V Secret Catalogue, Inc. v. Moseley

• Decision Date: 21 May 2008
• Docket Number: Civil Action No. 3:98CV-395-S.
• Citation: 558 F.Supp.2d 734
• Court: U.S. District Court — Western District of Kentucky
• Parties: V SECRET CATALOGUE, INC., et al., Plaintiffs v. Victor MOSELEY and Cathy Moseley d/b/a Victor's Little Secret, Defendants.

Page 734

558 F.Supp.2d 734

V SECRET CATALOGUE, INC., et al., Plaintiffs v. Victor MOSELEY and Cathy Moseley d/b/a Victor's Little Secret, Defendants.

Civil Action No. 3:98CV-395-S.

United States District Court, W.D. Kentucky, at Louisville.

May 21, 2008.

Courtney W. Monahon, Frank J. Colucci, W. Brant Mossop, Colucci & Umans, New York, NY, Reford H. Coleman, Coleman, Lochmiller & Bond, Elizabethtown, KY, for Plaintiffs.

Brian H. Stephenson, Clark & Ward, PLLC, Louisville, KY, Don A. Pisacano, Miller, Griffin & Marks PSC, Lexington, KY, John E. Spainhour, Givhan & Spainhour, PSC, Shepherdsville, KY, Licha H. Farah, Jr., Clark & Ward PLLC, Lexington, KY, for Defendants.

MEMORANDUM OPINION

CHARLES R. SIMPSON, III, District Judge.

This matter is before the court on cross-motions of the parties for summary judgment. This case has had a long and colorful past which will be briefly described.¹

I. History of the Case

Victor and Cathy Moseley own and operate a retail store formerly named "Victor's Secret" and later "Victor's Little Secret."² The store was self-described in its advertising as selling "Intimate Lingerie," "Romantic Lighting," "Lycra Dresses," "Pagers," and "Adult Novelties/Gifts." It is located in Elizabethtown, Kentucky, a short distance from Louisville. An army colonel who saw the ad for the store opening was offended by what he perceived as an attempt to use Victoria's Secret's trademark to promote "unwholesome, tawdry merchandise." He sent a copy of the ad to the plaintiffs, the affiliated corporations of V Secret Catalogue, Inc., Victoria's Secret Stores, Inc., and Victoria's Secret Catalogue, Inc. (hereinafter collectively "V Secret").

At the time of the Supreme Court decision in 2003, V Secret operated over 750 Victoria's Secret stores, two of which were in Louisville.³ In 1998, the year this action was filed, V Secret spent over $55 million in advertising the Victoria's Secret brand, described by V Secret as "moderately priced, high quality, attractively designed lingerie sold in a store setting designed to look like a wom[a]n's bedroom." V Secret distributed 400 million copies of the Victoria's Secret catalogue, or which 39,000 were distributed in Elizabethtown. In 1998 their sales exceeded $1.5 billion.

Counsel for V Secret wrote to the Moseleys requesting immediate discontinuance of the use of the name "Victor's Secret" and any variations thereof as the name was likely to cause confusion with the VICTORIA'S SECRET mark and was likely to dilute the distinctiveness of the mark. The Moseleys changed the name of the store to "Victor's Little Secret," a change which was unsatisfactory to V Secret which promptly filed suit.

The action alleged trademark infringement, unfair competition, dilution under the Federal Trademark Dilution Act ("FTDA"), common law trademark infringement and unfair competition. V Secret sought injunctive relief and damages in connection with these claims. After the close of discovery, the parties filed cross-motions for summary judgment. This court granted summary judgment in favor of the Moseleys on all claims except the FTDA Claim.

The court granted summary judgment in favor of V Secret on the FTDA claim finding that the marks were substantially similar for purposes of the dilution claim and that the Moseleys' marks had a tarnishing effect upon the VICTORIA'S SECRET mark. The court noted that "[included in the inventory sold by the Moseleys, in addition to lingerie, are adult videos as well as sex toys and other `adult novelties.'<sup>4</sup> `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)." February 9, 2000 Memorandum Opinion, p. 9 (DN 38). The court ordered the Moseleys to refrain from using the "Victor's Secret" and "Victor's Little Secret" marks.

The Moseleys appealed the decision on the FTDA claim to the United States Court of Appeals for the Sixth Circuit. The Sixth Circuit amplified this court's ruling on the claim, applying the newly announced standard for determining dilution in Nabisco, Inc. v. PF Brands, Inc., 191 F.3d 208 (2d Cir.1999) and affirmed. In its decision the Court of Appeals discussed two additional issues not addressed by this court. The court considered whether the mark was distinctive, and whether relief could be granted before dilution had actually occurred. The court held that the VICTORIA'S SECRET mark was distinctive and that actual dilution need not have occurred. In light of a split of authority on the question of actual dilution, the Moseleys sought and the United States Supreme Court granted certiorari to consider this issue.

