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Moseley Revisited: What the Victoria's Secret Case Means
The Supreme Court's recent Federal Trademark Dilution Act (FTDA) opinion, Moseley et al. dba Victor's Little Secret v. V Secret Catalogue, Inc. et al., has a number of practical consequences. It settled an issue that had split the Circuits for years: whether actual dilution or a “likelihood of dilution” must be shown to establish an FTDA violation. Dilution law seeks to prevent the diminution or whittling away of a famous trademark's value through another's commercial use of the same or a similar mark. That somewhat abstract harm suggests the less concrete “likelihood of dilution” standard would more logically apply. (The FTDA grants relief only to famous trademark owners, and lists eight factors used to determine whether a mark is famous: the mark's degree of inherent or acquired distinctiveness, the duration and extent of the mark's use on the goods or services with which the mark is used, the duration and extent of advertising and publicity of the mark; the geographical extent of the trading area in which the mark is used; the channels of trade for the goods or services with which the mark is used; the degree of recognition of the mark in the trading areas and channels of trade used by the marks' owner and the defendant; the nature and extent of use for the same or similar marks by third parties; and whether the marks is federally registered. The following marks are among those that courts have found to be famous: AOL, BARBIE, BUDWEISER, CARTIER, DON'T LEVE HOME WITHOUT US, ETCH-A-SKETCH, TYLENOL, PORSCHE, and TOYS R US.)
Actual Dilution Required
In Moseley, the Court unanimously held that proof of actual dilution must be shown to establish an FTDA violation, because the statute prohibits trademark use that “causes dilution.” It contrasted that wording with state anti-dilution statutes and parts of the federal Lanham Act, which refer to a “likelihood” of harm. The consequences of dilution such as lost sales, need not be shown. Direct evidence, such as consumer surveys, is also unnecessary where dilution can be reliably proved through circumstantial evidence.
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