WASHINGTON, Nov. 12 (UPI) -- The Supreme Court heard argument Tuesday on the scope of the Federal Trademark Dilution Act.
The case pits lingerie giant Victoria's Secret against a Kentucky store that called itself Victor's Secret.
But an eventual decision by the justices will determine how much protection famous trademarks have against those who wish to play off their names.
The Federal Trademark Dilution Act bans anything that "causes dilution of the distinctive quality of the mark" of a competitor.
The Supreme Court must decide whether that means there has to be some economic injury, or whether the mere likelihood of some dilution constitute a violation of the law.
In the case before the justices, 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')."
In a brief to the high court, the Moseleys said they sell "a wide variety of items, including lingerie, clothing and accessories and adult novelties and videos."
They quickly point out, however, 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, an officer at a nearby Army post sent Victoria's Secret a letter pointing out that the company had a small-town imitator.
A lawyer for Victoria's Secret then 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 change was not enough for Victoria's Secret, which filed suit in federal court, charging a violation of trademark law.
A federal judge ruled that "Victor's Little Secret" was similar enough to "Victoria's Secret" to cause dilution of the trademark -- even though the Moseleys's store was more risqué.
The judge ordered the Moseleys to stop using "Victor's Little Secret" or any similar name.
When an appeals court agreed, the Moseleys asked the Supreme Court for review.
Speaking for the Moseleys Tuesday, Louisville, Ky., attorney James Higgins Jr. told the justices in order for a violation to have occurred, "there must be objective evidence that consumers identified the accused mark with the famous mark."
The Bush administration supported Victor's Secret. Deputy Solicitor General Lawrence Wallace told the court that dilution could occur if consumers associated products at Victoria's Secret with those at Victor's Secret, "the tasteful vs. the tasteless."
But arguing on behalf of the larger company, former acting Solicitor General Walter Dellinger told the justices federal law does not require actual harm before a violation occurs. "There is simply no such requirement in the statute."
There were a few laughs during Tuesday's argument.
Before Wallace began, Chief Justice William Rehnquist congratulated him on his upcoming retirement, pointing out that the present case was the 157th time he had argued before the Supreme Court in the 34 years he had been at the Justice Department.
"That doesn't mean we're going to rule in your favor," the chief justice deadpanned.
A ruling should be handed down within the next couple of months.
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(No. 01-1015, Moseley vs. V Secret Catalogue Inc. etc)
