The Enquirer reports that the Sixth Circuit has ruled against the proprietor of a sex shop formerly named Victor’s Secret in a trademark tarnishment case brought by lingerie boutique Victoria’s Secret. The court found that the similarity of the names was likely to lead to “unfavorable sexual associations” for Victoria’s Secret. I’m not joking.
The case has an interesting procedural history. A man saw an ad for Victor’s Secret in a local paper, “was offended by what he perceived to be an attempt to use a reputable company’s trademark to promote the sale of unwholesome, tawdry merchandise,” and sent a copy of the ad to Victoria’s Secret. Litigation ensued, and the Supreme Court in 2006 determined that the lower courts had applied the incorrect standard of review in addressing whether Victoria’s Secret had been harmed. (Specifically, the Court held that only actual dilution by tarnishment was actionable under the Federal Trademark Dilution Act of 1995.)
While the case was still pending, Congress updated the trademark law to overrule the Supreme Court, adding a new claim under which a trademark owner could recover for likelihood of dilution by tarnishment. Under this new cause of action, the owner of a trademark can obtain an injunction or damages if it is likely that a new mark will harm the reputation of a senior mark, and the two marks are associated with each other due to their similarity.
The case was remanded to the district court, which held that it was indeed likely that people would associate Victor’s Secret with Victoria’s Secret due to their similarity, and that Victoria’s Secret’s reputation would be harmed as a result. The grounds for the ruling was that the association with Victor’s Secret was likely to cross that fine line between “sexy and playful” (as Victoria’s Secret described itself) and “sexually explicit” (as Victor’s Secret concededly was).
Yesterday the court of appeals affirmed, holding that “the [updated trademark] Act creates 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,” and that Victor’s Secret failed to rebut that presumption in this case. One judge concurred in the judgment but disagreed that the updated trademark act created a presumption — instead, he would call it simply an “inference.” The third judge dissented, observing that the updated act contains no language at all regarding any presumptions, and would have held that the single incident of association is not sufficient to create a cause of action.
Aside from the obvious problem of the Sixth Circuit creating a presumption where a statute contains none (actually, query whether it is indeed a presumption or an inference; how will district courts interpret this holding?), isn’t this a difficult decision to justify based simply on common sense? If Victoria’s Secret can obtain an injunction because of an association with sex, where will it end? Could a burger joint named McDuffy’s be enjoined if its food was too fatty, or its service too slow? This decision seems to create a slippery slope for courts with respect to the rights of junior mark holders.
On the other hand, perhaps this is a lesson in lawyering. Both the district court and the court of appeals based their decisions in part on the fact that Victor’s Secret failed to present any evidence that the two marks were not associated, or that Victoria’s Secret would not be harmed. Maybe the take-away in this case is simply that even when a claim appears absurd on its face, it still must be defended aggressively.
The Sixth Circuit decision is here [PDF]; the district court’s decision can be found here.
Victor’s Secret, for what it’s worth, plans to seek an en banc rehearing or to petition the Supreme Court for certiorari.
This post was written by Jeffrey M. Nye.
