Federal Trademark Dilution Act Case Study

Certiorari was granted to resolve “the question of whether the objective evidence of actual damage to the economic value of a famous mark rather than a presumption of damage from subjective probability standard of dilution is required for relief under the act.” Federal Trademark Dilution Act entails the factors that determine whether a mark is distinctive and famous. The act defines “dilution” as the “lessening of the capacity of a famous mark to identify and distinguish goods or services.” The FTDA answers that question, and the answer is no. This requirement was not included in the act. (LexisNexis)
The action was taken to court based on the use of the petitioner’s name “Victor’s Little Secret” in a store that handles tasteless merchandise was likely to blur and gradually destroy the distinctiveness of the Respondent’s mark, as

Certiorari was granted to resolve the conflict. From the court’s examination of the law, they found that proof of actual dilution is required not only a risk of dilution. Evidence needs to be provided that proves “lessening of the capacity of the mark to identify and distinguish goods or services.” It does not mean that the plaintiff must prove actual loss on profits, but the facts from the Utah case demonstrate, just because consumers mentally associate a mark with another does not necessarily prove that there was a reduction in the capacity of a famous mark to identify the goods of its owner. There is no evidence in record of actual harm to Victoria’s Secret mark. The judgment of the Court of Appeal was reversed and the case was remanded for further proceedings. Judges Rehnquist, Stevens, O’Connor, Scalia, Kennedy, Souter, Thomas, Ginsburg, and Breyer delivered the opinion. Justice Kennedy filed a concurring opinion.