A case before the Supreme Court pits Victoria's Secret against the owner of a Kentucky lingerie store. The question: Who has the right to a name?
By BILL ADAIR, Times Staff Writer
© St. Petersburg Times, published November 17, 2002
LOUISVILLE, Ky. -- In his brief to the U.S. Supreme Court, Jim Higgins said the fact that his client sells sex toys is irrelevant.
Yes, Victor Moseley sells lingerie, leather outfits and "adult videos and novelties," Higgins wrote. But the case is about words -- whether Moseley damaged the undisputed queen of sexy merchandise, Victoria's Secret, when he named his store Victor's Little Secret.
Higgins is an expert in trademark law, but he had never argued a case before the Supreme Court and he and his client faced formidable opponents. Higgins said this was the challenge of a lifetime.
"The big money is behind Victoria's Secret," the lawyer said. "They want it to be easy to maintain their fame."
Higgins is right that the case is about words. But in a larger sense it's also about class and money, and two very different approaches to selling sexuality.
It's about one of the world's best-known brands and how far the owner will go to protect it -- all the way to Elizabethtown, Ky.
Victor Moseley has spent his career in retail.
As a manager for Target, Ames and a small chain of head shops, he loved the unpredictable nature of the business and the sense of accomplishment in finding the right product for each customer -- he was a matchmaker of merchandise.
Five years ago, laid off from the head shop, he wondered what to do next. The big chains weren't hiring, and he wasn't interested in working for them, anyway. Why make a big corporation even richer?
He originally planned to open a shop selling rock 'n' roll posters and lava lamps, but decided on lingerie and adult products because his wife, Cathy Moseley, had been successful selling oils, massage mitts and sex toys at in-home parties. "They show the toys and they laugh and they giggle and they have a hell of a lot more fun than at a Tupperware party," Moseley said.
But how could he and his wife afford to own their own store?
Cathy: "We don't have any money."
Victor: "We've got a credit card."
They considered dozens of possible names for the store, including Adult Toys R Us, Secret Moments and Bumpin Ugly. They say they chose Victor's Secret because they wanted to keep the store a secret from Moseley's previous employer.
Moseley, 46, has a rugged face, a slight belly and light brown hair that is starting to turn gray. He keeps a pack of Doral Ultra Light 100s in his shirt pocket and often stands outside the store to smoke. He and his 47-year-old wife have been married 30 years and have four children ages 18 to 29.
His store is in Elizabethtown, a working-class city 50 miles south of Louisville that grew up around Fort Knox, headquarters for the Army's tanks. E-town, as the locals call it, is big enough to have a Home Depot, but too small to get a Toys R Us.
Moseley's store is in a weathered strip mall that is also home to A-1 Vac, Dollar General and Big Lots.
Inside his store are racks of see-through teddies, lace panties, leather chaps and silk stockings. Signs say "Robes compliment the outfit!" and "Leather -- Naughty or Nice?" The floor is covered with brown and green shag carpeting. A stereo plays Smoke on the Water.
Hanging on the wall are G-strings for men that say "Lovetoy" and "Hot Stuff." Behind the counter are games such as Romantic Rendezvous and Between the Sheets ("Turns your bed into the ultimate adventure").
Only adults are allowed in the locked back room, which offers a wide variety of sexual videos and DVDs such as Sunset Love and Nevada Nookie. Also in the back room are vibrators, dildos and inflatable dolls.
"This type of shop is truly needed in a community," Moseley said. "The need for (sexual products) is huge. A woman or a guy should not feel uncomfortable buying them -- it's not dirty."
He picked up a photo of a baby on his wall. "My grandchild," he said.
Actually, the child isn't related but was conceived with the help of his products. He said several customers who had difficulty becoming pregnant have now given birth to "miracle babies." Other customers have thanked him for helping to save their marriages.
"You make 'em feel good about themselves rather than make them feel terrible. They enjoy themselves and Mother Nature takes its course."
Moseley said he's especially popular at a local church because he donated see-through teddies and a purple and black leather outfit to the charity auction.
He said he has been successful because he serves the community's needs. He pointed to a large mannequin wearing a plus-size teddy.
"Victoria's Secret doesn't have that," he said. "That's real-world -- most women are not a size 5."
