thus, for example, the use of DUPONT shoes, BUICK aspirin, and KODAK pianos would be actionable under this legislation.

The concepts of trademark "blurring" and "tarnishment" are treated as a subset of dilution (see The Coca-Cola Company v. Gemini Rising Inc. (E.D.N.Y.1972)).

Comments: The USSC, in the case of Moseley v. V Secret Catalogue, Inc. (2003), reversed a summary judgment in favor of Victoria's Secret, by holding that the evidentiary requirements of the FTDA had not been met. The Court stated as follows:

Noting that consumer surveys and other means of demonstrating actual dilution are expensive and often unreliable, respondents and their amici argue that evidence of an actual "lessening of the capacity of a famous mark to identify and distinguish goods or services," §1127, may be difficult to obtain. It may well be, however, that direct evidence of dilution such as consumer surveys will not be necessary if actual dilution can reliably be proven through circumstantial evidence--the obvious case is one where the junior and senior marks are identical. Whatever difficulties of proof may be entailed, they are not an acceptable reason for dispensing with proof of an essential element of a statutory violation.

Many commentators believe that the USSC has essentially taken the "teeth" out of the FTDA ( see Deere & Company v. MTD Holdings, Inc. (S.D.N.Y. 2003); Savin Corporation v. The Savin Group (S.D.N.Y. 2003)).