Sixth Circuit: Adult Products Create Rebuttable Presumption of Trademark Dilution

The long-running dispute between the internationally-known lingerie retailer Victoria's Secret and the small retailer Victor's Little Secret has finally come to an end now that U.S. Supreme Court refused its certiorari request. Over a decade ago, Victoria's Secret sued Victor and Cathy Mosely to stop them from using the names "Victor's Secret" or "Victor's Little Secret" for a store in Elizabethtown, Kentucky, which sold merchandise that included sex toys and other "adult" products. During its first trip through the federal court system, the US Supreme Court famously ruled in Moseley v. V. Secret Catalog, Inc. (2003) that the Federal Trademark Dilution Act (FTDA) required a plaintiff (Victoria's Secret) to prove that actual dilution had occurred to obtain an injunction under the FTDA. This result upset many trademark owners who complained that they should not have to wait until their famous trademarks had been weakened by third parties before obtaining relief. Responding to these widespread objections, Congress overruled the Supreme Court decision by passage of the Trademark Dilution Revision Act of 2006 (TDRA), decided while the Moseley was on remand to the district court. The TDRA provides relief for two types of dilution: dilution by blurring or dilution by tarnishment. On remand, Victoria's Secret sought an injunction against Victor's Little Secret arguing that the small retailer tarnished the famous VICTORIA'S SECRET mark by associating it with sexually-oriented merchandise. Applying the new TDRA, the Moseley district court concluded that Victor's Little Secret disparaged the VICTORIA'S SECRET mark and issued an injunction in favor of Victoria's Secret. Moseley appealed to the Sixth Circuit. Upholding the district court's injunction, the Sixth Circuit considered the proof necessary for a "dilution by tarnishment" claim under the new TDRA. Over a dissent, the Sixth Circuit found that the sex-related products sold by Victor's Little Secret created a rebuttable presumption of dilution which shifts the evidentiary burden to the defendant to prove the absence of dilution, "if there is a clear semantic association between the two [trademarks]." The court found support for its "semantic association" standard based on prior dilution decisions involving pornography websites or movies. Explaining the basis for its decision, the Sixth Circuit stated: "The new law seems designed to protect trademarks from any unfavorable sexual associations. Thus, any new mark with a lewd or offensive-to-some sexual association raises a strong inference of tarnishment. The inference must be overcome by evidence that rebuts the probability that some consumers will find the new mark both offensive and harmful to the reputation and favorable symbolism of the famous mark." The Sixth Circuit held that the evidence to overcome this presumption could be expert testimony, surveys, polls, or customer testimony. Acknowledging that any tarnishment may be "speculative," the court found that the Moseleys failed to present evidence to rebut the presumption of tarnishment. In a dissenting opinion, Sixth Circuit Judge Karen Nelson Moore focused on the speculative nature of the claim alleged by Victoria's Secret and disagreed with the majority's burden-shifting presumption based solely on the nature of the goods sold by Mosely. Perhaps heartened by the dissent, Moseley sought to challenge the Sixth Circuit's "rebuttable presumption" standard before the Supreme Court. The Court's denial of the petition for certiorari leaves this presumption the law in the Sixth Circuit. Whether or not other circuits will follow is yet to be seen. – Suzanne Wilson

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