"GRAND OPENING -- Just in time for Valentine's Day!" said the advertisement on page 6A of Inside the Turret, a Fort Knox newspaper.
The Feb. 12, 1998, ad said the store would sell adult novelties, pagers and "intimate lingerie for every woman."
Col. John E. "Jeb" Baker, a lawyer at the Army base, spotted the ad while reading the paper in his corner office at Pike Hall. He was offended.
"Ads for sex toys are not the sort of thing we want to have in our newspaper," he recalled recently.
He believed Moseley's store was trying to capitalize on Victoria's Secret, so he faxed the ad to the headquarters of the big clothing chain in Columbus, Ohio.
Two weeks later, Moseley received a FedEx letter from G. Mathew Lombard, Victoria's Secret's "intellectual property counsel." It said the company's name has "acquired widespread public recognition and goodwill in the United States and is an extremely important and valuable asset of our client."
Lombard told him to stop using the similar name "immediately."
Moseley called Lombard and said he never intended any similarity. He would change the name to make sure there was no confusion. They discussed the possibility of Precious Little Secrets and a few others, but agreed on Victor's Little Secret, according to Moseley. (Victoria's Secret declined to comment for this story.)
Moseley had a sign made with the new name, filed papers to change tax documents and reprogrammed his cash register and credit card machine.
A month later, a second FedEx letter arrived. This one was from Frank Colucci, another Victoria's Secret lawyer. It demanded photos of the store, a proposed logo, a list of his products and samples of his lingerie.
Moseley got angry.
What right did they have to see samples of his lingerie? He called Lombard.
"If you want to sue me, come down to Kentucky and sue me," Moseley said. "But pack a lunch. It's going to take a long damn time."
The lawsuit was filed three months later in U.S. District Court in Western Kentucky. It said Moseley had used the names "to convey a commercial impression substantially identical to Victoria's Secret" and that his names would "blur and erode the distinctiveness" of the big chain's trademark.
The court ruled that Moseley was diluting the trademark and ordered him to change the name.
Before he appealed, Victoria's Secret offered to settle the case, according to Moseley. They offered an undisclosed amount of money ("It was a lot more money than I ever had," he said). In return, he would not appeal.
Moseley changed the name to Cathy's Little Secret to comply with the court order but said he wasn't ready to give up. He summoned his family for a meeting and everyone agreed to appeal.
"I made the decision I was willing to lose everything I own," he said. "If you can't have your own name, what the hell do you have?"
The 6th U.S. Circuit Court of Appeals in Cincinnati also ruled against him. It said his store "tarnished" Victoria's Secret by linking it with "sex toys and lewd coffee mugs."
When Higgins filed his brief asking the Supreme Court to accept the case, he included a strange citation: a Cathy comic strip.
In the strip, Cathy finds men are more interested in electronic gadgets than in smart, well-dressed women. "Forget Victoria's Secret," she says. "Women should shop in Victor's Secret."
It was a good omen, Higgins felt, so he sent it along to the nine most powerful judges in the nation.
Higgins is skilled at patent and trademark law (he won a $31-million patent infringement case for a client) and has a sense of humor and a refreshing innocence. He joked that the Victoria's Secret lawyers view him as a country hick. He said they "didn't think we had the Internet here in Kentucky."
His opponent was Walter Dellinger, a former solicitor general of the United States who had been hired by Victoria's Secret.
Higgins went to work. He studied court opinions until 3 a.m. He flew to Washington to rehearse in front of law professors.
The case was constantly on his mind. He said he had "a recurring nightmare" that he would refer to a justice by the wrong name -- as a lawyer did in the landmark Florida elections case two years ago.
"This is 'The Show' for lawyers," Higgins said of the Supreme Court. "It's incredibly long odds to get there. The very same day they granted cert in our case, they denied it in 402 others."
Higgins, 59, grew up in a Cleveland suburb, a self-described "Sputnik kid" who got interested in science during the patriotic push of the 1950s. He studied engineering at Alfred University in Alfred, N.Y., and played on the school's freshman basketball team. Only 5 feet 6, he compensated with deft ball-handling.
