US Supreme Court set to end circuit court split

The US Supreme Court has heard the oral arguments in Moseley v V Secret Catalogue Inc (Case US, 01-1015). In a ruling expected this spring, the court will interpret the Federal Trademark Dilution Act (FTDA) for the first time and decide whether a plaintiff must prove actual present injury to its famous mark in order to be granted injunctive relief.

V Secret Catalogue Inc (VS) is the owner of the famous trademark VICTORIA'S SECRET for women's lingerie, and other clothing and accessories. Victor and Cathy Moseley own a store in Kentucky called 'Victor's Little Secret', which sells women's and men's lingerie, adult videos and sex toys.

When VS sued the Moseleys for trademark infringement and dilution, the district court dismissed the infringement claim, but granted the dilution claim and enjoined the Moseleys from using the name 'Victor's Little Secret'.

On appeal, the Court of Appeals for the Sixth Circuit affirmed the lower court's decision, adopting the position of the Second Circuit, which permits the grant of an injunction before injury (eg, dilution) has actually occurred. Other US appellate courts, however, have found that proof of actual present injury must first be shown.

During oral argument before the Supreme Court, the Moseleys argued that VS must show that it suffered measurable economic harm (eg, with consumer surveys providing objective proof of consumers' perception). VS, on the other hand, argued that the FTDA allows owners of famous marks to prevent such harm from occurring in the first place.

The Supreme Court is expected to issue a decision this spring, which will put an end to the split among the US appellate courts on this issue.

Ron N Dreben and Cara Boyle, Morgan Lewis & Bockius LLP, Washington DC