THE CASE OF DILUTION
TRADE MARK LAW
Moseley v Victoria’s Secret
Across the Atlantic, in the matter which came before the United States Supreme Court (Moseley et al., dba Victor’s Little Secret v V Secret Catalogue, Inc., et al (dated 3 March 2003 under case number 01/1015), the question of what evidence would be sufficient for purposes of proving the dilution of a well-known trade mark was considered in terms of the Federal Dilution Act.
In this matter, an action was brought by the trade mark proprietor (V Secret Catalogue (“V Secret“)) of the VICTORIA’S SECRET trade mark against the owners (Victor & Catherine Moseley) ) of a small “adult toy and lingerie store” in Kentucky, USA, trading under the name “Victor’s Secret”, and later “Victor’s Little Secret”. It was claimed by V Secret that the Moseley’s had, through the use of the mark VICTOR’S LITTLE SECRET, diluted its well-known VICTORIA’S SECRET trade mark by blurring its distinctiveness and tarnishing its reputation through the mark’s association with “unwholesome, tawdry merchandise“.
The lower courts, the United States District Court of Kentucky and the Sixth Circuit of the United States Court of Appeals, both found for V Secret, holding that the Moseley’s use of VICTOR’S LITTLE SECRET had indeed diluted V Secret’s famous VICTORIA’S SECRET trade mark both through the tarnishment (“associating the Victoria’s Secret name with sex toys and lewd coffee mugs“) and the blurring (“linking the chain [Victoria Secret] with a single, unauthorised establishment [Victor’s Little Secret]”) of the trade mark.
On appeal, the US Supreme Court, in an unanimous decision, overturned the decisions of the lower courts holding that, having regard to the “literal wording” of the United States Trade Mark Act, the Lanham Act (15 U.S.C. 1125), actual dilution was required to be shown and not a mere likelihood of dilution. In terms of section 43 of the Lanham Act, the proprietor of a famous trade mark is required to show that another’s use of his mark has “cause[d] dilution” of its distinctive quality. The Supreme Court held that this indicated “unambiguously that a showing of actual dilution, rather than a merely likelihood of dilution” was required.
As to what evidence would suffice for purposes of proving the “actual dilution” of a famous mark, no express guidance was given by the court. However, it was held that that the evidence which had been placed before the court (namely, that an army officer, having seen an advertisement for the opening of a store entitled VICTOR’S SECRET and having been concerned by what he perceived to be an attempt by a third party to use a reputable trade mark to “promote unwholesome, tawdry merchandise“, had sent a copy of the advertisement to V Secret) was insufficient to show the “actual dilution” of the VICTORIA’S SECRET trade mark.
In the court’s opinion, the evidence had not shown “a lessening of the capacity of the VICTORIA’S SECRET trade mark to identify and distinguish goods and services sold in VICTORIA’S SECRET stores or advertised in its catalogues.” Although the officer has clearly made a “mental association” between VICTOR’S SECRET and VICTORIA’S SECRET the association had not resulted in the officer believing there to be any trade connection or association between the marks or had led to his forming a negative perception of VICTORIA’S SECRET trade mark. As no offence was directed at the VICTORIA’S SECRET mark itself, no tarnishment or blurring of the mark could be said to have occurred.
Would the evidence placed before the US Supreme Court in the matter of Moseley v V Secret have been considered by the South African Constitutional Court to be sufficient for purposes of proving the dilution, and therefore infringement, of a well-known trade mark under the provisions of section 34(1)(c)? It is submitted that, were similar facts to be placed before the Constitutional Court, a finding, similar to that of the US Supreme Court would have been made. As a result, the evidence of the army officer would not have been considered sufficient for purposes of succeeding with a claim of trade mark infringement by dilution under the Act. In support of this submission, the words of the Constitutional Court should be borne in mind, that is, that in order to succeed with a claim of trade mark dilution in terms of section 34(1)(c) “the likelihood of substantial harm or detriment” to a mark is required to be shown by way of “established facts and not bald allegations“.
As no evidence was led that the army officer, in the matter of Moseley v V Secret, had formed any negative perception of VICTORIA’S SECRET or had deemed there to be any contractual or other association between the proprietors of VICTORIA’S SECRET and VICTOR’S SECRET, no diminution in capacity of the VICTORIA’S SECRET trade mark to distinguish had been shown. Nor had it been shown that the reputation of the mark had been soiled. A favourable outcome had, rather, been the result as the army officer, having been offended by the Moseley’s advertisement for VICTOR’S SECRET and the possible association of the VICTORIA’S SECRET trade mark with “unwholesome tawdry merchandise“, had immediately notified V Secret of the use by the Mosley’s of a mark which, in his opinion, was confusingly similar to its well-known mark. The negative perception was directed at the VICTOR’S SECRET mark not VICTORIA’S SECRET. Accordingly, “the likelihood of substantial harm or detriment” had not been shown and, therefore, no dilution (whether through blurring or tarnishment) of the trade mark could be said to have occurred.
The decisions of both the South African Constitutional Court (in the case of Laugh it Off) and the United States Supreme Court clearly indicate that merely inferring that dilution has occurred on the basis of unsubstantiated allegations will not suffice for purposes of succeeding with a claim of trade mark infringement through dilution. Nor will adducing evidence which does not actually show any “lessening of the capacity” of the trade mark to distinguish or any substantial harm or detriment to the reputation of the mark through negative connotations or a reduction in market share or sales. What is required is actual proof of the probability of, in most cases, economic harm to the trade mark proprietor as a result of the alleged infringement/dilution of his well-known mark. It is doubtful that this sort of evidence will ever be available because, although often alleged, classic dilution just does not seem to happen. The two most “diluted” marks in the world, ROLLS ROYCE and TIFFANY’S, both widely used to denote quality by wholly unrelated traders, have shown no signs of a lessened capacity to distinguish when used by their owners and the US courts remain as divided on the issue as they have always been because a good proportion of judges just do not see that there is any wrong being perpetrated by non-confusing use. It is difficult to disagree with them.