Trademark
Aden Allen
February 21, 2006
Moseley v. Victoria Secret Catalogue, Inc., 537 U.S. 418, 123 S.Ct. 1115, 155
L.Ed.2d 1 (2003)
Supreme Court Holds Actual Dilution Must Be Shown
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Neither the absence of any likelihood of confusion nor the absence of competition, however,
provides a defense to the statutory dilution claim alleged in count 3 of the complaint.
In 1988, when Congress adopted amendments to the Lanham Act, it gave consideration to an
anti-dilution provision, but did not incorporate one in the act.
State statutes expressly refer to both "injury to business reputation" and to "dilution of the
distinctive quality of a trade name or trademark,“
Federal statute refers only to the "dilution of the distinctive quality of a trade name or trademark”,
arguably supports a narrower reading of the FTDA.
State statutes, like several provisions in the federal Lanham Act, repeatedly refer to a "likelihood"
of harm, rather than to a completed harm. The relevant text of the FTDA, provides that "the owner
of a famous mark" is entitled to injunctive relief against another person's commercial use of a
mark or trade name if that use "causes dilution of the distinctive quality" of the famous mark. 15
U.S.C. § 1125(c)(1) (emphasis added). This text unambiguously requires a showing of actual
dilution, rather than a likelihood of dilution.
"The term 'dilution' means the lessening of the capacity of a famous mark to identify and
distinguish goods or services, regardless of the presence or absence of-- "(1) competition
between the owner of the famous mark and other parties, or "(2) likelihood of confusion, mistake,
or deception." § 1127.
The contrast between the initial reference to an actual "lessening of the capacity" of the mark, and
the later reference to a "likelihood of confusion, mistake, or deception" in the second caveat
confirms the conclusion that actual dilution must be established.
Conclusion that Actual Dilution must be shown does not mean that the consequences of dilution,
such as an actual loss of sales or profits, must also be proved.
Where the marks at issue are not identical, the mere fact that consumers mentally associate the
junior user's mark with a famous mark is not sufficient to establish actionable dilution.
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Blurring is not necessary consequence of mental association.
Supreme Court Discusses Mental Association Yet No Evidence Showing
Lessening of the Capacity
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The record in this case establishes that an army officer who saw the advertisement of the opening
of a store named "Victor's Secret" did make the mental association with "Victoria's Secret," but it
also shows that he did not therefore form any different impression of the store that his wife and
daughter had patronized. There is a complete absence of evidence of any lessening of the
capacity of the VICTORIA'S SECRET mark to identify and distinguish goods or services sold in
Victoria's Secret stores or advertised in its catalogs. The officer was offended by the ad, but it did
not change his conception of Victoria's Secret. His offense was directed entirely at petitioners, not
at respondents. Moreover, the expert retained by respondents had nothing to say about the impact
of petitioners' name on the strength of respondents' mark.
Noting that consumer surveys and other means of demonstrating actual dilution are expensive
and often unreliable, respondents and their amici argue that evidence of an actual "lessening of
the capacity of a famous mark to identify and distinguish goods or services," § 1127, may be
difficult to obtain. It may well be, however, that direct evidence of dilution such as consumer
surveys will not be necessary if actual dilution can reliably be proved through circumstantial
evidence--the obvious case is one where the junior and senior marks are identical. Whatever
difficulties of proof may be entailed, they are not an acceptable reason for dispensing with proof of
an essential element of a statutory violation. The evidence in the present record is not sufficient to
support the summary judgment on the dilution count.
The judgment is therefore reversed, and the case is remanded for further proceedings consistent
with this opinion.
J. Kennedy, Concurring: “[C]apacity" imports into the dilution inquiry both the present and the
potential power of the famous mark to identify and distinguish goods, and in some cases the fact
that this power will be diminished could suffice to show dilution. Capacity is defined as "the power
or ability to hold, receive, or accommodate." Webster's Third New International Dictionary 330
(1961);
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If a mark will erode or lessen the power of the famous mark to give customers the assurance of quality and
the full satisfaction they have in knowing they have purchased goods bearing the famous mark, the elements
of dilution may be established.
How Could You Show Lessening of the Capacity of the Victoria’s Secret
Trademark?
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Survey
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Three groups
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People who normally buy lingerie or know of Victoria’s Secret but have never heard of Victor’s Little Secret
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Survey people around Victor’s Little Secret and ask if they ever mentally associated the store with Victoria’s Secret
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Ask them if they believe the name Victor’s Little Secret could be related to Victoria’s Secret?
If they answer Yes, Tell some that they were “right” and what Victor’s Little Secret sells.
