Oral argument today in the long-awaited trademark dispute between lingerie leviathan Victoria's Secret and a Kentucky smut shop named Victor's Little Secret is sort of like the Victoria's Secret faux-fly boyshort. It must have seemed like a good idea to someone at some point, but when we're all sitting here looking at it, nobody can recall why.
The issue involves a very special type of trademark protection— known as "trademark dilution"—codified in a 1995 federal statute, the Federal Trademark Dilution Act. The FTDA allows the owner of a particularly famous trademark to enjoin others from copying it or playing off it when such copying "dilutes" the distinctive quality of the trademark. "Dilution" is one of the words we'll fight about a good deal today, but the act defines it as "lessening of the capacity of a famous mark to identify and distinguish goods or services."
In 1998, Victor and Cathy Moseley opened a shop in Elizabethtown, Ky. Their inventory includes underwear, lingerie, sex toys, videos, and adult novelties. They had toyed with the name "Adult Toys-R-Us" before settling on "Victor's Secret." The Moseleys allege they'd never heard of the lingerie chain—founded in 1977 in California, whose sales amounted to $1.5 billion in 1998, the year the Moseleys managed never to have heard of them—until this case was launched. They chose the name because they wanted to keep the business a "secret" from Victor's former employer. (Was he a monk?)
For some reason, a judge advocate general at an Army Center in Fort Knox was so enraged by a Victor's Secret ad that he fired off a letter of complaint to Victoria's Secret, claiming he was "personally offended" by the "unwholesome tawdry merchandise" being sold in violation of its trademark. Evidently, Victoria purists reach up to the highest echelons of the nation's military. Colin Powell was unavailable for comment.
Victoria's Secret sent a cease-and-desist letter to Victor, who cleverly changed the store's name to "Victor's Little Secret." Victoria's Secret, still unsatisfied, sued the shop for violations of the Lanham Act—the federal trademark statute—and lost these trademark claims because there was no evidence of consumer "confusion" between the two businesses. Victoria's Secret prevailed, however, on a new, fancy-style dilution claim under FTDA. While the standard for what constitutes "dilution" is very much in dispute—with circuit courts split on both the definition and test—the district court found that Victor had indeed diluted Victoria's trademark, and the 6th Circuit Court of Appeals affirmed that decision.
The smut store, now called Cathy's Little Secret, appealed this decision to the Supreme Court, who are here today to determine whether a company claiming "dilution" of its trademark needs to show actual or economic injury or just some squishy "likelihood of dilution" to prevail on a trademark dilution claim.
James R. Higgins, from Louisville, Ky., argues on behalf of the Moseleys. He opens with the suggestion that this case concerns something legally remote, which prompts Justice Anthony Kennedy to ask whether he means Tennessee is remote. Higgins replies that the case is out of Kentucky and then cites a 2nd Circuit case in which Nabisco was unfairly enjoined from ever, ever making small orange cheese crackers shaped like goldfish, because Pepperidge Farm claimed that its famous Goldfish were being diluted. Poor Nabisco.
Justice Stephen Breyer interrupts to ask whether a necessary element of dilution is "tarnishment" of reputation, giving the example of "Bugweiser" bug spray, which might not lead Budweiser consumers to believe that their beer has Deet in it, but which might nevertheless lead them to think, according to Breyer: "Budweiser. Yuck."
Higgins says that there is no dilution unless consumers are actually confused. Call this the Miracle Bra argument: Are they real or not real?
Breyer points out that no "tiny, totally separate product with the same name will ever hurt the selling power of a big famous name." There could never be a successful dilution claim under Higgins' test. Here, he invokes something called the "Kodak Monkey Ranch" and confuses Higgins (and me and the monkeys) even further. In response to an inquiry from Justice Sandra Day O'Connor, Higgins changes his tune and claims consumer confusion is not an important element of trademark dilution. He adds that showing that the famous company suffered "actual economic harm" is necessary to proving dilution, however.
Higgins next invokes what I'd call his convertible bra argument. No one confuses Delta Airlines with Delta faucets. And no one thinks Apple Records makes Apple Computers. Ford cars with the modeling agency? Why can't a name belong to both?
Justice Antonin Scalia starts to ramp up into Big Bully mode. "Well, what do you want the plaintiff to show?" he asks. "That consumer perception causes dilution," responds Higgins. Is one confused consumer enough? asks Scalia. No, says Higgins.