On March 4, 2003, the Supreme Court held that actual dilution was required under the FTDA and reversed the judgment of the Court of Appeals, remanding the case for further proceedings consistent with the opinion. The Supreme Court entered its mandate on April 3, 2003, ordered costs to the Moseleys in the amount of $7,066.85, and sent the matter back to the Sixth Circuit. On April 9, 2003, the Moseleys filed a motion in the Court of Appeals to vacate the injunction. V Secret filed a response on April 25, 2003. The case sat pending thereafter in the Sixth Circuit for over four years without action. On July 26, 2007, the Sixth Circuit remanded the case to this court for further proceedings, stating that "[t]he decision of [the Sixth Circuit] having been reversed by the United States Supreme Court and the case having been remanded for further proceedings, the Court further remands this case to the district court for further proceedings consistent with the Supreme Court's decision in Moseley d/b/a Victor's Little Secret v. V Secret Catalogue, Inc., 537 U.S. 418, 123 S.Ct. 1115, 155 L.Ed.2d 1 (2003)." July 26, 2007 Order (DN 49). The court scheduled a pretrial conference for August 23, 2007. The mandate was received from the Court of Appeals on September 26, 2007.

II. Enactment of the Trademark Dilution Revision Act

Between the time of the Supreme Court's remand to the Sixth Circuit in 2003 and the Sixth Circuit's remand to this court four years later, the United States Congress enacted the Trademark Dilution Revision Act of 2006 ("TDRA"), Pub.L.No. 109-312, 120 Stat. 1730 (2006)(codified at 15 U.S.C. § 1125(c)), effective October 6, 2006.⁵ Of import in this case is that the TDRA eliminated the requirement of actual dilution enunciated by the Supreme Court in the 2003 Moseley decision.⁶

The TDRA provides:

Subject to the principles of equity, the owner of a famous mark that is distinctive, inherently or through acquired distinctiveness, shall be entitled to an injunction against another person who, at any time after the owner's mark has become famous, commences use of a mark or trade name in commerce that is likely to cause dilution by blurring or dilution by tarnishment of the famous mark, regardless of the presence or absence of actual or likely confusion, of competition, or of actual economic injury.

15 U.S.C. § 1125(c)(1).

In light of this provision, we are faced with an order of the Court of Appeals remanding the case to us to apply law which has been superseded. The Sixth Circuit has held that the law of the case doctrine is inapplicable where a subsequent contrary view of the law by controlling authority occurs. United States v. Moored, 38 F.3d 1419, 1421 (6th cir.1994). We find that the Moseley "actual dilution" standard is thus no longer the law of the case.

The Moseleys contend that the case at bar is distinguishable from the cited cases addressing changes in the law inasmuch as this case had already gone up to the Supreme Court and had been remanded to the Court of Appeals before the new statutory enactment. They urge this court to draw a distinction between cases on their way up the appellate ladder from cases on their way down to the trial court. They cite no authority for drawing such a distinction and we find no logical reason to do so. While the Moseleys complain that they lost the benefit of their success on appeal, the same could be said of a case ascending through the appellate process which is thwarted by superseding legislation. In either case, a change in the law would potentially alter the landscape of the appeal.

III. Retroactivity

Retroactivity is the next issue which the court must address. Pertinent to this determination, the parties stipulated in October, 2007 to V Secret's withdrawal of all claims for monetary relief. The effective date of the new provisions was October 6, 2006. The TDRA does not explicitly state that the Act is to be applied retroactively. The Moseleys therefore urge that dilution claims pending prior to the effective date are governed by the FTDA rather than the new law, as retroactive application is generally disfavored in the law.

The TDRA applies to the dilution claim herein however, as V Secret seeks only prospective injunctive relief. As stated in American Steel Foundries v. Tri-City Central Trades, 257 U.S. 184, 201, 42 S.Ct. 72, 66 L.Ed. 189 (1921), "relief by injunction operates in futuro and the right to it must be determined as of the time of the hearing." See, Louis Vuitton Malletier v. Haute Diggity Dog, LLC, 464 F.Supp.2d 495 (E.D.Va.2006), affm'd, 507 F.3d 252 (4th Cir.2007)(citing, Landgraf v. USI Film Products, 511 U.S. 244, 114 S.Ct. 1483, 128 L.Ed.2d 229 (1994); applying TDRA to claim for injunctive relief); Louis Vuitton Malletier v. Dooney & Bourke, 500 F.Supp.2d 276, 282, n. 31 (S.D.N.Y.2007)(applying TDRA to claim for injunctive relief); Starbucks Corporation v. Wolfe's Borough Coffee, Inc., 477 F.3d 765 (2d Cir.2007)(citing, Havana Club Holding, S.A. v. Galleon, S.A., 203 F.3d 116, 129 (2d Cir.2000; applying TDRA to claim for injunctive relief)); Verilux, Inc. v. Hahn, 2007 WL 2318819 (D.Conn. Aug.10, 2007); Dan-Foam AJS v. Brand Named Beds, LLC, 500 F.Supp.2d 296 (S.D.N.Y.2007)...