» A: Ask them if knowing that Victor’s Little Secret sells adult toys affects how they would perceive Victoria’s Secret?
» B: Tell the others that answered Yes that they were wrong, but ask them the same thing.
If they answer No, Tell some that they were “wrong” and also what Victor’s Little Secret sells.
» C: Ask them if knowing that Victor’s Little Secret sells adult toys affects how they would perceive Victoria’s Secret?
» D: Tell the others that answered No that they were right, but ask them the same thing.
Analyzing Results:
» What percentage made a mental association?
» Compare A and C to determine if people are influenced with what they thought first.
Did they believe Victor’s was not affiliated with Victoria’s Secret?
If they knew of Victor’s Little Secret and believed they were affiliated, would this change their buying from Victoria’s Secret?
If they knew of Victor’s Little Secret and did not believe that they were affiliated, would this change their buying from Victoria’s
Secret?
Control Group for mental association - people who do not buy lingerie nor heard of Victoria’s Secret (if applicable since
uncontested that Victoria’s Secret was a famous name)
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Present them both with names Victor’s Little Secret and Victoria’s Secret and ask if they would associate Victor’s with Victoria’s
Secret.
This test would only control for the mental association, however would fail to show that there was any lessening of capacity of
the VS trademark.
• Indianapolis Colts, Inc. v. Metropolitan
Baltimore Football Club Ltd. Partnership.,
34 F.3d 410, 63 USLW 2126, 31
U.S.P.Q.2d 1811, 7th Cir.(Ind.), Aug 12,
1994
District Court’s Ruling 31 USPQ2d 1801
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The plaintiffs assert that
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"Baltimore CFL Colts" for his CFL franchise causes a likelihood of confusion with the marks Indianapolis Colts and Colts in the
mind of reasonably prudent consumers so that a purchaser of memorabilia or a television viewer is likely to be confused as to
source or sponsorship or both.
Confusion will result in a loss of control by them of the quality of product identified with them by a confused consumer and with the
loss of control of their reputation.
Lose fans and profit as a result of this confusion.
Defendants disagree, urging the court that plaintiffs have not met their burden of showing at the hearing that
reasonably prudent consumers will be confused by these marks.
A trademark performs essentially four functions. Those functions set out in MCCARTHY ON TRADEMARKS
Section 3.01 [2] are as follows:
(1) to identify one seller's goods and distinguish them from goods sold by others;
(2) to signify that all goods bearing the trademark come from or are controlled by a single, albeit anonymous
source;
(3) to signify that all goods bearing the trademark are of an equal level of quality; and
(4) as a prime instrument in advertising and selling the goods.
A trademark is also a symbol of the good will that a business has built up over the years in which it has been
operating.
When a mark is abandoned, it returns to the public domain, and is appropriable anew--in principle. In practice,
because "subsequent use of [an] abandoned mark may *413 well evoke a continuing association with the prior
use, those who make subsequent use may be required to take reasonable precautions to prevent confusion." 2
McCarthy, supra, § 17.01[2], at p. 17-3.
The law in this circuit is that "if one word or feature of a composite trademark is the salient portion of the mark, it
may be given greater weight than its surrounding elements."International Kennel Club, 846 F.2d at 1088 (citing
Henri's Food Products Co. v. Kraft, Inc., 717 F.2d 352, 356 [ 220 USPQ 386 ] (7th Cir. 1983)). The survey indeed
revealed that the confusion arose from the dominant nature of the word "Colts."
In the balance of hardships in this matter, I find that a narrowing of the scope of a preliminary injunction will both
recognize the importance of trademark law, the violation of which harms the plaintiffs and the public, and the
financial burden on the defendants. The tickets which have already been printed by defendants or any associated
CFL team are exempted from this injunction. The various CFL publications listed in the declaration of Michael
Murray (attached to this order) are also exempted with the exception of the letterhead for preparing game day
statistics. The programs printed prior to today's date by the affiliated teams of the CFL are exempted. These
exemptions are made in light of the interests of third parties
Plaintiff’s Survey
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Plaintiffs have commissioned a consumer study which they argue establishes the likelihood of prevailing on the
merits. The issues dealt with by the study were: "What is the public perception arising from the adoption and use
of the name BALTIMORE COLTS and BALTIMORE CFL COLTS by the new CFL franchise team playing
professional football games, and more specifically whether the use of the name BALTIMORE CFL COLTS for the
new team is likely to cause public confusion that authorization or sponsorship had been received by the new CFL
franchise from the NFL, the Colts or their licensing representative NFLP? A related issue was whether the sale of
merchandise with the name 'Baltimore CFL Colts' thereon is likely to cause public confusion that such
merchandise was sponsored or authorized by the NFL, COLTS, or NFLP?" Plaintiffs' experts' commission. The
universe to be tested in the study was the general population of the United States. Representative samples of
merchandise currently on sale were selected. The test shirts were three different shirts, one with the name
"BALTIMORE CFL COLTS" dominant, one with CFL football helmet dominant and one with the stylized horse head
dominant. These items were taken to various consumer malls around the U.S. including Baltimore, Indianapolis,
and in other regions where both NFL and CFL teams play.
