Victoria's Secret, the largest US specialty lingerie retailer, will seek to persuade the US Supreme Court today to give trademark owners more protection from the use of similar names.
The Limited Brands-owned retailer sued owners of Victor's Little Secret soon after the Elizabethtown, Kentucky, seller of sex toys and lingerie opened in 1998. Victor and Cathy Moseley are challenging a ruling that the name of their shop reduces the value of the Victoria's Secret brand, which had US$3.3 billion in lingerie and cosmetics sales last year.
It's the first time the Supreme Court has reviewed the 1996 Federal Trademark Dilution Act, which granted broader protection for well-known trademarks. The question before the high court is whether trademark owners must show actual economic harm, or only the likelihood of harm, before they can challenge the use of a similar name.
"This is the most important trademark case before the Supreme Court in a long time," said Mark Levy, an appellate lawyer in Washington with Howrey, Simon, Arnold & White. He filed papers with the court on behalf of Intel Corp, one of the businesses seeking to uphold the greater protection.
Traditional trademark law is designed to protect consumers from confusion.
The dilution act allows owners of famous marks to sue even if there's no likelihood that consumers would think the two names were related.
Shares of Limited Brands fell US$0.82, or 5.5 percent, to close at US$14.16 on the New York Stock Exchange.
Victoria's Secret, known for catalogs and fashion shows featuring models clad in lacy underwear, accounted for about a third of the Columbus, Ohio-based company's sales last year.
The law was designed on the theory that repeated misuse of famous names reduces their unique value, lawyers for Victoria's Secret contend. For instance, Intel has filed more than 1,000 lawsuits worldwide against companies using Intel-owned names. It's sued Pentium Construction, Pentium Investment Advisors and others using the name of its key computer chip product.
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