Sixth Circuit Adopts "A Kind Of" Rebuttable Presumption in Certain Dilution by Tarnishment Cases
In a divided opinion, the Sixth Circuit decided the question of whether:
the plaintiff, an international lingerie company that uses the trade name designation "Victoria's Secret" has a valid suit for injunctive relief against the use of the name "Victor's Little Secret" or "Victor's Secret" by the defendants, a small retail store in a mall in Elizabethtown, Kentucky, that sells assorted merchandise, including "sex toys" and other sexually oriented products.
The District Court issued the injunction, concluding that even though the parties do not compete in the same market, the junior mark, "Victor's Little Secret," because it is "sex related," disparages and tends to reduce the positive associations and selling power of the "Victoria's Secret" mark.
The question on appeal was whether the plaintiff's request for injunctive relief satisfied the standards of the Trademark Dilution Revision Act of 2006 (TDRA), which had been intended to overrule the Supreme Court's interpretation of the earlier version of the Act in the same case (e.g., Moseley v. V Secret Catalogue, Inc., 537 U.S. 418 (2003)).
In that earlier decision, the Supreme Court concluded that the statutory language at the time required a showing of "actual dilution" rather than merely a "likelihood of dilution." Congress, however, rejected the conclusion and passed the TDRA providing for injunctive relief in connection with a junior mark "that is likely to cause dilution by blurring or dilution by tarnishment[.]"
Applying this "likelihood of dilution by tarnishment" standard, the Sixth Circuit concluded that there "appears to be a clearly emerging consensus in the case law . . . that the creation of an 'association' between a famous mark and lewd or bawdy sexual activity disparages and defiles the famous mark and reduces the commercial value of its selling power." This "consensus" apparently was based on eight federal cases that concluded, according to the Sixth Circuit, that "a famous mark is tarnished when its mark is semantically associated with a new mark that is used to sell sex-related products" and the Sixth Circuit found "no exceptions in the case law that allow such a new mark associated with sex to stand."
The Sixth Circuit also relied upon the fact that, according to the House Judiciary Committee Report, the TDRA intended to reduce the burden of evidentiary production on the holder of the famous mark. Thus, in light of what the Sixth Circuit called the "burden-of-proof problem," the Sixth Circuit concluded that the TDRA created "a kind of rebuttable presumption, or at least a very strong inference, that a new mark used to sell sex-related products is likely to tarnish a famous mark if there is a clear semantic association between the two." In somewhat broader statements, the Sixth Circuit stated that 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 the favorable symbolism of the famous mark.
As applied to the case before it, the Sixth Circuit concluded that the defendants had failed to offer evidence "that there is no real probability of tarnishment." Therefore, although the court agreed that the tarnishing effect on the senior mark was "somewhat speculative," there was "no evidence to overcome the strong inference" that the Sixth Circuit concluded applied to the case.
Circuit Judge Moore wrote a dissenting opinion arguing that the plaintiff had failed to meet its burden to show that the junior mark is likely to dilute the senior mark and taking issue with the majority's adoption of the rebuttable presumption (or strong inference):
With its conclusion that there is sufficient evidence of harm to the reputation of the VICTORIA'S SECRET mark based solely on the sexual nature of the junior mark, the majority sanctions an almost non-existent evidentiary standard and, in the process, essentially eliminates the requirement that a plaintiff provide some semblance of proof of likelihood of reputational harm in order to prevail on a tarnishment claim, despite the plain language of [the TDRA].
The dissent pointed to the limited evidence of tarnishment proffered by the plaintiff (consisting of an affidavit from an Army Colonel indicating that an association was made between the two marks and a statement from an officer of plaintiff regarding the "sexy and playful" image that plaintiff strove to maintain while avoiding "sexually explicit or graphic imagery").
Perhaps more notably, the dissent highlighted an issue that went unaddressed in the majority opinion, namely, the character of the senior mark when applying the "sex-related" rule it appeared to adopt. Specifically, the dissent noted that the plaintiff admitted that "its own mark is already associated with sex, albeit not with sex novelties." Therefore, the senior mark was "not entirely separate from the sexual context within which the junior mark . . . operates." This issue flagged a potential problem in applying the "sex-related" rule adopted by the majority:
The potential problem with simply assuming tarnishment when the junior mark places the senior mark in a sexual context becomes apparent if one considers a different case. What if the holder of a sex-related senior mark levied a claim of dilution by tarnishment against the holder of a junior mark that was similarly associated with sex? Would the court be willing to assume without further proof that despite their similar sexual origins the junior mark necessarily tarnishes the senior mark? Under the majority's reasoning, such an assumption would be appropriate. This cannot be the law.
Thus, the dissent concluded that under the plain language of the TDRA, "evidence that the junior mark is likely to undermine or alter the positive associations of the senior mark--i.e., evidence that the junior mark is likely to harm the reputation of the senior mark--is precisely the showing required[.]"
The case cite is V Secret Catalogue, Inc. v. Moseley, No. 08-5793 (6th Cir. May 19, 2010).
