Victor/Victoria: What’s In a Name?

"It's been hard for me to fathom that it's gone this far, because I could not see a link. I've had a hard time understanding the link of Victor and Victoria being similar enough that it would cause any type of action." Victor Moseley.

Victor and Cathy Moseley owned and operated a retail store named “Victor’s Secret” in Elizabethtown, Kentucky just down the road from Fort Knox. In 1998, the Moseley’s placed an ad for their store in a weekly publication distributed to residents of the military installation there. The ad featured “Intimate Lingerie”; “Lycra Dresses”; “Pagers”; and “Adult Novelties”. An army colonel, who saw the ad and was offended by what he perceived as an attempt to use a reputable company’s trademark to promote the sale of “unwholesome, tawdry merchandise,” sent a copy of the ad to the retail lingerie giant Victoria’s Secret.

Victoria’s Secret wrote the Moseley’s stating that “Victor’s Secret” for a store selling lingerie was likely to cause confusion with the well known VICTORIA’S SECRET mark and in addition, was likely to “dilute the distinctiveness” of the famous mark. In response, the Moseley’s changed the name of their store to “Victor’s Little Secret.” The change did not satisfy the retail giant; it promptly filed an action in Federal District Court.

Among four separate claims the complaint alleged that the Moseley’s use of the name “Victor’s Little Secret” was a violation of the Federal Trademark Dilution Act (“FTDA”) as it diluted Victoria Secret’s mark. The FTDA 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. Victoria’s Secret argued that proof of actual harm was not necessary. The likelihood of such harm should be sufficient to warrant an injunction.

The FTDA does not define what a famous mark is. Rather, it leaves to the courts to determine what constitutes “famousness” by examining, among other things, the degree of inherent or acquired distinctiveness of the mark; the duration and extent of its use and its advertising and publicity.

The Act does, however, define "dilution" as “the lessening of the capacity of a famous mark to identify and distinguish goods or services,” regardless of the presence or absence of competition between the owner of the famous mark and other parties.

By any standard, the VICTORIA SECRET mark is famous. Indeed, the Moseleys did not challenge Victoria Secret’s claim that its mark was famous. Instead, they argued that their use had not caused any dilution of the famous mark. The Supreme Court agreed, holding that the FTDA required Victoria's Secret to show "actual dilution," not the mere likelihood of harm. The Court also said that mere "mental association" in the mind of consumers between two marks did not amount to dilution. Consumers must be shown to have formed a "different impression" of the famous trademark or a lessened ability to distinguish products that the mark is intended to identify.

The decision leaves many unanswered questions in part because it offered something for both sides. On the one hand, the famous trademark owner has to show some form of actual, current harm as opposed to purely speculative anticipation of future damage. On the other hand, the Court said that that harm that must be shown need not be proven by a showing of actual economic damage.

The FTDA has been criticized by consumer groups and First Amendment advocates as expanding the economic power of trademark holders at the expense of small businesses and free speech. Trademark owners had heavily lobbied Congress for its passage. The Victoria Secret case was eagerly watched by both sides with some predicting a “slam dunk” for the large retailer. Instead, the decision was 9-0 for the little guy and 50/50 for everyone else.

For a complete copy of the decision go to www.supremecourtus.gov/opinions/02pdf/01-1015.pdf. If you would like more information about Kohrman Jackson & Krantz’s technology and e-business practice, please contact David R. Posteraro at 216-736-7218 or drp@kjk.com.