Opinion
Civil Action No. 3:98CV-395-S.
February 9, 2000
MEMORANDUM OPINION
This matter is before the Court on the Motions for Summary Judgment filed by the Defendants, Victor and Cathy Moseley ("the Moseleys"), and the Plaintiffs, V Secret Catalogue, Inc., Victoria's Secret Stores, Inc., and Victoria's Secret Catalogue, Inc. (collectively, "Victoria's Secret"). Victoria's Secret has brought suit pursuant to the Lanham Act, 15 U.S.C. § 1051 et seq., the Federal Dilution Trademark Act, 15 U.S.C. § 1125(c), and Kentucky common law, alleging that the Moseleys are committing trademark infringement and unfair competition.
Defendants have also filed Motions to Strike Plaintiffs' Response to their Motion for Summary Judgment and Plaintiffs' Motion for Summary Judgment on the basis that Plaintiffs included in those pleadings affidavits from persons not previously identified as witnesses. We find that striking pleadings on such a basis to be inappropriate. As this Court has not relied upon any of the disputed affidavits in its ruling upon the Motions for Summary Judgment, the Motions to Strike will be denied by separate order.
FACTS
Plaintiff V Secret Catalogue, Inc. is the record owner of the "Victoria's Secret" mark, which has been registered in the United States Patent and Trademark Office since January 20, 1981. V Secret Catalogue licenses Plaintiff Victoria's Secret Catalogue, LLC and Plaintiff Victoria's Secret Stores, Inc. to use the "Victoria's Secret" mark. Victoria's Secret sells a complete line of women's lingerie, as well as other clothing and accessories.
Victoria's Secret Stores operates over 750 stores, and Victoria's Secret Catalogue distributes 400 million copies of the Victoria's Secret catalog each year, including 39,000 in Elizabethtown, Kentucky, where Defendants' store in located. Victoria's Secret's products are also sold over the Internet. Victoria's Secret has two stores in Louisville, Kentucky, within 60 miles of Defendants' store. One store has been open since November 16, 1982; the other since April 24, 1985. In 1998, Victoria's Secret spent over fifty-five million dollars on advertising its products. According to a recent survey, Victoria's Secret is rated as the ninth most famous brand in the apparel industry.
In February, 1998, Defendants Victor and Cathy Moseley opened "Victor's Secret," a store in a strip mall in Elizabethtown, Kentucky, selling a wide variety of items, including men's and women's lingerie, adult videos, sex toys and "adult" novelties. The Moseleys assert that they were not aware of Victoria's Secret's catalog or stores until they received a cease and desist letter from counsel for Victoria's Secret on February 25, 1998. The Moseleys subsequently changed the name of their store to "Victor's Little Secret."
DISCUSSION
Summary judgment is appropriate if "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). A party's failure to establish an element of proof essential to his case and upon which he will bear the burden of proof at trial constitutes a failure to establish a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). See also Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).
Federal Infringement Claims
The Moseleys ask for summary judgment in their favor on Victoria Secret's federal infringement claims on the basis that Victoria's Secret has presented no evidence of a likelihood of confusion due to the Moseleys' use of "Victor's Little Secret." The Court of Appeals for the Sixth Circuit has directed that in evaluating the likelihood of confusion, a number of factors should be examined. These factors include:
1. strength of the plaintiff's mark
2. relatedness of the goods or services
3. similarity of the marks
4. evidence of actual confusion
5. marketing channels used
6. likely degree of purchaser care and sophistication
7. intent of the defendant in selecting the mark
8. likelihood of expansion of the product lines using the mark.Frisch's Restaurant, Inc. v. Elby's Big Boy of Steubenville, Inc., 670 F.2d 642, 648 (6th Cir. 1982).
The Sixth Circuit considers the question of whether a likelihood of confusion exists to be a mixed question of law and fact. Homeowners Group, Inc. v. Home Mktg. Specialists, Inc., 931 F.2d 1100, 1107 (6th Cir. 1991). Examination of the factors listed above are questions of fact, but the determination of whether those facts establish a likelihood of confusion is a legal conclusion. Id.
