The case involves Victoria's Secret and a store that called itself Victor's Secret.
Victoria's Secret, of course, is the chain that features sexy women's lingerie, clothing and other accessories in its stores and catalog. At issue is whether the Kentucky store called Victor's Secret illegally diluted the chain's trademark.
But an eventual ruling in the dispute should have far-reaching consequences in the business community.
Victor's Secret, which lost the case in the lower courts, is asking the Supreme Court to define the meaning of the federal law.
The Federal Trademark Dilution Act bans any action that "causes dilution of the distinctive quality of the mark" of a competitor.
The Supreme Court must answer at least two questions in the case. Does there have to be some economic injury to the company whose name was imitated for there to be a violation of the law? Or does the mere likelihood of some dilution constitute a violation?
An eventual ruling in favor of Victoria's Secret would mean a solid victory for that company and other holders of the world's most famous trademarks.
A ruling for Victor's Secret would give smaller businesses more leeway when they play off the instant recognizability of their more established competitors.
In the case before the court, Victor and Cathy Moseley opened a store in Elizabethtown, Ky., called Victor's Secret in February 1998. The store's sign and local advertising featured a logo "of an index finger pressed across a pair of lips (as if to say 'shhh')." The Moseleys sell "a wide variety of items, including lingerie, clothing and accessories and adult novelties and videos."
They told the Supreme Court in a petition that they have never "been accused by law enforcement officials of selling 'illegal' or 'obscene' items in their shop."
Almost immediately after the store opened, a lawyer for Victoria's Secret sent the Moseleys a letter telling them that the name of their store would illegally cause confusion with the larger company's logo.
The Moseleys then changed the name of their shop to "Victor's Little Secret," but still used the "shhh" logo.
The name change did not satisfy Victoria's Secret, which filed suit in federal court, alleging a violation of U.S. trademark law.
A federal judge ruled that "Victor's Little Secret" was similarly enough to "Victoria's Secret" to cause dilution of the trademark -- even though the Moseleys's store was more risqué than the larger chain -- and ordered the Moseleys to stop using "Victor's Little Secret" or any similar name.
An appeals court agreed, the Moseleys asked the Supreme Court for review, which was granted last term.
(No. 01-1015, Moseley vs. V Secret Catalogue Inc. etc.)
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