V Secret Catalogue, Inc. v. Moseley

605 F.3d 382 (6th Cir. 2010)

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Nature of the Case

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Facts

P is an international lingerie company that uses the trade name designation 'Victoria's Secret.' D owns a store that sells assorted merchandise, including 'sex toys' and other sexually oriented products. It is called 'Victor's Little Secret' or 'Victor's Secret.' It is located in Elizabethtown, Kentucky. P sued D for trademark dilution by tarnishment. D changed its name to 'Cathy's Little Secret.' The Court concluded that even though the two parties do not compete in the same market, the 'Victor's Little Secret' mark -- because it is sex-related -- disparages and tends to reduce the positive associations and the 'selling power' of the 'Victoria's Secret' mark. Ds presented no evidence that their original name was unlikely to tarnish P. D claimed it tried to maintain a “sexy and playful” image that steered clear of things “sexually explicit or graphic.” The court enjoined D and D appealed. The appeals court affirmed. The Supreme Court reversed. The Supreme Court explained that there was no likelihood of confusion between the two businesses or the two marks, but the Army Colonel was offended because the sexually-oriented business was semantically associating itself with 'Victoria's Secret.' It held that “Actual harm' rather than merely the 'likelihood of tarnishment' is necessary. Consumer surveys and other means of demonstrating actual dilution are expensive and often unreliable, It may well be that direct evidence of dilution such as consumer surveys will not be necessary if actual dilution can reliably be proved 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. The evidence in the present record is not sufficient to support the summary judgment on the dilution count. The judgment is therefore reversed, and the case is remanded for further proceedings consistent with this opinion. The Court held that 'actual harm' rather than merely a 'likelihood' of harm must be shown by Victoria's Secret in order to prevail and that this means that Victoria's Secret carries the burden of proving an actual '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.' Congress then passed a new act that was expressly intended to overrule the Supreme Court interpretation of the old Act in this very same case. The Trademark Dilution Revision Act of 2006 (TDRA) made trademark dilution by tarnishment actionable if the trademark holder could show that the defendant’s use of the mark was likely to cause dilution of the trademark holder’s reputation. On remand to the District Court, no new evidence was introduced, and the District Court reconsidered the case based on the same evidence but used the new language in the new Act. It ruled for P and D appealed.