In examining these factors, the Court concludes that the Moseleys are entitled to summary judgment upon the basis that, as a matter of law, no likelihood of confusion exists. Although not all of the above factors weigh against Victoria's Secret, taken together, they do not establish a likelihood of confusion.
A. Strength of Plaintiff's Mark
The strength of a mark is determined by its distinctiveness. Frisch's Restaurant, Inc. v. Shoney's, Inc., 759 F.2d 1261, 1264 (6th Cir. 1985). "A mark is strong if it is highly distinctive, i.e., if the public readily accepts it as the hallmark of a particular source; it can become so because it is unique, because it has been the subject of wide and intensive advertisement, or because of a combination of both." Id. (quoting Callman, Unfair Competition, Trademarks, Monopolies, ¶ 20.43 (4th ed. 1983)).
The Moseleys concede that Victoria's Secret's mark is "strong" but contend it is not "invincible." In support of this contention, they have submitted a list of 257 marks which include the word "secret" and have further cited fourteen marks as being very similar to Victoria's Secret marks. Defendants' Motion at 9. Victoria's Secret counters that most of those fourteen marks have been canceled or abandoned. In addition, Victoria's Secret has submitted evidence that their mark is the country's ninth-most recognizable mark in the apparel industry. Furthermore, Victoria's Secret registered its mark with the Patent and Trademark Office on January 20, 1981. "Once a mark has been registered for five years, the mark must be considered strong and worthy of full protection." Wynn Oil Co. v. Thomas, 839 F.2d 1183, 1187 (6th Cir. 1988).
B. Relatedness of the Goods or Services
Three basic categories of relatedness exist: "(1) direct competition of services, in which case confusion is likely if the marks are sufficiently similar; (2) services are somewhat related but not competitive, so that likelihood of confusion may or may not result depending on other factors; and (3) services are totally unrelated, in which case confusion is unlikely." Homeowners Group, 931 F.2d at 1108.
The Moseleys assert that the merchandise they sell in their store is very different than Victoria's Secret's merchandise, with the only common item being women's lingerie, which they submit accounts for only five percent of their total sales. In response, Victoria's Secret has submitted photos of the Moseleys' store which demonstrate that women's lingerie takes up much of their retail space. Thus, the products sold by Plaintiffs and Defendants are not completely unrelated. Whether the products are directly competitive or only somewhat related is unclear, but for purposes of our ruling, we will assume the products are in direct competition.
C. Similarity of the Marks, Degree of Purchaser Care, and Actual Confusion
On a side-by-side comparison, the two marks in question bear a large degree of similarity. Such a comparison, however, is not the appropriate test. Rather, "the marks must be viewed in their entirety and in context." Homeowners Group, 931 F.2d at 1109. Viewed in the context of the goods sold under the two marks, and in particular, the stores in which those goods are sold, little similarity exists between the two marks.
Victoria's Secret's stores are generally in upscale malls, with signage that is professionally done. In contrast, Victor's Little Secret is in a strip mall with handwritten signs advertising "Pagers for Sale" in the window. Every piece of clothing sold by Victoria's Secret has a "Victoria's Secret" label on it, while none of the clothing sold by the Defendants has a "Victor's Secret" or "Victor's Little Secret" label on it.
Intertwined in the analysis of the similarity of the marks is the degree of purchaser care. While not exorbitant, lingerie is not an inexpensive purchase, such as the packages of chewing tobacco in question in P.T.C. Brands, Inc. v. Conwood Co. L.P., 887 F. Supp. 963 (W.D.Ky. 1995), or an impulse buy in the manner of the fast food in Frisch's Restaurant, Inc. v. Elby's Big Boy of Steubenville, Inc., 670 F.2d 642 (6th Cir. 1982). Purchasers of Victoria's Secret's products use a far higher degree of care than such impulse buying, and thus, would have little difficulty in determining that Victor's Little Secret is unlikely to be associated with Victoria's Secret.
