By: Jeffrey Pietsch
Victor’s Secret, a small store in Kentucky selling adult videos and sex toys, lost another battle in a trademark dilution case brought by Victoria’s Secret. Last month, the U.S. Sixth Circuit Court of Appeals affirmed an injunction granted by the District Court that concluded that the trademark Victor’s Secret or Victor’s Little Secret disparages and reduces the positive associations of the Victoria’s Secret mark. The Sixth Circuit on review sought to determine whether Victoria’s Secret’s case met the standards of “dilution by tarnishment” as set out in the recently enacted Trademark Dilution Revision Act of 2006.
The Trademark Dilution Revision Act of 2006 is aimed at protecting a company’s property right in its trademark. Dilution is defined as “the lessening of the capacity of a famous mark to identify and distinguish goods or services, regardless of the presence or absence of competition between the parties or the likelihood of confusion, mistake or deception.” In essence, dilution forbids the use of a famous trademark by others in any manner that lessens the uniqueness of the mark. The purpose of the dilution doctrine is not to protect the consumer, but to protect the property right and goodwill that a company has developed in a mark.
Dilution can be separated into two related concepts: blurring and tarnishment. Blurring occurs when a defendant uses or modifies the plaintiff’s trademark to identify the defendant’s goods and services, raising the possibility that the plaintiff’s mark will lose its ability to serve as a unique identifier of the plaintiff’s product. In these cases, consumers are not confused as to the source of the mark. The original trademark, however, is lessened. For example, if a car company decided to sell cars under the trademark McDonald’s, the link and image between the word “McDonald’s” and fast food is weakened.
Besides blurring, dilution can be based on tarnishment. Tarnishment occurs when the trademark is used in an unsavory or unflattering manner, such as with lewd sexual products. In this case, Victoria’s Secret claimed that Victor’s Secrets trademark and sexual products degrade the famous Victoria’s Secret trademark.
This case originally began when an Army Colonel saw an ad for Victor’s Secret in a local publication. The Army Colonel was not confused to the source of the two businesses or the two marks, but, ironically, the Army Colonel was offended because the sexually oriented business was semantically related with Victoria’s Secret trademark. The Colonel notified Victoria’s Secret who filed a complaint against Victor’s Secret for trademark infringement based on dilution.
The case eventually came before the US Supreme Court. The Supreme Court reviewed the case under the Trademark Dilution Act of 1996. Based on the 1996 Act, the Supreme Court found that Victoria’s Secret must show that actual harm took place against Victoria’s Secret and that such harm lessened the capacity of the Victoria’s Secret mark to identify and distinguish goods or services sold in Victoria’s Secret stores. The Supreme Court remanded the case to the district court.
Because of this decision, Congress adopted the Trademark Dilution Revision Act of 2006 which lessened the burden that a plaintiff in a trademark dilution must exhibit to prevail. The purpose of the 2006 Act was specifically stated to lessen the “undue burden” trademark holders have with dilution claims. Under the 2006 Act, the standard for proving a dilution claim is likelihood of dilution and not actual dilution.
On remand to the District Court, no new evidence was introduced by the parties but the District Court reexamined the case based on the new 2006 Act which overruled the previous Supreme Court opinion. The District Court found that the Victor’s Secret mark, because it is sex related, disparages and reduces the selling power of the Victoria’s Secret mark. The question the Sixth Circuit had to answer on appeal is whether merely a semantic association between Victor’s Secret and Victoria’s Secret constitutes dilution by tarnishment when the junior mark, Victor’s Secret, is used to sell sexual products. The Sixth Circuit found that the 2006 Act reduces the burden of evidentiary production on the trademark holder and creates a rebuttable presumption that a new mark used to sex-related products is likely to tarnish a famous mark if there is a clear semantic association between the two. The Sixth Circuit further stated that the 2006 Act is designed to protect trademarks from any unfavorable sexual associations, and any new mark with a lewd or offensive-to-some sexual association raises a strong inference of tarnishment.
This new standard under the 2006 Act as interpreted by the Sixth Circuit is somewhat worrisome as it creates a presumption of dilution by tarnishment with sex-related products. As Professor J. Thomas McCarthy points out, “[t]he Majority essentially creates a hard edged rule that no one can use a ‘famous’ mark (or one so similar that there is an ‘association’) as a mark for any product or service that a court thinks is ‘sex-related.’” Finally, it is quite ironic that the Sixth Circuit ignored the fact that the tarnished plaintiff, Victoria’s Secret, is widely known for its “sexy” lingerie and products.