Reference no: EM131198439

Victoria’s Secret is a successful worldwide retailer of women’s lingerie, clothing, and beauty products that owns the famous trademark “Victoria’s Secret.” A small store in Elizabethtown, Kentucky, owned and operated by Victor and Cathy Moseley, used the business names “Victor’s Secret” and “Victor’s Little Secret.” The store sold adult videos, novelties, sex toys, and racy lingerie. Victoria’s Secret sued the Moseleys, alleging a violation of the Federal Trademark Dilution Act of 1995. The case eventually was decided by the U.S. Supreme Court in favour of the Moseleys, when the Court found that there was no showing of actual dilution by the junior marks, as required by the statute. Congress overturned the Supreme Court’s decision by enacting the Trademark Dilution Revision Act of 2006, which requires the easier showing of a likelihood of dilution by the senior mark. On remand, the U.S. District Court applied the new likelihood of confusion test, found a presumption of tarnishment of the Victoria’s Secret mark that the Moseleys failed to rebut, and held against the Moseleys. The Moseleys appealed to the U.S. Court of Appeals.

Issue

Is there tarnishment of the Victoria’s Secret senior mark by the Moseleys’ use of the junior marks Victor’s Secret and Victor’s Little Secret?

Language of the Court

The phrase “likely to cause dilution” used in the new statute significantly changes the meaning of the law from “causes actual harm” under the pre-existing law. The burden of proof problem should now be interpreted to create a kind of rebuttable presumption, or at least a very strong inference that a new mark used to sell sex-related products is likely to tarnish a famous mark if there is a clear semantic association between the two. In the present case, the Moseleys have had two opportunities in the District Court to offer evidence that there is no real probability of tarnishment and have not done so. Without evidence to the contrary or a persuasive defensive theory that rebuts the presumption, the defendants have given us no basis to reverse the judgment of the District Court.

Decision

The U.S. Court of Appeals affirmed the U.S. District Court’s judgment in favor of Victoria’s Secret.

1. Do you think that Congress often uses its “veto power” over the U.S. Supreme Court’s interpretation of a federal statute by enacting another statute to change the result of a Supreme Court’s decision?

2. Do you think the Moseleys were trading off of Victoria’s Secret famous name? Do you think that the Moseleys had a legitimate claim to their business names because the husband’s name was Victor?

3. Did the change in the Trademark Dilution Revision Act of 2006 favor famous trademark holders?