Opinion ID: 146709
Heading Depth: 2
Heading Rank: 1

Heading: The Supreme Court Opinion and the New Act

Text: The Supreme Court explained that this case started when an Army Colonel at Fort Knox saw an ad for Victor's Secret in a weekly publication. It advertised that the small store in Elizabethtown sold adult videos and novelties and lingerie. [3] There was no likelihood of confusion between the two businesses or the two marks, but the Army Colonel was offended because the sexually-oriented business was semantically associating itself with Victoria's Secret. The Court explained that the concepts of dilution by blurring and dilution by tarnishment originated with an article in the Harvard Law Review, Frank Schechter, Rational Basis of Trademark Protection, 40 HARV. L.REV. 813 (1927), and that the history and meaning of the concepts were further well explained in Restatement (Third) of Unfair Competition, Section 25 (1995). The Restatement section referred to by the Supreme Court explains this new intellectual property tort and contains in § 25 a comprehensive statement of Liability Without Proof of Confusion: Dilution and Tarnishment. Tarnishment, as distinguished from dilution by blurring was the only claim before the Supreme Court and is the only claim before us in this new appeal. We quote at length the relevant Restatement explanation of tarnishment in the footnote below. [4] After reviewing a number of secondary sources other than the Harvard Law Review article and the Restatement, including state statutes on dilution and a Fourth Circuit case, the Supreme Court held that actual harm rather than merely the likelihood of tarnishment is necessary and stated its conclusion as follows: Noting that consumer surveys and other means of demonstrating actual dilution are expensive and often unreliable, respondents [Victoria's Secret] and their amici argue that evidence of an actual lessening of the capacity of a famous mark to identify and distinguish goods or services, may be difficult to obtain. It may well be, however, that direct evidence of dilution such as consumer surveys will not be necessary if actual dilution can reliably be proved through circumstantial evidencethe obvious case is one where the junior and senior marks are identical. Whatever difficulties of proof may be entailed, they are not an acceptable reason for dispensing with proof of an essential element of a statutory violation. The evidence in the present record is not sufficient to support the summary judgment on the dilution count. The judgment is therefore reversed, and the case is remanded for further proceedings consistent with this opinion. 537 U.S. at 434, 123 S.Ct. 1115 (emphasis added). Thus, the Court held that actual harm rather than merely a likelihood of harm must be shown by Victoria's Secret in order to prevail and that this means that Victoria's Secret carries the burden of proving an actual lessening of the capacity of the Victoria's Secret mark to identify and distinguish goods or services sold in Victoria's Secret stores or advertised in its catalogs. Id. In the new law Congress rejected the Court's view that a simple likelihood of an association in the consumer's mind of the Victoria's Secret mark with the sexually-oriented videos and toys of Victor's Secret is insufficient for liability. The House Judiciary Committee Report states the purpose of the new 2006 legislation as follows: The Moseley standard creates an undue burden for trademark holders who contest diluting uses and should be revised. . . . . The new language in the legislation [provides]. . . specifically that the standard for proving a dilution claim is likelihood of dilution and that both dilution by blurring and dilution by tarnishment are actionable. (Emphasis added.) U.S. Code Cong. & Adm. News, 109th Cong.2d Sess.2006, Vol. 4, pp. 1091, 1092, 1097. The relevant language of the new Act designed to carry out this purpose is recited and underlined in footnote 1, supra. The drafters of the Committee Report also called special attention to the burden of proof or persuasion placed on trademark holders by the Supreme Court's opinion in Moseley, suggesting a possible modification in the burden of proof. The question for us then is whether Victor's Little Secret with its association with lewd sexual toys creates a likelihood of dilution by tarnishment of Victoria's Secret mark.