Thursday, May 20, 2010

6th Circuit Gives Victoria's Secret a Dilution Win Against Victor's Little Secret in Round 2

In a fractured decision, the Sixth Circuit yesterday revisited the trademark dilution dispute between Victoria’s Secret and the Kentucky “adult” store, Victor’s Little Secret. V Secret Catalogue, Inc. v. Victor’s Secret Stores, Inc.¸, No. 08-5793 (6th Cir. May 19, 2010). The case had previously risen all the way up to the Supreme Court, which in 2003 held that Victoria’s Secret had failed to prove actual dilution under the old dilution law and remanded the case. In response, Congress quickly expanded the dilution law to cover “likelihood of dilution.”

In essence, the Sixth Circuit interpreted the revised law to create a rule that puts a finger on the scales of justice in favor of a mark owner when the junior user uses a mark that (1) creates an association with the senior user’s mark and (2) is used in connection with sex-related products. One judge in the majority called it a “rebuttable presumption” or a “res ipsa loquitur-like effect.” (Opinion of Merritt, J.) The other judge in the majority called it an “inference.” (Opinion of Gibbons, J.) The dissenting judge (Moore, J.) called it “wrong.”

The dissent noted that the only evidence in the record was that one army officer at a nearby base was offended by the junior user’s mark. The dissent explained that evidence that one person is offended by the junior user’s mark or commercial sex-related activities is not the same thing as evidence that the senior user’s reputation has been tainted. The dissenter noted that this paucity of likely reputational harm is especially significant where the evidence showed that the senior user (Victoria’s Secret) uses its mark in ways that relate to sex as well.

I am inclined to agree with the dissent—based on the facts sets forth in the opinion—on the failure of the plaintiff’s evidentiary showing here. I agree Congress intended to liberalize the dilution law by expanding it to be triggered by likely dilution. But I don’t think Congress intended that expansion to mean that there should be a presumption or inference in the absence of any evidence of likely harm.

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