In Deere & Co. v. MTD Products, Inc., the Court of Appeals for the Second Circuit held that the defendant's use of an altered version of the plaintiff's famous "leaping deer" logo in comparative television advertising constituted trademark dilution under the New York anti-dilution statute.

Plaintiff Deere & Co. is a leading manufacturer of agricultural equipment, including lawn tractors, and has for over a century used a stationary, two-dimensional Leaping Deer Logo as a trademark for its products. When defendant MTD Products, Inc. aired a comparative television commercial for its lawn tractors which depicted an animated, proportionally smaller deer running in apparent fear from the defendant's tractor, plaintiff brought suit for trademark infringement and dilution. In granting the plaintiff's motion for a preliminary injunction on the ground of dilution, the district court found that MTD's use of an animated, fearful looking deer "blurred" the strong product identification of Deere's famous Leaping Deer Logo.

After a thorough analysis of the dilution doctrine, the Second Circuit noted that the conduct at issue--use of a humorous parody of a competitor's mark in comparative advertising--did not fit neatly into either established category of dilution, i.e., "blurring" of a mark's product identification or "tarnishment" of a mark's affirmative associations. However, the Court pointed out that "the blurring/tarnishment dichotomy does not necessarily represent the full range of uses that can dilute a mark under New York law." Thus, while ordinary comparative advertising, i.e., where a competitor's mark is not altered, or traditional non-commercial parody, are generally not actionable, MTD's use of an animated parody of Deere's famous logo solely for the commercial purpose of promoting MTD's competing product constituted dilution under New York law.

In affirming the district court's grant of injunctive relief, the appellate panel noted that MTD's use of the animated, fearful looking deer could cause consumers to "attribute unfavorable characteristics" to the plaintiff's famous Leaping Deer Logo. This conclusion suggests that, despite its dicta to the contrary, the court did, in fact, believe that MTD's objectionable commercial "tarnished" the affirmative associations of the plaintiff's Leaping Deer Logo. However, given the novelty of the issues raised in the case, the appellate court declined to extend the scope of the district court's injunction beyond New York State.