Victoria's Secret v. Victor's Little Secret: The U.S. Supreme Court Rules Actual Dilution is Required Under the Federal Trademark Dilution Act
January, 2003
On March 4, 2003, the United States Supreme Court unanimously ruled that the Federal Trademark Dilution Act (“FTDA”) requires an owner of a famous trademark to show “actual dilution” and not the mere “likelihood of dilution” to obtain relief under the statute. Moseley v. V Secret Catalogue, Inc., 123 S. Ct. 1115 (2003).
The Court’s decision resolves a split within the Federal Circuits as to the correct standard of proof under the FTDA. The Fourth and Fifth Circuits had adopted the strict standard that a plaintiff must suffer “actual and present injury” due to the dilution. The Second and Seventh Circuits adopted the lesser “likelihood of injury” standard.
Background: Trademark Dilution
Trademark dilution is a variety of trademark infringement that protects famous trademarks from situations where there is not a likelihood of confusion, but where the defendant’s use of the famous mark either tarnishes the image of the mark or blurs the distinctiveness of the mark. Classic examples of trademark dilution include, KODAK pianos, DUPONT shoes and BUICK aspirin.
In 1995, Congress passed the FTDA which provides that the owner of a famous mark shall be entitled to an injunction against another person’s commercial use of a mark or trade name, if such use begins after the mark has become famous and causes dilution of the distinctive quality of the mark. 15 U.S.C. §1125(c).
Facts
Plaintiff, V Secret Catalogue, is the owner of the famous trademark VICTORIA’S SECRET. It sells women’s intimate apparel through a thriving catalog business and in over 750 stores. Defendants, Victor and Cathy Moseley, own a retail store in a strip-mall in Elizabethtown, Kentucky called VICTOR’S LITTLE SECRET. They sell lingerie, adult videos and adult novelties.
V Secret alleged trademark infringement and dilution against the Moseleys. The district court granted summary judgment in favor of the Moseleys on the infringement claim, but ruled in favor of V Secret on the dilution claim, finding that plaintiff had presented sufficient evidence to support its claim that defendants’ use of the name VICTOR’S LITTLE SECRET was likely to cause blurring or tarnishment of the VICTORIA’S SECRET mark. On appeal, the Sixth Circuit adopted the Second Circuit’s less demanding “likelihood of dilution” standard, and affirmed the district court’s grant of summary judgment in favor of V Secret.
Analysis
The Supreme Court, based on a straightforward statutory construction analysis, ruled that actual dilution is required under the FTDA. It focused on the fact that the FTDA provides relief against another mark that “causes dilution” in contrast to other statutory sections that speak of only a “likelihood of confusion.” The Court explained that the mere fact that consumers mentally associate defendants’ name with that of plaintiff’s famous mark does not in and of itself provide sufficient evidence to establish actionable dilution. The plaintiff must show that the mark has suffered an actual reduction in the capacity of the famous mark.
Applying its standard, the Court reversed and remanded the summary judgment in favor of V Secret stating that “there is a complete lack of evidence of any lessening of the capacity of the VICTORIA’S SECRET mark to identify and distinguish goods or services sold in Victoria’s Secret stores or advertised in its catalogs.”
Unfortunately, the Court did not provide much guidance on what constitutes actual dilution. It did, however, suggest that consumer surveys or expert opinions may suffice. Further, circumstantial evidence, such as when the junior and senior marks are identical, may also satisfy the statutory requirement.
Learning Point:
While clarifying the FTDA’s statutory standard, this opinion fails to set a clear threshold for what is required to prove actual dilution.
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