He became a ceramic engineer but decided the career would be too limiting, so he went to law school at night and became a lawyer. His colleagues call him "Professor Higgins" because he teaches at the University of Louisville law school.
"He's very good at thinking on his feet," says Charles G. Middleton III, managing director of his firm, Middleton Reutlinger, in Louisville.
Middleton says the Victor vs. Victoria case -- the firm's third before the Supreme Court -- is "quite a feather in our cap."
Higgins says the legal bills will probably exceed $250,000. It's not clear how Moseley can afford that or whether he'll have to pay the full bill. He would have to sell a lot of teddies.
The store has gotten lots of publicity, but Moseley said it has hurt his business because many customers are afraid they'll be photographed.
Victoria's Secret began in the San Francisco area in the late 1970s. Founder Roy Raymond wanted a warm atmosphere for selling lingerie, so he created the image of a Victorian boudoir. In 1982, he sold his three stores and small catalog operation to the Limited, the retailing giant that owns Express, Bath & Body Works and Lerner New York.
Now called Limited Brands, the company is headquartered in Columbus, Ohio, but for years pretended Victoria's Secret was British, even giving the store a London address and using a British voice on the 800-number. Today, Victoria's Secret calls itself "one of the most powerful, sexy brands in the world." A 1998 survey rated it the nation's ninth-most recognized brand, behind Sheer Energy pantyhose.
Victoria's Secret has been aggressive with its trademark, registering the name for lingerie, kimonos, candles, bedding and nonmedicated foot powder. Yet the company with an ad campaign of sexy angels has been no angel with other company's trademarks. A court limited how Victoria's Secret could use the term "Miracle" for its swimwear because another company owned "MiracleSuit." And Victoria's Secret had to settle a case with the rock band Metallica after using that name for a shade of lip pencil.
There's big money to be made in lingerie. From 1994 to 1998, Kentucky residents bought nearly $30-million of Victoria's Secret catalog merchandise. Nationwide, the company's stores in 1998 took in $1.5-billion.
More than 400-million catalogs are mailed to U.S. customers every year, with 39,000 in E-town alone. A business professor hired by the chain said it's "statistically likely" that most women in town would have received at least one catalog in 1998.
Victor and Victoria offer similar lingerie but distinctly different philosophies.
Victoria's Secret sells an airbrushed, refined version of sex peddled by supermodels in seductive poses. Victor's approach is more frank and humorous. Victoria's Secret sells the Emma Collection of seamless stretch lace. Victor sells furry handcuffs.
Two weeks ago, Walter Dellinger sat in the sun-lit study of his Victorian home in Chapel Hill, N.C., playing rock 'n' roll.
Two young lawyers from his Washington firm had arrived to help him prepare his argument on behalf of Victoria's Secret, but he first wanted to play a few songs. He played the opening riff of Johnny B. Goode and declared, "This is a serious contender for the best rock 'n' roll song ever."
Dellinger's study looks like a scene from Southern Living, filled with rustic wood furniture and diffuse sunlight. On his bookshelves are tomes such as Feminist Legal Theory and Merits Briefs of Acting Solicitor General Walter Dellinger. He had arranged his notes for the Supreme Court argument on several easels around his desk like a maestro preparing for a concert.
"Jeremy, your notes were great," he told Jeremy Maltby. "I made a few changes this morning."
Dellinger, 61, grew up in Charlotte, the son of a banker who died when Walter was 12. His mother worked as a sales clerk in clothing and furniture stores to support the family. Dellinger had political ambitions as a young man, protested against segregated movie theaters, and went to Yale Law School. He later became a law professor at Duke University and worked five years in the Clinton administration.
He is often mentioned as a possible Supreme Court nominee if Democrats win the presidency. Fortune magazine called Dellinger and Harvard's Laurence Tribe the "Michael Jordans of constitutional law."
Dellinger has argued 15 cases before the Supreme Court and won 11. When he taught a class on the Rehnquist court, one of the guest speakers was Rehnquist himself.
Colleagues say Dellinger has a sharp legal mind and is a great storyteller. That's important before the Supreme Court because attorneys have 30 minutes or less to explain their case.
Yet Dellinger still has the air of the absent-minded professor.
