Victoria’s Secret Not Covered, Court Says

Victoria’s Secret, the glossy seller of women’s lingerie, failed to prove that its brand name was hurt by a “tawdry” strip-mall store that sold adult sex toys under the name Victor’s Little Secret, the Supreme Court said Tuesday, dealing a setback to the owners of world-famous brands.

In its first test of a federal law designed to protect well-known brands from copycats and imitators, the high court required the brand-name firms to show that they suffered real harm from these upstarts, not just an unpleasant association.

“The mere fact that consumers mentally associate the junior user’s mark with a famous mark is not sufficient,” said Justice John Paul Stevens in a 9-0 opinion.

To win a claim and knock out an upstart competitor, the famous firm must show that the Brand X competitor either exactly copied its name or caused consumers to think less of the famous brand, the justices said.

They did not say how brand name firms could do that, although they suggested that a survey of consumers might supply the evidence.

The ruling was not a total loss for the brand names, however. The justices said they do not have to prove that they lost sales because of the upstart copycat.

Nonetheless, Tuesday’s ruling weakens a new law won by the famous firms eight years ago.

“This is a significant decision. It makes it very difficult for the [brand-name] companies to win these cases,” said David S. Welkowitz, an expert in trademark law at Whittier Law School.

The federal Trademark Dilution Act of 1995 was intended to strengthen the legal rights of brand names. In a competitive global economy, a famous brand and the image that goes with it can be worth untold millions of dollars, and trademark holders were eager to protect their brands from those who would either copy them or tarnish their distinct image.

The original Trademark Act in 1946 prohibited others from using a brand name, logo or an image in a way that would confuse consumers. For example, an auto maker could not produce a new line of cars called “Mercedes.” The Trademark Dilution Act went further and prohibited the use of a similar name or logo if it “diluted” or “lessened the capacity of a famous mark to identify” a distinctive product.

But so far, the famous brands have struggled to win a claim of dilution.

Ringling Bros.’ circus, which claims to offer the “Greatest Show on Earth,” tried to prevent the state of Utah from claiming to have the “Greatest Snow on Earth.” The circus owners lost because the courts were not persuaded that the snow promoters hurt the show promoters.

Often, upstarts mocked the famous -- and won. For example, the makers of Jordache jeans were unable to stop another retailer from selling large-size jeans for women labeled “Lardache.”

The Supreme Court had not waded into the controversy until the case of Victor’s Little Secret vs. Victoria’s Secret arrived last year.

When Victor Moseley was laid off from a retail job, he and his wife decided to open their own store that would offer “everything for romantic encounters.” They sold lingerie, jewelry, incense and leather outfits as well as adult novelties and sex toys.

“We kept it a secret from family and friends,” Moseley said. They called it “Victor’s Secret.”

But their secret got out -- to the owners of Victoria’s Secret, a retail giant that operates more than 750 stores and claims to mail out 400 million catalogs each year.

Moseley said Tuesday that he was surprised to be sued by the famous firm.

“I can’t imagine how this 1,400-square-foot store in Elizabethtown, Ky., would cause any harm to this giant company,” he said. “Besides, Victor and Victoria are not all that similar. One is a male name. One is female.”

He also changed the name of his store slightly to “Victor’s Little Secret.”

Nonetheless, a federal judge in Louisville and the U.S. Court of Appeals in Cincinnati ruled that the Moseleys had violated the federal law and could no longer use Victor’s name on their store.

“This is a classic instance of dilution by tarnishing [the famous brand] and associating the Victoria’s Secret name with sex toys and lewd coffee mugs,” the appeals court said.

But the Supreme Court took up the Moseleys’ appeal and reversed the lower courts.

“There is a complete absence of evidence of any lessening of the capacity of the VICTORIA’S SECRET mark to identify and distinguish goods or services sold in Victoria’s Secret stores or advertised in its catalogs,” Stevens said.

The case was sent back to a trial judge to decide whether there was evidence to show actual harm to the giant retailer.

Limited Brands, the parent of Victoria’s Secret, said in a statement that it was pleased that the company did not need to show a loss in sales to win such a case.

“We will continue to vigorously protect and defend the Victoria’s Secret brand, and the court’s decision allows us to do that,” the company said.