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Supreme Court rules for sex shop in trademark case

By Bill Mears
CNN Washington Bureau

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WASHINGTON (CNN) -- A small Kentucky sex shop won a victory in court Tuesday against a world-famous lingerie manufacturer in a case testing the limits of economic harm to brand names.

The Supreme Court unanimously ruled "Victor's Little Secret" did not infringe on the trademark held by the similar sounding "Victoria's Secret."

The question involved the legal standard called "dilution," which the federal government interprets as "the lessening of the capacity of a famous mark to identify and distinguish goods and services."

"There is a complete absence of evidence of any lessening of the Victoria's Secret mark's capacity to identify and distinguish foods or services sold" in its stores or through its catalogs," wrote Justice John Paul Stevens in the court opinion.

Justices agreed more objective evidence of economic harm was needed by Victoria's Secret than merely stating that the public would confuse a disputed mark with another, more famous mark.

"Use of the name 'Victor's Little Secret' neither confused any consumers or potential consumers, nor was likely to do so," Stevens wrote.

The court offered no clear guidelines for companies to prove their brand name was harmed. Stevens acknowledged the difficulties companies face, saying "consumer surveys and other means of demonstrating actual dilution are expensive and unreliable."

The case involved a Kentucky sex shop once called Victor's Secret that continues to sells "adult novelty" and "wild outfits." The owners of the mom-and-pop store claimed the name was inspired by Victor Moseley's desire to keep the business secret from a former employer.

Nevertheless, the couple was sued by Victoria's Secret, the big Columbus, Ohio-based lingerie seller, which claimed unfair competition and trademark infringement. The store did change its name to "Victor's Little Secret" to avoid a lawsuit, but to no avail.

A federal appeals court upheld a lower court ruling, affirming trademark infringement by saying the name 'Victor's Little Secret' would make the public think of the well-known catalog brand.

"While no consumer is likely to go to the Moseley's' store expecting to find Victoria's Secret's Miracle Bra, consumers who hear the name 'Victor's Little Secret' are likely automatically to think of the more famous store and link it to the Moseley's adult-toy, gag gift, and lingerie shop," read the opinion.

Victor Moseley and his wife Cathy (the store is now called Cathy's Little Secret) claimed Victoria's Secret did not have a "distinctive quality" because "secret" is used by many lingerie stores and companies as part of their advertising.

It is unclear whether the Moseleys will now go back and change their store to its original name.

The case is Moseley v. Victoria's Secret Catalogue, 01-1015.

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