It is the last straw, not the first straw, that breaks a camel's back — but a first straw can be as burdensome as a last one. In its opinion of March 4 in the Victoria's Secret case, the Supreme Court ignored that fact of a camel's life.
Drop the hoary metaphor. These are the facts:
Five years ago, when this litigation began, Victoria's Secret was operating more than 750 upscale stores around the world. In that year, the company spent $55 million advertising its line of lingerie, nightwear, robes, kimonos, soaps and fragrances. It racked up sales of $1.5 billion and distributed 400 million Victoria's Secret catalogs, 39,000 of them to residents of Elizabethtown, Ky. (pop. 22,542), just 35 miles south of Louisville.
On Feb. 12, a newcomer entered the retail field. Victor and Cathy Moseley announced the opening of their store, Victor's Secret, in a strip mall in Elizabethtown. They advertised their "intimate lingerie." It would transpire that lingerie represented only 5 percent of Victor's sales. The other 95 percent came from adult videotapes, adult novelties, adult T-shirts, adult coffee mugs, adult greeting cards, adult calendars and novelty action clocks.
An Army colonel, John E. Baker, stationed at nearby Fort Knox, saw the opening ad for Victor's Secret and launched a pre-emptive strike. He wrote to the real Victoria's Secret, advising the company of the Moseleys' venture into marketing. He objected to the newcomers' semi-appropriation of a reputable trademark to promote the sale of "unwholesome, tawdry merchandise."
Lawyers for Victoria's Secret responded by sending the Moseleys a stiff letter requesting them to cut it out. The defendants accordingly changed the name of their store on the strip mall to "Victor's Little Secret," but the lawyers were not placated. They sued their fleabite competitor for conduct that was "likely to blur and erode the distinctiveness" and "tarnish the reputation" of the Victoria's Secret trademark.
On cross-motions for summary judgment, Victoria's Secret won in U.S. District Court and won again in the 6th Circuit. Said the appellate court:
"While no consumer is likely to go to the Moseleys' store expecting to find Victoria's Secret's famed Miracle Bra, consumers who hear the name 'Victor's Little Secret' are likely automatically to think of the more famous store and link it to the Moseleys' adult-toy, gag gift and lingerie shop.
"This, then, is a classic instance of dilution by tarnishing (associating the Victoria's Secret name with sex toys and lewd coffee mugs) and by blurring (linking the chain with a single unauthorized establishment)."
In an opinion by Justice John Paul Stevens, the Supreme Court reversed. The basic Lanham Act, as amended in 1995, protects the owner of a "famous" mark, such as Victoria's Secret, from commercial use of its trade name — but only if such use "causes dilution of the distinctive quality of the mark." Because Victoria's Secret had failed to prove that Victor's Little Secret in Elizabethtown had actually "caused dilution," the lawsuit must be remanded for trial.
Even if it was unanimous, the decision was a bum one. The Moseleys clearly intended to trade on the good name of a long-established company. It is equally beyond dispute that Victor's Little Secret in Kentucky will never cut visibly into the sales of Victoria's Secret worldwide. That is not the point.
The act defines "dilution" as unfair use of a famous mark "regardless of the presence or absence of competition" between the owner and other parties, and "regardless of the likelihood of confusion, mistake or deception." The purpose of the act is "to protect famous trademarks from subsequent uses that blur the distinctiveness of the mark or tarnish or disparage it, even in the absence of a likelihood of confusion."
The equities in this case lie entirely on the side of Victoria's Secret. It is immaterial, or so it seems to me, that the Moseleys offered little competition or no competition at all. In defining "dilution" under the Trademark Act, the law views a first straw as quite as heavy as the last. Or to switch to another camel, the little store in Kentucky is symbolically a small nose pushing into a big tent — a small nose, but a big case.
E-mail Jack Kilpatrick at firstname.lastname@example.org