He and the lawyers piled into his Mercedes and rushed across town to the Duke Law School to practice his argument. But once they arrived in the parking lot, there was a strong odor of gasoline.
"Hey, Walter, you're leaking gasoline," one of them said.
Dellinger responded matter-of-factly: "I always forget the gas cap."
Moseley may have chosen a bad time in commercial history to challenge a big corporation over a name. The theory of branding -- that name and image are as crucial as the product -- is very much in vogue.
"Clearly, brands win," wrote Leslie Wexner, CEO of Limited Brands, Victoria's Secret's parent company. "Today, I believe it's possible to build a portfolio of multi-billion dollar master brands."
Trademarks have been around since medieval days, when craftsmen and artisans put their "mark" on products. Today, the federal government allows companies to register their marks with the Patent and Trademark Office so they will be protected from competitors.
Trademarks are based on the legal concept of unfair competition, that businesses shouldn't try to hoodwink people by pretending to be a different company.
You need only read the case names to understand trademark fights: Federal Express Corp. v. Federal Espresso Inc., Toro Co. v. ToroHead, and Park 'N Fly v. Dollar Park and Fly.
There are two basic ways you can damage or abuse another company's trademark. You could use it without authorization (building golden arches in front of your restaurant). Or, you could "dilute" the other company's mark by blurring (using a name that makes the famous trademark lose its distinctiveness) or tarnishing (linking it with less desirable products).
At issue in Moseley v. Victoria's Secret Catalogue is how a company demonstrates another business has diluted its trademark -- whether it must be proven with financial results or a consumer survey, or whether a court can predict the famous name will become tarnished.
Federal appeals courts have been divided. One case involved the Ringling Brothers circus, which sued the state of Utah about an ad campaign boasting "the greatest snow on earth." The court ruled against the circus, saying it needed to prove its similar slogan had been harmed.
But another court blocked Nabisco from making a goldfish-shaped cracker because it "diluted the distinctive quality" of Pepperidge Farm's fish. That case allowed companies to use circumstantial evidence about future damage.
Higgins wants the Supreme Court to take the Ringling approach and require objective proof that Victoria's Secret's trademark has truly been damaged. But Dellinger wants the court to follow the Nabisco decision and allow owners of famous trademarks to stop companies from diluting names before damage is done.
Big companies such as Intel, Ringling Brothers, Bacardi, Bank of America, Pfizer and Newsweek filed amicus or "friend of the court" briefs to support Victoria's Secret. Higgins said that showed how big corporations were trying to out-gun little entrepreneurs like Moseley.
"A funny thing happened on the way to this forum."
That was Higgins' opening line at the rehearsal argument he presented at George Washington University in October.
Six lawyers and professors acting as justices didn't laugh.
Higgins soldiered on, explaining his case and using a technique known as listen, answer, bridge, a way to answer a justice's question and "bridge" to an unrelated but important point.
Roger Schechter, a GWU law professor at the practice session, grew concerned Higgins was too folksy. He was afraid the justices would wonder, "Who is this yokel? Why is he wasting our time?"
After the session, Schechter and the others were quite critical of Higgins. They told him to avoid humor.
"You're from Kentucky," Schechter said he told Higgins. "You are not a repeat player before the Supreme Court. You have a burden to come across as serious and grave and learned in a way that your adversary does not. He can get away with a joke."
An oral argument is an attorney's last chance before the highest court. Once the argument is over, the justices go behind closed doors to discuss the case and then issue a decision several months later.
Lawyers find the arguments unnerving because justices frequently interrupt with questions and criticisms. The sessions are truly arguments -- justices are not shy about saying when an attorney has a weak case.
The arguments aren't as important as the briefs filed with the court, but they can guide the court's discussions. Lawyers say that far more cases are lost in arguments than won.
Higgins agreed with the professors' criticisms, that he spent too much time defending Moseley's reputation and made too much of Dellinger's retreat on the question of how much dilution is necessary for trademark violation.
He said he found the criticism "enlightening" and that he wasn't intimidated by Dellinger's expertise before the court.
"The law is the one place where reason out duels power."
Last Monday, Higgins flew to Washington and did a final practice session at his hotel. He said the session went so well that they were able to focus on tiny details such as the pronunciation of plenary.
