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Victor Moseley et al., dba Victor's Little Secret v. V Secret Catalogue, Inc., et al.

573 US 418 (Supreme Court, March 4, 2003)

Resolving a split in the Circuits, the Supreme Court holds that a plaintiff must submit evidence of actual dilution, rather than a likelihood of dilution, to prevail on a dilution claim brought under the Federal Trademark Dilution Act ("FTDA").  The Court accordingly reversed the decision of the Sixth Circuit, which had granted summary judgment to the owners' of the trademark "Victoria's Secret" on their federal dilution claims.  These claims arose out of defendants' operation of a store under the name "Victor's Little Secret" at which defendants sold adult novelties and lingerie.  The Sixth Circuit's decision was based on the likelihood that plaintiffs' mark would be tarnished by association with such products.  The Supreme Court reversed because the record was devoid of any evidence of actual dilution or injury to plaintiffs' mark as a result of defendants' activities.

Plaintiffs own the trademark "Victoria's Secret" which they use in connection with their operation of over 750 stores at which they sell woman's lingerie.  Plaintiffs have extensively advertised their marks, distributing over 400 million Victoria's Secret catalogues each year.

Defendants, Victor and Cathy Moseley, operate a retail store originally called "Victor's Secret" at which they sell predominantly adult novelty items.  A small percentage of their sales are of woman's lingerie.  Two stores operated by plaintiffs are a "short drive" from defendants' establishment.

After learning of defendants' conduct, plaintiffs sent a cease and desist letter, which resulted in defendants changing the name of their store to "Victor's Little Secret."  Unsatisfied with this result, plaintiffs commenced suit, asserting claims of trademark infringement and unfair competition, as well as dilution under both the FTDA and Kentucky law.

On the parties' respective summary judgment motions, the District Court dismissed plaintiffs' trademark infringement and unfair competition claims, finding that there was no likelihood that consumers either would be confused by defendants' use of the "Victor's Little Secret" mark, or believe that defendants' store was affiliated with those of plaintiffs.

The District Court went on to grant plaintiffs summary judgment on their federal trademark dilution claim, finding that "Victoria's Secret" was a famous mark that was being tarnished by its association with defendants' store and the products sold there.  These determinations were affirmed by the Sixth Circuit on the grounds that:

consumers who hear the name 'Victor's Little Secret' are likely automatically to think of the more famous store and link it to the Moseley's 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).

On appeal, the Supreme Court reversed so much of the decisions below which awarded plaintiffs summary judgment on their dilution claim, and remanded the case for further consideration.

Resolving a split in the Circuits, the Supreme Court held that to prevail on a federal dilution claim, a plaintiff must submit evidence of actual dilution, rather than a likelihood of dilution.  In reaching this result, the Court relied heavily on the language of 15 U.S.C §1125(c)(1) of the FTDA, which "provides that 'the owner of a famous mark' is entitled to injunctive relief against another person's commercial use of a mark or trade name if that use 'causes dilution of the distinctive quality' of the famous mark."  (Emphasis added).

The Court further buttressed its conclusion by contrasting the "causes dilution" language of the FTDA with the language of various state dilution statutes which "repeatedly refer to a 'likelihood' of harm, rather than completed harm."

As a result of this determination, the Court held that:

at least where the marks at issue are not identical, the mere fact that consumers mentally associate the junior user's mark with a famous mark is not sufficient to establish actionable dilution.

Such an association however, was precisely the basis for the Sixth Circuit's grant of summary judgment.  Because there was no evidence in the record that plaintiffs' mark had already been diluted as a result of defendants' conduct, the Court reversed and remanded the case for further consideration.  Notably, the only evidence in the record of harm came from an army officer who was offended by an advertisement for defendants' store.  This individual did not believe plaintiffs were responsible for the ad, however, or that defendants' store was affiliated with plaintiffs.  Quite the contrary, he was upset with defendants for taking unfair advantage of plaintiffs' mark.  This did not constitute evidence of actual dilution of the mark.

In reaching its result, the Court commented on the type of evidence that might be sufficient to demonstrate actual dilution.  Said the Court:

Noting that consumer surveys and other means of demonstrating actual dilution are expensive and often unreliable, respondents and their amici argue that evidence of an actual 'lessening of the capacity of a famous mark to identify and distinguish goods or services,' §1127, may be difficult to obtain.  It may well be, however, that direct evidence of dilution such as consumer surveys will not be necessary if actual dilution can reliably be proven through circumstantial evidence -- the obvious case is one where the junior and senior marks are identical.  Whatever difficulties of proof may be entailed, they are not an acceptable reason for dispensing with proof of an essential element of a statutory violation.

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