## Facts

- Mead Data Central, Inc. provided computerized legal research services under the registered mark LEXIS, used since 1972 and well known among attorneys.
- Toyota Motor Sales, U.S.A., Inc. and Toyota Motor Corp. selected LEXUS as the name for a new luxury automobile line and the division producing it.
- Mead sued in federal court asserting (1) false designation of origin under Lanham Act § 43(a) and (2) dilution under New York General Business Law § 368-d.
- The parties consolidated the preliminary-injunction hearing with a bench trial on the merits under Rule 65(a)(2).
- The district court found no likelihood of confusion and dismissed the Lanham Act claim, but enjoined Toyota under § 368-d on the ground that LEXUS would likely dilute LEXIS.
- Toyota appealed only the state-law dilution injunction.

## Issues

1. Whether Toyota’s use of LEXUS for luxury automobiles was likely to dilute the distinctive quality of Mead’s LEXIS mark under New York General Business Law § 368-d, warranting injunctive relief.

## Decision

- The Second Circuit reversed the judgment and vacated the injunction.
- The court held Mead did not establish a likelihood of dilution under § 368-d.
- The court concluded LEXIS and LEXUS were not “very” or “substantially” similar as required for a dilution claim.
- The court found the record did not show Toyota’s use would “whittle away” the selling power or distinctiveness of LEXIS, particularly given the marks’ different marketplace contexts and audiences.

## Legal Principles

- New York General Business Law § 368-d permits injunctive relief for likely dilution of a mark’s distinctive quality even without competition or likelihood of confusion, but requires (1) a strong mark and (2) a likelihood of dilution.
- Dilution protection is not triggered by mere dissimilarity of products; the plaintiff must show a realistic likelihood that the mark’s distinctiveness will be diminished through use on dissimilar goods.
- For dilution, the marks must be “very” or “substantially” similar; courts assess similarity in sight, sound, and commercial context, not phonetics alone.
- A mark’s strength in a specialized professional market may support distinctiveness in that niche, but limited recognition by the general public can weigh against a finding that a defendant’s use will dilute the mark’s distinctive quality in a broader sense.
- Predatory intent is relevant but not required; the absence of bad faith, including reliance on legal advice that no conflict exists, weighs against granting dilution relief.
- Although confusion is not an element of § 368-d, traditional likelihood-of-confusion considerations may be used by analogy to evaluate similarity, market proximity, and the practical risk of diminished distinctiveness.

## Conclusion

The Second Circuit vacated the injunction because Mead failed to prove that Toyota’s use of LEXUS was substantially similar to LEXIS or likely to dilute LEXIS’s distinctive quality under New York’s antidilution statute.


Mead Data Cent., Inc. v. Toyota Motor Sales, U.S.A., Inc., 875 F.2d 1026 (2d Cir. 1989)