The test was administered by trained questioners to 738 individuals in 24 locations. About half the interviewees
were shown shirts currently being sold bearing the name "Baltimore CFL Colts" in the manner above described,
and half were shown identical merchandise except the word "Horses" had been substituted for the word "Colts" in
the same place where "Colts" had appeared before. A comparison was made to determine the impact from the use
of the word "Colts" by the defendants on the potential consumer.
The results of the questionnaire divided respondents into different categories for analysis. Again, some 364 saw
shirts with "BALTIMORE CFL Colts" on them and 362 saw shirts with "Baltimore CFL Horses" on them. The
subgroups provided by the answers were as follows: (1.) Football fans (428); (2.) People who watch football on TV
(568); (3.) People who watch football on cable TV (382); (4.) People who have hats or shirts with a team or logo on
it (603); (5.) People who consider themselves "very likely" to buy merchandise with a team name or logo on it
(350); and (6.) People who are football fans, watch football on cable TV, and are very likely to buy merchandise
with a team name or logo on it (192). The test was for confusion as to manufacturer's authorization, that is from
whom did the manufacturer have to get permission to make the merchandise with the team name or logo
attached, and as to name, that is what team's merchandise is the consumer buying.
The conclusion drawn by the author of the survey was that of those who looked at the merchandise with the name
"Baltimore CFL Colts" on it some 50% are likely to be confused that this name either refers to the Indianapolis
Colts or to an NFL team. In the category of those who are football fans, watch football games on cable TV and
who are very likely to buy merchandise bearing the name or logo of a team, the percentage of name confusion
was a bit greater. One out of five people (THIS IS ONLY 20%) surveyed were confused as to whether the CFL had
to have the permission of the NFL to use the "Baltimore CFL Colts" name. These results are the primary
foundation of plaintiffs' position that they have met their burden of showing a likelihood of success on the issue of
confusion under trademark law.
Defendant’s Survey
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First study of 120 people in 20 cities showed that 90% of those interviewed said that they only
purchased hats and shirts representing the teams that they supported. From this he argued that
the relevant universe was Indianapolis Colts fans and Baltimore CFL Colts fans.
Second study. He went to Baltimore to test the level of knowledge of the public of the two teams.
He found that only five of the 101 people he interviewed were confused about the two teams.
From this he concluded that in the proper universe, Baltimore, there is no meaningful likelihood of
confusion.
Defendants' expert did not present actual merchandise to Baltimore fans (his universe) or to any
other fans. He determined that the citizens of Baltimore can distinguish between the Indianapolis
Colts and the Baltimore CFL Colts. He urged this Court to draw that inference from this and other
evidence presented at the hearing. The many newspaper articles and declarations setting out the
general sentiment of Baltimoreans toward the current ownership of the Indianapolis Colts could
lead this Court reasonably to conclude that Baltimoreans could tell the difference between the two
teams. That reasonable inference must be stretched to arrive at the next necessary step in this
case, however. That step, sought by defendants, is that these consumers will be very careful and
will not be confused when buying merchandise. This inference was directly countered by plaintiffs'
expert. Plaintiffs' expert found a 39% rate of overall confusion in Baltimore.
Critiques of the Surveys and District Court’s Response
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Defendants' expert's initial criticism of plaintiffs' expert is that the universe tested is too large.
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To say that every person who is over 14 years old is a potential buyer of defendants' hats and shirts is
"contrary to my experience and understanding of the reasons for endorsements (placing a team name on an
item is a form of endorsement), and is certainly not supported by any data in [plaintiffs' expert's] study.“
Insisted that the only appropriate universe consists of individuals who are 18 or older, and who are fans of
the Indianapolis Colts or the Baltimore CFL Colts. His first study of 120 people in 20 cities showed that 90%
of those interviewed said that they only purchased hats and shirts representing the teams that they
supported. From this he argued that the relevant universe was Indianapolis Colts fans and Baltimore CFL
Colts fans.