In the hotel bar that night, he was joined by virtually his entire family -- his father, brother, sister and their spouses. They drank beer and wine, but Higgins stuck to ice water. He wanted to keep his head clear.
On Tuesday, the morning of the arguments, as he walked to the court in a steady drizzle, Higgins said he hadn't slept well. Another lawyer had asked if he had butterflies in his stomach. Higgins said, "I think my butterflies have turned into pterodactyls."
On the plaza in front of the Supreme Court, about 100 people waited in the rain to get a seat for the arguments. The Moseleys and two of their sons were in line, even though they had two passes for guaranteed seats.
Moseley, who looked a bit uncomfortable in a dark business suit (he really wanted to be home hunting deer) said they didn't want to split up.
"We started this as a family, we'll finish this as a family."
He was pessimistic about his chances, pointing at the big words etched on the front of the building.
"See that up there -- it says, 'Equal Justice Under Law.' They've got to convince me," he said. "I have no faith in the justice system whatsoever. I think money buys you whatever you want."
Higgins stepped to the lectern.
"Mr. Chief Justice, and may it please the Court."
Higgins had waited a lifetime for this moment. He was in the court's ornate chamber, a gymnasium-sized room with a high ceiling and huge marble columns on each side. The justices sat above him, rocking in their high-backed chairs. Higgins wore a dark suit, a red tie his wife had given him, and a lapel pin of an American flag.
"We are here today to obtain a construction of the Federal Trademark Dilution Act, FTDA, that will keep federal trademark law in its proper bounds."
He got off to a weak start. He spoke in a monotone, dryly reading a summary of his main points. The justices quickly cut him off with rapid-fire questions. Define dilution. Define tarnishment. Can a company sell Kodak pianos? Buick shoes?
The questions brought Higgins to life. He handled them confidently -- listen, answer, bridge -- and said the court needed to clarify the law's fuzzy language.
Justice Antonin Scalia then fired a zinger, accusing Higgins of contradicting himself on how to measure dilution.
"I don't understand what your position is," Scalia said with exasperation. "I don't understand what it is that you demand. What?"
Higgins noticed that Scalia was shaking his head, as if saying "You're not making it, buddy."
But Higgins didn't let the conservative justice throw him off stride. He assuredly told Scalia that Victoria's Secret must prove Moseley had diluted the company's name. "That's best done by consumer surveys."
Higgins then said he wanted to reserve the balance of his time for the end. That meant he would have the last word.
Dellinger stepped to the lectern and unfolded his notes. He had glued them to the back of manilla folders so they resembled a restaurant menu. His main points were in the center of the folder, like the entrees. At the top was a bold reminder to say, "MAY IT PLEASE THE COURT."
He had expected Higgins to say Moseley was entitled to keep his own name on the store, so Dellinger was ready with a snappy reply. He was going to say that if that were the case, he was changing his name to Coca-Cola Dellinger.
But Higgins hadn't said much about Moseley, so Dellinger held his fire. He said the law does not require Victoria's Secret to prove it suffered economic harm. It merely has to show that its trademark has lost its uniqueness.
"If you lose distinctiveness, what you lose is the selling power of the mark," Dellinger said.
He made sure the justices did not think this was Goliath against David, raising the prospect that a single store could multiply and destroy a trademark.
"If there can be one store under Victor's Little Secret in Elizabethtown, Kentucky, there can be a thousand."
As he responded to the justices' questions, two attorneys on his team slipped him notes suggesting phrases.
"Un-ring the bell," said one note.
A short time later, Dellinger said, "Once you've tarnished a product, it's hard to un-ring that bell in the public's mind."
When Dellinger's time expired, Higgins got his final two minutes. This was his last chance before the decision comes down months from now.
His self-doubt was gone. He was forceful and clear.
"Our standard keeps trademark law in its proper bounds. Their standard merely rewards the achievement of fame," he said, looking at each justice. "Our standard, if applied in this case, should result in this court reversing the injunction and directing that the petitioners be allowed to use Victor's given name in their business."
"Thank you, Mr. Higgins," Chief Justice Rehnquist said. "The case is submitted."
Staff writer Bill Adair can be reached at (202) 463-0575 or email@example.com