The court says the shop Victor's Little Secret didn't hurt the lingerie giant, but sidesteps the question of how to measure trademark harm.
By BILL ADAIR, Times Staff Writer
© St. Petersburg Times
published March 5, 2003
WASHINGTON -- In a surprise unanimous decision, the U.S. Supreme Court ruled Tuesday for a Kentucky sex shop in a trademark dispute involving the queen of lingerie, Victoria's Secret.
The nation's highest court said the chain had not proven it was damaged when Victor Moseley named his shop Victor's Little Secret and sold a large assortment of lingerie, adult videos and sex toys.
But the opinion sidestepped the difficult question of how to measure trademark harm and sent the case back to a lower court. Moseley, who has since renamed the store Cathy's Little Secret, said he recognized his case is far from over.
"I think we won the battle, but we haven't won the war," he said.
Justice John Paul Stevens, author of the court's opinion, wrote that the sex shop's name "neither confused any consumers or potential consumers, nor was likely to do so."
Robert Brauneis, a George Washington University law professor who helped Moseley's legal team, summed up the decision this way: "David beat Goliath."
Victoria's Secret was expected to win because several justices hinted during oral arguments that they supported the chain. Chief Justice William Rehnquist told the lawyer for the Kentucky shop, "Your client doesn't come off well in this case."
Victoria's Secret had a high-powered legal team that included Walter Dellinger, a former solicitor general who had won 11 of his 15 cases before the court. A Duke University law professor, Dellinger was so well-connected that when he taught a course on the Rehnquist court, one of his guest speakers was the chief justice himself.
By contrast, Jim Higgins, Moseley's attorney, had never argued a case before the Supreme Court. During a practice session, Higgins performed so poorly that a law professor was concerned the justices would think Higgins was "a yokel."
But on Tuesday, the court endorsed Higgins' argument that a company must show actual harm to prove a trademark had been "diluted."
Moseley, a former manager for retail chains such as Target and Ames, opened the store in 1998 using money from his credit cards. He says he named it Victor's Secret because he did not want a former employer to know about it. He changed it to Little Secret in an unsuccessful effort to appease Victoria's Secret's attorneys.
After district and appellate courts ruled against him, Moseley appealed to the Supreme Court, which heard the case in November. Moseley had little money to pay his lawyers, so he created a legal defense fund -- a jar in his store where customers could toss their spare change.
Higgins said the ruling was proof that having a well-connected lawyer doesn't matter before the Supreme Court.
"In the law, reason trumps power," he said.
Despite the surprising unanimity on Tuesday, the court's opinion was vague and did not resolve the crucial issue of how to measure trademark dilution. The court said companies do not have to show an actual economic loss from the similar name -- a requirement that would have helped Higgins -- but the court did not specify what was needed.
"It doesn't give us a step-by-step, paint-by-numbers approach of what you have to prove," said Roger Schechter, a law professor at George Washington University who helped Higgins at the practice session.
The case will go back to to U.S. District Court in Louisville, which must create a standard with relatively little guidance from the Supreme Court.
It's likely Victoria's Secret will try to present new evidence to prove their trademark was harmed by the similar name. Higgins, meanwhile, will try to get the injunction lifted so Moseley can again use his name on the store.
Dellinger declined to comment.
Limited Brands, Victoria's Secret's parent company, issued a statement that said in part that it was pleased "the court agreed with our primary argument that proof of actual economic harm is not required to establish trademark dilution under federal law."
The final chapter will probably play out on Capitol Hill.
With Victoria's Secret and dozens of big corporations seeking a more favorable law, it's likely that the Republican-controlled Congress will consider changing the wording to provide more protection to famous trademarks.