The Navajo Nation has been involved in a trademark infringement and dilution dispute with Urban Outfitters (UO) since 2012. UO labels many of its products as "Navajo” or Navaho." One particular piece of clothing that drew the Nation's ire is a "Navajo Hipster Panty" that UO sells.
After the case originally became public, there was huge public backlash against UO. In response to this, and a cease and desist order from the Navajo Nation, UO took down the most offensive of the uses. However, the Navajo Nation alleges they still use the term in some products through subsidiaries such as Free People.
The Navajo Nation argues that these items from UO that bear the “Navajo” descriptor violate their trademark on "Navajo" for clothing, jewelry, and several other groups. They are seeking a remedy of either all revenue made on the offending products since 2008, or $1,000 per day per item sold.
In 2013, Urban Outfitters lost their argument that "Navajo" is a generic term and should therefore not receive trademark protection. A few months ago they lost another bid to end the case based on an argument that the Navajo Nation waited too long to bring its claim.
While this long fought case has seen victories for the Navajo Nation, last month the Nation was struck a serious blow. The Navajo Nation lost their dilution argument on summary judgment. The court stated that "Navajo" wasn't famous enough to qualify for dilution.
How Dilution Works
Dilution is a legal doctrine that serves to protect particularly famous trademarks. A lawsuit alleging trademark infringement needs to establish that the accused party has made unauthorized use of a valid trademark on a competing or related product to the plaintiff’s mark. It must further show that this use has a likelihood of confusing the average consumer.
Where a trademark is famous enough, it can bring a dilution claim. Dilution doesn’t need to show any confusion from consumers or even competition between the owner of the famous mark and the accused party’s product. Instead the owner simply needs to show blurring (that there is a likelihood of dilution in the consumer’s mind between the mark and their product) or tarnishment (a likelihood that association with the accused person’s use of the mark would damage the reputation of the owner’s mark).
This is incredibly powerful and wide-reaching protection, providing a long lasting monopoly on a particular mark. It is because of this that the evidentiary standard to be considered famous is very high. A mark is considered famous when it is widely recognized by the general consuming public of the United States as a designation of source of the goods or services of the mark's owner. You can’t just be “niche famous”—famous in select areas or with select groups—you have to be famous with the general public. In determining this, substantial evidence is required. The court generally looks to the following factors:
- How long and how much the mark has been used or advertised;
- The places the mark has been used;
- How distinctive the mark is;
- How easily recognized the mark is;
- The means by which the product was sold and marketed;
- The use of the mark by third parties; and
- Whether the mark was federally registered.
Where a claim of dilution is successful, the remedy is generally a court order telling the accused to stop using the mark. However, where the accused party intended to trade on the mark holders good name or to damage the marks reputation through their use, monetary damages are available.
Diluting the Navajo Nation
The Navajo Nation owns 86 federal trademarks using “Navajo” covering areas from clothing to casinos, and numerous sections in between. As evidence of the fame of their mark, the Nation pointed to the fact that they had been selling products as Navajo for over 150 years. They also provided evidence of their widespread distribution network, the $3.8M spent annually on promoting their “Navajo” mark, previous licensing deals between the Navajo Nation and clothing designers, and the high value of Navajo goods.
The court however, did not think this was enough evidence to consider the “Navajo” trademark famous. While the evidence given was enough to show the distinctiveness of the trademark—an element establishing the strength of a trademark against infringement claims—the court did not think that the Nation provided evidence sufficient to establish that “Navajo” is a household name. They ruled that the evidence was at most enough to show that “Navajo“ was “niche famous.”
Navajo seems like it should be a famous term, as it represents an entire culture. However, the court seems to assert that the Navajo Nation and their counsel simply didn’t present enough evidence. The level of fame required for dilution is extremely high; courts have struck down dilution claims from the University of Texas and Cristal champagne. What’s more, most successful dilution claims offer as evidence survey results showing how well known a mark is to the public. The Navajo Nation submitted no such survey as evidence. This lack of evidence as to the percentage of consumers that knew their mark and the regions where the mark was well known was likely fatal to their dilution claim. While the Navajo Nation argued that evidence of their fame was publically available from their long history, the court felt a dilution claim required more evidence than that.
The factors in determining fame look to the history, sales, and renown of the mark itself—not the origins of the word that constitutes the mark. Using these metrics, the fame of the “Navajo” mark may indeed be insufficient for a dilution claim. While the sales of Navajo goods and their promotion are fairly substantial, they are not on the level of a huge brand like McDonalds or Starbucks.
Even if this is a decision based on Navajo’s counsel not presenting enough evidence, the premise that the Navajo tribe is not famous with the consuming public is a decision with tragic implications. It can be construed as a bare assertion that the culture of the Navajo tribe has been so erased within their country of origin as to not be recognizable as a house hold name. The Navajo are the second largest Native American tribe in the U.S. with over 300,000 members. A U.S. court describing them as “niche famous” certainly does not feel right, regardless of the legal realities of the case.
Is the Navajo Nation Out of Luck?
While the loss of their dilution claim is a blow, this case is far from over for the Nation. They still have six different claims pending against Urban Outfitters. These claims include a regular trademark infringement allegation and an accusation the Urban Outfitters violated the Indian Arts and Crafts Act of 1990(IACA).
The IACA forbids advertising goods in a manner that indicates that they are made by any single Native American or Tribe if that is not the case. Where a business violates the IACA they can be prosecuted and fined up to $1,000,000.
These claims both have a real chance of success. While the dilution ruling contains a disappointing message as to the undermining of a culture that preexists the formation of the U.S. by centuries, this is far from the last we’ve heard of this case. Urban Outfitter’s may still end up paying for their panties.
Authored by Jonathan Lurie, LegalMatch Legal Writer and Attorney at Law
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