"How many are enough?" asks Chief Justice William Rehnquist. Higgins says that the only way to gauge consumer confusion is through consumer surveys asking, "Do you believe this is a famous mark? Do you believe they had to get permission to use it?"
"Sounds like a lawyer's dream," quips Justice Anthony Kennedy.
Breyer adds that there is a fairly serious speech issue underlying this case; that this kind of restriction severely limits advertising, which is a big a part of, he says, children's daily communication. "But don't let me put words in your mouth," finishes Breyer. So, Higgins offers his full-coverage bra argument, noting that of course there are broad First Amendment concerns here as well (he just forgot to make them).
Rehnquist wonders why it isn't in the public interest to prohibit someone "from copying someone else's name" adding, "Your client doesn't come off well in this case." The chief's disdain is, well, naked.
Deputy Solicitor General Lawrence Wallace also argues on the Moseleys' side. Before he begins, Rehnquist recognizes that this is Wallace's 157th argument before the high court, commends him on 34 years of service in the solicitor general's office, congratulates him on an upcoming retirement, then warns, "That doesn't mean we're going to rule in your favor."
Wallace can barely get a word in edgewise this morning, but his argument essentially lifts and separates Higgins': The mere association between two similar names is not enough to show trademark dilution. The plaintiff needs to show that they have actually been harmed by the copycat.
Victoria's Secret is represented by Walter Dellinger, one of the court's Harlem Globetrotters. Dellinger politely offers a control-top argument, reminding the court that instead of debating the advisability of trademark dilution as though they were a House committee, they might recall that they are supposed to be construing an existing statute. He adds a thong argument—so called because it seems like a good idea at the time but will hurt like hell later. His argument is that dilution only protects a very narrow, very limited class of super-famous trademarks. He offers the example of someone opening a Tiffany's restaurant, trading on the cachet of the jewelry store. Now some Fraygrant will help me out here, but there must be 2,000 Tiffany's restaurants already, no? This likely prompts Scalia to interrupt: "I am so far behind understanding you that I don't know if you just argued that a Tiffany's restaurant is bad."
Says Dellinger: "If there's a Tiffany's restaurant, a Tiffany's shoe store, a Tiffany's pet store …" Cuts in Scalia: "Where will it all end?" Dellinger tries to argue that such dilution is bad because it means Tiffany's no longer stands for something "singular and particular."
Breyer worries that if no one can make claims like: "It floats"; "99 and 44/100th percent pure"; or "the before-hand lotion"; then "you'll tie up free speech like mad." I guess these are slogans for something they maybe advertised once, in the Pleistocene era?
Here's where Dellinger's thong argument starts to pinch and ride: Scalia says maybe only Rolls-Royce gets this heightened protection, but "Chrysler doesn't matter."
"We're not talking about Chevrolet," says Justice Ruth Bader Ginsburg.
Responds Dellinger, "For those of us who live in NASCAR country, Chevrolet has more value than Rolls-Royce." He goes on to add that 39,000 Victoria's Secret catalogs were distributed in Elizabethtown, Ky., in 1998. Rehnquist is shocked. "Thirty-nine thousand catalogs? What's the population of Elizabethtown?"
Dellinger, uncertain, turns to Higgins.
"Four," says Higgins.
"He says four," answers Dellinger.
Thirty-nine thousand catalogues for four people is about right, if you've ever found yourself on a Victoria's Secret mailing list.
In offering his final hypothetical of the morning, Breyer gets caught in the embroidered merrywidow argument, i.e., he gets so confused between Victor's Secret and Victoria's that it's not clear which trashy garments he's talking about. Some of the justices point out that he's suffering a little trademark confusion himself.
The case ends on the same confused note on which it began. There is a trademark dilution statute that is supposed to protect more than traditional trademark law, but no one is quite sure how much more or how to prove it. It's not at all clear to me, or the court, that Victoria's Secret cat litter or aluminum siding really tarnishes the image of the lingerie giant. Nor is it clear why the cat litter people would choose that name unless they intended to unfairly profit from Victoria's Secret's success. The court will need to decide how much copycatting is acceptable, and how much more trademark protection to afford the famous, merely because they're famous. Will Victoria's Secrets be safe with the court? We'll know by the time their 400th spring catalog arrives.