This conclusion is borne out by the fact that Victoria's Secret has not brought forward any evidence of actual confusion between the two trademarks. "There can be no more positive or substantial proof of the likelihood of confusion than proof of actual confusion." P.T.C. Brands, Inc. v. Conwood Co. L.P., 887 F. Supp. 963, 969 (W.D.Ky. 1995) (quoting World Carpets, Inc. v. Dick Litterell's New World Carpets, 438 F.2d 482, 489 (5th Cir. 1971)). Although not dispositive, the fact that Victoria's Secret has not produced any evidence of actual confusion weighs heavily in Defendants' favor.
D. Marketing Channels Used
Victoria's Secret and Victor's Little Secret use the same marketing channels. Both parties sell to the retail market, using both print and radio advertising. Defendants assert that they are somehow different because Victoria's Secret advertises on a world-wide scale, while Victor's Little Secret is advertised only locally in the Elizabethtown area. The scale of the advertising is irrelevant. In fact, the small scale of the advertising for Victor's Little Secret could actually weigh against the Defendants, as it may be evidence that the Defendants are taking advantage of a potential similarity between the trademarks to promote their products.
E. Defendants' Intent in Selecting the Mark
The Moseleys assert that their selection of "Victor's Secret" for the name of their store was a complete coincidence. They claim that they had never seen a Victoria's Secret catalogue or a Victoria's Secret advertisement prior to opening their store. Their explanation for the selection of the name "Victor's Secret" is that Victor Moseley wanted to keep the opening of his store quiet while working for a previous employer — thus, it was "Victor's Secret."
The noteable similarity between the two marks alone is enough to call into question Defendants' explanation, but Victoria's Secret also submits further evidence to rebut the Moseleys' claims. Mr. Moseley testified in his deposition that he was unemployed prior to opening his store. This not only tends to refute his explanation for the name "Victor's Secret," but seriously damages his credibility. "If a party chooses a mark with the intent of causing confusion, that fact alone may be sufficient to justify an inference of confusing similarity." Homeowners Group, 931 F.2d at 1111. For purposes of ruling upon this motion, we will assume Defendants selected their mark with the intention of causing confusion.
F. Likelihood of Expansion of Product Lines
The Moseleys asserts that they have no intention of expanding their business outside the Elizabethtown area, and Victoria's Secret has not presented any evidence to the contrary.
Conclusion
Although minor factual disputes remain extant, they are not material to the Court's determination of whether there is a likelihood of confusion. After examining the similarity of the marks, the degree of purchaser care, and lack of any evidence of actual confusion, the Court concludes that no likelihood of confusion exists as a matter of law. The Court finds that the fact that Victoria's Secret has not presented any evidence of actual confusion between the trademarks to be a particularly strong indicator that confusion between the marks is unlikely. Therefore, the Defendants' Motion for Summary Judgment will be granted as to Plaintiffs' federal infringement claims.
Federal Unfair Competition Claims and State Law Claim
As in infringement claims, the essence of an unfair competition claim is likelihood of confusion. Champions Golf Club, Inc. v. The Champions Golf Club, Inc., 78 F.3d 1111, 1123 (6th Cir. 1996) (citing Wynn Oil Co. v. American Way Svc. Corp., 943 F.2d 595, 604 (6th Cir. 1991)). Because we have found that no likelihood of confusion exists as a matter of law, we will grant summary judgment on Count II as well. In addition, the state law claims for infringement and unfair competition mirror the federal claims, and summary judgment will be granted as to Count IV.
Federal Dilution Act Claim
Plaintiffs and Defendants have both moved for summary judgment on Plaintiffs' Federal Dilution Act claim. Plaintiffs have asked for injunctive relief under Federal Dilution Trademark Act of 1995, 15 U.S.C. § 1125(c), which entitles the owner of a famous mark to an injunction against another person's commercial use of a mark or trade name, if such use "causes dilution of the distinctive quality of the owner's mark." Dilution can occur even where the products are not in competition and no likelihood of confusion is possible. 15 U.S.C. § 1127. See also Ameritech, Inc. v. American Info. Techs. Corp., 811 F.2d 960, 965 (6th Cir. 1987).
