Last month, we visited the concept of famous
trademarks, discovering that famous marks are entitled
to broader protection than not-so-famous marks.
This month, we explore trademark stripping... in
a case involving lingerie and sex toys.
Victor and Cathy Moseley decided to open their own
business in Elizabethtown, Kentucky back in 1998.
The store sells men's and women's lingerie, adult
videos, sex toys and things referred to as "adult
novelties". Elizabethtown is located a discrete
45 miles south of Louisville, at the crossroads
of I-65 and the Western Kentucky Parkway, not far
from Fort Knox.
When the Moseley's planned their store, they decided
to name it after themselves, only they didn't like
"Moseley's". They opted instead to use
one of their first names... guess which one? But,
"Victor's" lacked that certain pizzazz,
so they christened the store "Victor's Secret".
It took only a couple of weeks for Victoria's Secret
to discover the new store and object. When confronted,
the Moseley's claimed to have never heard of Victoria's
Secret, despite the two Victoria's Secret stores
just up the road in Louisville, the annual mailings
of 39,000 Victoria's Secret catalogs to Elizabethtown
residents and the well-known fact that each Victoria's
Secret catalog changes hands at least half a dozen
times. It makes one wonder about their business
plan.
After being caught, the storeowners made a concession,
changing the name of the store to "Victor's
Little Secret". "Little" was apparently
added to the existing signage because it was above
"Victor's" and "Secret" and
was in smaller letters.
Feeling unfulfilled, Victoria's Secret sued in federal
court in Louisville for trademark infringement.
Louisville undoubtedly receives many more Victoria
Secret catalogs than Elizabethtown. In fact, with
the entire country deluged with 400 million catalogs
a year, American teenage boys no longer feel the
need to gawk at the revealing tribal dress photos
in National Geographic.
Victoria's Secret thought it had a slam dunk case
of trademark infringement. After all, the marks
were substantially similar, the goods were the same
(lingerie), the Moseley's intentionally copied the
mark and both companies sell through similar channels
of trade (retail stores). Intentional copying alone
wins the day in most infringement cases.
The Moseley's put up a stiff fight, convincing the
judge that there was no infringement. The court
found that lingerie consumers were too sophisticated
to be fooled, an obvious reference to the great
care men take when shopping for lingerie. The court
also found a big difference in the quality of the
merchandise. In other words, Victoria's Secret sells
high class underwear, while Victor's Little Secret
sells the low class stuff. More critical, however,
was that Victoria's Secret apparently had difficulty
rounding up witnesses who would: a) testify in federal
court they bought these items, and b) that they
were actually confused by the two trademarks. The
lack of any actual confusion proved the unraveling
of Victoria's Secret infringement case, an atypical
outcome because in trademark cases, only a likelihood,
not actual, confusion need be proved. It's like
criminal law where attempted theft is prosecutable.
Ultimately, the court gave some respect to Victoria's
Secret, finding the mark diluted. Only famous marks
are entitled to protection from dilution, akin to
a stripping away of the satiny distinctiveness of
the mark. Distinctiveness is the quality that makes
the mark recognizable by customers. Think of the
wavy Coca-Cola name on a can, the double R's on
a Rolls, or Budweiser on a tavern pull handle. Each
of these marks clearly distinguish the goods from
other brands. Allowing someone to use Coca-Cola
on, say furniture, would water down the uniqueness
of the mark.
What makes the Victoria's Secret case stimulating,
in an intellectual sort of way, is not the merchandise
in question, but the fact that the Supreme Court
is taking a peak. After losing twice below, the
Moseleys were granted one last chance. The question
being considered is the amount of proof required
for dilution. Victoria's Secret urges a standard
that allows circumstantial evidence, while naturally,
the Moseley's urge a tougher standard requiring
direct evidence. As support for their position,
the Moseley's rely on a Utah case where Ringling
Brothers unsuccessfully sued Utah for promoting
its ski slopes with "The Greatest Snow on Earth".
Having won the infringement claim on burden of proof,
the Moseleys wish to stretch, with Lycra-like elasticity,
Victoria's Secret proof hurdle even further on the
dilution claim. Maybe this was their business plan
after all.
Arguments in the case were last month in the relatively
small intimate courtroom draped with red velvet
curtains, with a decision coming before July. The
justices will have to work out for themselves whether
sales of sex toys can harm sales of lingerie. Originally Published in the Fort Worth Businss Press |
