Moseley v. V Secret Catalogue, Inc.

PETITIONER: Moseley
RESPONDENT: V Secret Catalogue, Inc.
LOCATION: Dr. Nguyen's Office

DOCKET NO.: 01-1015
DECIDED BY: Rehnquist Court (1986-2005)
LOWER COURT: United States Court of Appeals for the Sixth Circuit

CITATION: 537 US 418 (2003)
ARGUED: Nov 12, 2002
DECIDED: Mar 04, 2003

ADVOCATES:
Deputy Solicitor General Wallace - argued the cause for the United States as amicus curiae
James R. Higgins, Jr. - Argued the cause for the petitioner
Lawrence G. Wallace - Argued the cause for the United States, as amicus curiae, supporting the petitioner
Peter Jaszi - for Public Knowledge et al. as amici curiae urging reversal
Walter E. Dellinger, III - Argued the cause for the respondents

Facts of the case

V Secret Catalogue, Inc., the affiliated corporations that own the Victoria's Secret trademarks, filed suit, alleging that the name Victor's Little Secret contributed to "the dilution of famous marks" under the Federal Trademark Dilution Act (FTDA). The law defines "dilution" as "the lessening of the capacity of a famous mark to identify and distinguish goods or services." The District Court granted V Secret summary judgment on the FTDA claim. The Court of Appeals affirmed, finding that V Secret's mark was distinctive and that the evidence established dilution even though no actual harm had been proved.

Question

Does the Federal Trademark Dilution Act require objective proof of actual injury to the economic value of a famous mark for relief?

Media for Moseley v. V Secret Catalogue, Inc.

Audio Transcription for Oral Argument - November 12, 2002 in Moseley v. V Secret Catalogue, Inc.

Audio Transcription for Opinion Announcement - March 04, 2003 in Moseley v. V Secret Catalogue, Inc.

John Paul Stevens:

The second case I have to announce is Moseley against Victoria's Secret Catalogue, No. 01-1015.

In 1995, Congress amended Cection 43 of the Trademark Act of 1946 to provide a remedy for the dilution of famous marks.

That amendment known as the Federal Trademark Dilution Act describes the factors that determine whether a mark is distinctive and famous and defines the term "dilution" as the lessening of the capacity of a famous mark to identify and distinguish goods or services.

The question we granted certiorari to decide is whether objective proof of actual injury to the economic value of a famous mark as opposed to a presumption of harm arising from a subjective likelihood of dilution standard is a requisite for relief under the statute.

Petitioners, Victor and Cathy Moseley own an operate a retail store named Victor's Little Secret in a strip mall in Elizabethtown, Kentucky.

They sell a variety of products including women's lingerie and adult novelties.

Respondents are affiliated corporations that own the Victoria's Secret trademark and operate over 750 Victoria's Secret stores, two of which are in Louisville, Kentucky, a short drive from Elizabethtown.

In 1998, they spent over $55 million advertising lingerie bearing the Victoria's Secret trademark.

They brought this action alleging the petitioner's use of the name Victor's Little Secret in a store-handling tawdry merchandise was likely to blur and erode the distinctiveness and tarnish the reputation of the Victoria's Secret trademark.

The District Court found that there was no likelihood of confusion between the marks but held that the two marks were sufficiently similar to cause dilution and enjoined petitioner from using the name Victor's Little Secret.

The Court of Appeals affirmed, expressly disagreeing with a case decided by the Fourth Circuit involving Barnum & Bailey's claim that the use by the state of Utah of the phrase, the "greatest snow on earth" on its license plates diluted the value of the phrase "the greatest show on earth."

The Fourth Circuit had held that the statute requires proof that the junior mark not only gave rise to a mental association with the senior mark but also cause some actual harm to the famous mark's economic value.

We granted certiorari to resolve the conflict.

Our examination of the text of the statute convinces us that it does require proof of actual dilution rather than just a likelihood of dilution.

In the language of the Act, there must be evidence of a "lessening of the capacity of the mark to identify and distinguish goods or services."

That does not mean that the plaintiff must prove an actual loss of profits or sales, but as the facts of the Utah case demonstrate, the mere fact that consumers mentally associate one mark with another does not necesarrily prove that there has been any reduction in the capacity of a famous mark to identify the goods of its owner.

There being no evidence in the record of this case of actual harm to Victoria's Secret mark.

The judgment of the Court of Appeals is reversed and the case is remanded for further proceedings.

Justice Kennedy has filed a concurring opinion.