Although little case law exists on the recently enacted Federal Dilution Trademark Act, a reading of the statute makes clear that a plaintiff must show that: 1) its mark is famous, 2) the defendant is making a commercial use of its mark in commerce, 3) the defendant's use of its mark came after the plaintiff's mark became famous, and 4) the defendant's use of its mark dilutes the quality of plaintiff's mark. See Panavision Int'l, L.P. v. Toeppen, 141 F.3d 1316, 1324 (9th Cir. 1998).
Defendants do not challenge Victoria's Secret's claim that its mark is famous. It has been registered since 1981. We have earlier found the mark to be strong and worthy of protection.
It is also undisputed that the Defendants are making commercial use of their mark in commerce, and that such use began after Plaintiffs' mark became famous. Defendants have named their store "Victor's Little Secret," and ample evidence has been presented in the record that they advertise their store using this mark. Their store did not open until 1998, well after "Victoria's Secret" became a famous mark.
This leaves the Court only to consider whether Defendants' use of their mark dilutes the quality of Plaintiffs' mark. Dilution corrodes a trademark by "blurring its product identification or by damaging positive associations that have attached to it." Id. Dilution through tarnishing of a mark can also occur where a "junior mark is used on unwholesome or inferior goods or services that may create a negative association with the goods or services covered by the senior mark." Ringling Bros.-Barnum Bailey Combined Shows, Inc. v. Utah Div. of Travel Dev., 955 F. Supp. 605, 614 (E.D.Va. 1997). In order to dilute a more senior mark, the junior mark must be sufficiently similar. We find that Defendants' mark is sufficiently similar to Plaintiffs' mark in order to cause dilution.
Significantly, Defendants originally named their store "Victor's Secret." This name is quite similar to Plaintiffs' mark, "Victoria's Secret." The Moseleys subsequently changed the name to "Victor's Little Secret," but an examination of their signage and advertising reveals that this alteration is very minor. The word "Little" is substantially smaller than the words "Victor's" and "Secret," so much so as to make it an afterthought in the advertising. Therefore, we find the two marks to be substantially similar for purposes of Plaintiffs' dilution claim.
We also find that Defendants' mark dilutes Plaintiffs' mark because of its tarnishing effect upon the Victoria's Secret mark. Included in the inventory sold by the Moseleys, in addition to lingerie, are adult videos as well as sex toys and other "adult novelties." "Courts have frequently enjoined the `tarnishment' of a mark through association with unsavory goods, persons, or services." Anheuser-Busch, Inc. v. Balducci Publications, 28 F.3d 769, 777 (8th Cir. 1994). While the Defendants' inventory may not be unsavory to all, its more risque quality widely differentiates it from that of the Plaintiffs. We therefore enjoin Defendants from using the mark "Victor's Little Secret" on the basis that it causes dilution of the distinctive quality of the Victoria's Secret mark.
CONCLUSION
Defendants' Motion for Summary Judgment will be granted by separate order as to Counts I, II and IV, and denied as to Count III. Plaintiffs' Motion for Summary Judgment on Count III of its Complaint will be granted and Defendants will be enjoined from use of the mark "Victor's Little Secret" by separate order.
ORDER
For the reasons set forth in the memorandum opinion entered this date and the court being otherwise sufficiently advised, IT IS HEREBY ORDERED AND ADJUDGED that the Motion to Strike Plaintiffs' Response and the Motion to Strike Plaintiffs' Motion for Summary Judgment are DENIED.
The Motion for Summary Judgment made by the Defendants is GRANTED as to Counts I, II, and IV and DENIED as to Count III. Counts I, II and IV are dismissed with prejudice. The Motion for Summary Judgment made by the Plaintiffs as to Count III is GRANTED.
The Defendants are hereby enjoined from using the designation "Victor's Secret" or "Victor's Little Secret" or any mark similar thereto, or any reproduction, counterfeit, copy or colorable imitation of Plaintiffs' trademark.
IT IS SO ORDERED this 9th day of February, 2000.