Moseley v. V Secret Catalogue Inc.
The U. S. Supreme Court unanimously ruled in March that a Kentucky sex shop once called "Victor's Little Secret" did not infringe upon the trademark of lingerie retailer Victoria's Secret, reversing an earlier ruling by the Sixth Circuit. See Moseley v. V Secret Catalogue Inc., 537 U.S. 418 (2003). Victor and Cathy Moseley named their Elizabethtown, Ky., retail store "Victor's Secret" in 1998. In an advertisement for its grand opening, the store promoted "Intimate Lingerie for every woman;" "Romantic Lighting;" "Lycra Dresses;" "Pagers;" and "Adult Novelties/Gifts." An individual who saw the ad believed that the store's name used a well-known company's trademark to sell "unwholesome, tawdry merchandise" and notified Victoria's Secret of the existence of the Elizabethtown store. In response to a request from Victoria's Secret that the owners refrain from using the similar-sounding name, the Moseleys then changed the store name to "Victor's Little Secret." Victoria's Secret was not satisfied with the change, however, and filed a complaint with the federal District Court in Kentucky.
Victoria's Secret made four claims, three of which alleged infringement and unfair competition. The district court ruled in favor of the petitioners on these counts, stating that there was no proof that "Victor's Little Secret" diminished the value of the better-known trademark. But the Court argued that the Moseleys had violated the Federal Trademark Dilution Act (FTDA), a 1995 amendment to the Trademark Act of 1946 that describes which characteristics make a mark "distinctive and famous." The FTDA defines "dilution" as "the lessening of the capacity of a famous mark to identify and distinguish goods or services," and the court found that the two names were indeed similar enough to produce dilution. The court also found that the petitioners' mark had a "tarnishing effect on the Victoria's Secret mark."
The U. S. Court of Appeals (6th Cir.) affirmed the ruling in Victoria's Secret Catalogue, Inc. v. Moseley, 259 F. 3d 464 (6th Cir. 2001): "While no consumer is likely to go to the Moseleys' store expecting to find Victoria's Secret's famed Miracle Bra, consumers who hear the name ÔVictor's Little Secret' are likely automatically to think of the more famous store and link it to the Moseleys' adult-toy, gag gift, and lingerie shop. This, then, is a classic instance of dilution by tarnishing (associating the Victoria's Secret name with sex toys and lewd coffee mugs) and by blurring (linking the chain with a single, unauthorized establishment)."
The Sixth Circuit's ruling was at odds with a 1999 ruling by another federal appeals panel, Ringling Bros.-Barnum & Bailey Combined Shows, Inc. v. Utah Div. of Travel Development, 170 F. 3d 449 (4th Cir. 1999). In that decision, the Fourth Circuit stated that claims of dilution require proof of "actual harm." The Supreme Court granted certiorari to settle the disagreement.
The rationale behind Justice John Paul Stevens' majority opinion was based upon pertinent passages of the FTDA, which stated that "the owner of a famous mark" is within his rights to oppose another individual's mark if it "causes dilution of the distinctive quality" of the famous name (Stevens' emphasis). "This text unambiguously requires a showing of actual dilution, rather than a likelihood of dilution," he wrote. "The mere fact that consumers mentally associate the junior user's mark with a famous mark is not sufficient to establish actionable dilution," he continued. "Such mental association will not necessarily reduce the capacity of the famous mark to identify the goods of its owner, the statutory requirement for dilution under the FTDA."
Although Stevens maintained that a trademark owner does not have to go so far as to prove actual economic harm, a successful dilution claim must nevertheless prove that the damage is more concrete than a consumer simply making a mental link between the two names. "Blurring," Stevens noted, "is not a necessary consequence of mental association." The opinion suggested consumer surveys as one means by which actual dilution might be confirmed.
Relying on the definitions and explanations of dilution as outlined in the FTDA, the Supreme Court held that actual dilution—not just the likelihood of it—must be established. Stevens concluded, "There is a complete absence of evidence of any lessening of the capacity of the Victoria's Secret mark to identify and distinguish foods or services sold" in its stores or catalogs. Since the Court found no evidence of dilution, it remanded the case to the original court, and Victoria's Secret will have an opportunity to present additional data to support their claim.
USA TODAY's Supreme Court reporter Joan Biskupic suggested that this opinion "raises the bar for companies claiming trademark dilution," forcing companies to show "hard evidence" of dilution in the effectiveness of the trademark.
—Elizabeth Jones
Silha Research Assistant