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Moseley v. V. Secret Catalogue, Inc., 537 U.S. 418 (2003) (Stevens, J.)

This case answers the question “whether objective proof of actual injury to the economic value of a famous mark (as opposed to a presumption of harm arising from a subjective “likelihood of dilution” standard) is a requisite for relief under the 1996 Federal Trademark Dilution Act (FTDA)?”

The Supreme Court granted certiorari when the Sixth Circuit affirmed the district court’s entry of summary judgment under the FTDA against the Moseley’s in holding that the “Victor’s Little Secret” mark, used by the Moseley’s in their rural lingerie and adult toy business, diluted the distinctive quality of the famous “Victoria’s Secret” lingerie mark and constituted trademark dilution under the FTDA. No evidence of actual economic harm was presented by the respondent. The Fourth Circuit had interpreted the FTDA in 1999 to require proof of actual economic loss but the Sixth Circuit expressly rejected that interpretation and did not require proof of actual economic harm.

In reversing and remanding this case the Supreme Court noted that the FTDA provides relief if another’s commercial use of a mark or trade name “causes dilution of the [mark’s] distinctive quality,” §1125(c)(1) (emphasis added). The Fourth Circuit’s requirement of proof of actual economic loss was specifically rejected. The Court held that the FTDA unambiguously requires an actual “dilution showing” as confirmed by the FTDA’s “dilution” definition in §1127. It went on to say that this does not mean that the consequences of dilution, such as an actual loss of sales or profits, must also be proved.

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