Is Yahoo Diluting the XBox 360 Mark?

I had an interesting experience just now on Yahoo.com that directly relates to what we are going over in my IP class this evening. There is a hyperlink in the Yahoo services box title "360" (w/the degrees symbol). I clicked on this link thinking it would give me the latest information on Microsoft's XBox 360, but instead I was brought to a page that offered me the opportunity to set up my own Yahoo blog, photos and writing space ala MySpace. Would Yahoo's use of the mark "360" constitute trademark dilution of Microsoft's Xbox 360 mark ?

Dilution is defined as "the lessening of the capacity of a famous mark to identify and distinguish goods or services." (15 U.S.C. 1127). In an action for trademark dilution, Microsoft would first need to show that "360" has become a famous mark. It would then need to prove that Yahoo intended to use the reputation of the Microsoft's game console to promote its own it's own "360" product, and that such a use actually caused injury in blurring the "360" mark.

First, to establish whether "360" is a famous mark would depend on a balancing test of numerous factors laid out by courts. "These factors include:
(1) the degree of inherent or acquired distinctiveness of the mark, i.e. how unique is the mark;
(2) the length of time in which the alleged famous mark has been in use;
(3) the extent of advertising and publicity of the mark;
(4) the geographical extent of use of the mark (if for example, the mark has never been used in Anchorage, Alaska, the mark may not be "famous" in Alaska); and
(5) the nature and extent of use of the same or similar marks by third parties, i.e. if the mark is commonly used by various companies in different lines of business, the mark is not likely to be famous enough to bring to mind one specific business and therefore is not likely to suffer 'dilution.'"

(Quotation of factors from: Trademark Protection Broadened For "Famous" Marks, website, Stites & Harbison).

Some courts have found that niche or regional fame showed under these factors is enough to render a mark famous. Most courts seem to require a mark to be more generally well known. Whether the "360" mark has taken on either status is debatable. To the video game industry and niche market, "360" has a very specific meaning. Likewise, an argument could be made that in the current commercial market, "360" also has become famous to mean Microsoft's game console. XBox 360 was one of the hottest and most sought after items of the 2005 holiday season and continues to be in short supply for the huge demand. Still, despite both of these arguments, "360" is also a descriptive term meaning "full circle" and I do not know if Microsoft's seasonal domination of that term would be enough to appropriate it commercially from it's mathematical origins.

Even if Microsoft could show that "360" has taken on a distinctive meaning when used in the commercial context with the degrees symbol, under Moseley v. V Secret Cataloge, Inc. (2003) Microsoft would need to prove actual injury of diluted distinctiveness to their mark. Again, what made this an interesting question for me in the first place was my actual own actual confusion over clicking Yahoo's "360" link thinking I would get Xbox 360 news. If there is a network effect of this happening among the Xbox community, and Microsoft could prove such an effect through survey, tracking software or other means, then a court could an actual blurring present.

Another issue to consider would be initial interest confusion. This involves one company using another company's established mark in it's metatags or website text to divert traffic to their site. Once there, users are likely to just use the infringing competitor b/c they are offering a near identical substitute service. This analysis is not likely to influence the Microsoft case, because no one would assume that Yahoo's web service would be a substitute for Microsoft's videogame console.