Moseley v. V Secret Catalogue, Inc.

Supreme Court of United States
537 U.S. 418 (2003)

ELI5:

Rule of Law:

The Federal Trademark Dilution Act (FTDA) requires a showing of actual dilution, which is the lessening of a famous mark's capacity to identify and distinguish goods or services, rather than a mere likelihood of dilution.

Facts:

Victor and Cathy Moseley operated a retail store in Elizabethtown, Kentucky.
Respondents, Victoria's Secret, are affiliated corporations owning the famous VICTORIA'S SECRET trademark, with over 750 stores and annual sales exceeding $1.5 billion.
In 1998, the Moseleys advertised the grand opening of their store, initially named 'VICTOR'S SECRET,' which sold items including 'Intimate Lingerie' and 'Adult Novelties/Gifts.'
An army colonel who saw the advertisement was offended by the perceived use of a reputable trademark to sell 'unwholesome' merchandise and sent a copy to Victoria's Secret.
Victoria's Secret's counsel demanded the Moseleys cease using the name, citing likely confusion and dilution.
In response to the demand letter, the Moseleys changed the name of their store to 'Victor's Little Secret.'
Victoria's Secret was not satisfied with the name change, as it still considered the name to be diluting its famous mark.

Procedural Posture:

Victoria's Secret (plaintiffs) sued Victor and Cathy Moseley (defendants) in the U.S. District Court for the Western District of Kentucky, alleging claims including trademark infringement and federal trademark dilution.
The District Court granted summary judgment to the Moseleys on the infringement claims, finding no likelihood of confusion.
The District Court granted summary judgment to Victoria's Secret on the dilution claim, finding dilution by tarnishment, and issued an injunction against the Moseleys.
The Moseleys (appellants) appealed to the U.S. Court of Appeals for the Sixth Circuit.
The Sixth Circuit affirmed the District Court's decision, finding dilution by both tarnishment and blurring and holding that proof of actual harm was not required.
The Moseleys (petitioners) petitioned for a writ of certiorari, which the U.S. Supreme Court granted to resolve a circuit split on the issue of whether the FTDA requires proof of actual harm.

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Issue:

Does the Federal Trademark Dilution Act require a plaintiff to provide objective proof of actual, consummated harm to the distinctive quality of a famous mark to obtain injunctive relief?

Opinions:

Majority - Justice Stevens

Yes, the Federal Trademark Dilution Act requires objective proof of actual dilution. The plain text of the statute, which states that a junior use must 'cause[] dilution,' unambiguously requires a showing of a completed harm, not a mere 'likelihood' of harm as found in many state statutes and other sections of federal trademark law. The statutory definition of dilution as 'the lessening of the capacity of a famous mark to identify and distinguish goods or services' further supports this conclusion. While this does not require proof of actual economic consequences like lost sales, it requires more than a mere mental association between the two marks in a consumer's mind. In this case, there was a complete absence of evidence—such as consumer surveys or other direct proof—showing any lessening of the VICTORIA'S SECRET mark's capacity. Therefore, Victoria's Secret failed to meet its evidentiary burden for an injunction under the FTDA.

Concurring - Justice Kennedy

Yes, but the evidentiary showing required can be clarified. The statutory definition of dilution as the 'lessening of the capacity' of a famous mark is key. The word 'capacity' imports both the present and potential power of the mark. Therefore, a dilution claim may be established by showing the probable consequences of the junior mark's use on the famous mark's ability to identify and distinguish goods. A famous mark holder should not be forced to wait until the damage is done and distinctiveness has already been eroded before seeking injunctive relief. On remand, respondents may still prevail if they can present sufficient evidence of blurring or tarnishment, which can be demonstrated through the probable diminishment of the mark's capacity.

Analysis:

This decision significantly raised the evidentiary standard for plaintiffs under the Federal Trademark Dilution Act by requiring proof of actual, consummated dilution. By rejecting the 'likelihood of dilution' standard used by several circuits, the Court made it more difficult for famous mark owners to protect their brands from dilution by blurring or tarnishment. The ruling created uncertainty about what type of evidence, short of costly consumer surveys, would suffice to prove a 'lessening of capacity.' In direct response to this decision, Congress passed the Trademark Dilution Revision Act of 2006 (TDRA), which explicitly overturned Moseley by amending the statute to require only a showing of a 'likelihood of dilution,' thereby restoring the lower evidentiary standard.

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