Expert was also critical of the individual judgments of confusion regarding some individual survey
results. Underlying defendants' expert's opinion is the inference that a Baltimore fan will know his
or her team logo when he or she sees it. Plaintiffs' expert found to the contrary. Plaintiffs' expert's
explanation for this surprising phenomenon is appealing. He explained the way in which the
human brain stores and retrieves memory, pointing to articles on cognitive networks and
spreading activation. Most people can probably recall a time when a return trip to the store was
necessary because a word on a label triggered a memory that filled in the rest of the label, and
caused them to select the wrong product. One's intention may be clear and still the wrong product
is purchased.
The purpose of a consumer survey is to determine whether consumers will be confused, not to
determine the intent of the purchaser. Plaintiffs' expert has determined that a likelihood of
confusion exists between the names Indianapolis Colts, Colts and Baltimore CFL Colts.
Defendants' expert has determined that Baltimore CFL Colts fans want Baltimore CFL Colts
merchandise. The plaintiffs' expert shows that confusion transcends intent. There is more to the
results of plaintiffs' survey than a reminder that consumers do not read carefully.
Defendants' expert further opined that the business of consumer surveys is sociology, not
psychology as offered by the plaintiff's expert. This difference may help explain why two so
eminent scholars could be so far apart in their conclusions. Defendants' expert does not
acknowledge the studies by psychologists of cognitive networking and spreading activation which
are so helpful in explaining why we as consumers and readers sometimes unintentionally misread
labels and directions.
Indianapolis Colts, Inc. v. Metropolitan Baltimore Football Club Ltd.
Partnership., 34 F.3d 410, 7th Cir.(Ind.), Aug 12, 1994
7th Circuit Holds
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Defendants' study prepared by Michael Rappeport was given little weight by district court. That
was a kindness. The heart of Rappeport's study was a survey that consisted of three loaded
questions asked in one Baltimore mall.
The plaintiffs' study, conducted by Jacob Jacoby, was far more substantial and the district judge
found it on the whole credible. The report has all the trappings of social scientific rigor.
Interviewers showed several hundred consumers in 24 malls scattered around the country, shirts
and hats licensed by the defendants for sale to consumers. The shirts and hats have "Baltimore
CFL Colts" stamped on them. The consumers were asked whether they were football fans,
whether they watched football games on television, and whether they ever bought merchandise
with a team name on it. Then they were asked, with reference to the "Baltimore CFL Colts"
merchandise that they were shown, such questions as whether they knew what sport the team
played, what teams it played against, what league the team was in, and whether the team or
league needed someone's permission to use this name, and if so whose. If, for example, the
respondent answered that the team had to get permission from the Canadian Football League, the
interviewer was directed to ask the respondent whether the Canadian Football League had in turn
to get permission from someone. There were other questions, none however obviously loaded,
and a whole other survey, the purpose of which was to control for "noise," in which another group
of mallgoers was asked the identical questions about a hypothetical team unappetizingly named
the "Baltimore Horses." The idea was by comparing the answers of the two groups to see whether
the source of confusion was the name "Baltimore Colts" or just the name "Baltimore," in which
event the injunction would do no good since no one suggests that the new Baltimore team should
be forbidden to use "Baltimore" in its name, provided the name does not also include "Colts."
Not improper for Jacoby to inquire about confusion between "Baltimore CFL Colts" and "Baltimore
Colts," even though the Indianapolis Colts have abandoned "Baltimore Colts." If consumers
believe that the new Baltimore team is the old Baltimore Colts, and the Indianapolis Colts some
sort of upstart (the Johnny Unitas position), they will be less likely to buy merchandise stamped
"Indianapolis Colts." But Rappeport was right to complain that the choice of "Horses" for the
comparison team loaded the dice and that some of Jacoby's questions were a bit slanted. That is
only to say, however, that Jacoby's survey was not perfect, and this is not news. Trials would be
very short if only perfect evidence were admissible.
Indianapolis Colts, Inc. v. Metropolitan Baltimore Football Club Ltd.
Partnership., 34 F.3d 410, 7th Cir.(Ind.), Aug 12, 1994
7th Circuit Holds
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Jacoby's survey of consumers' reactions to the "Baltimore CFL Colts" merchandise found rather
astonishing levels of confusion not plausibly attributable to the presence of the name "Baltimore"
alone, since "Baltimore Horses" engendered much less. (We don't like the name "Baltimore
Horses," as we have said; but we doubt that a more attractive "Baltimore" name, the "Baltimore
Leopards," for example, would have generated the level of confusion that "Baltimore CFL Colts"
did.
Self-identified football fans, 64 percent thought that the "Baltimore CFL Colts" was either the old
(NFL) Baltimore Colts or the Indianapolis Colts. But perhaps this result is not so astonishing.
Although most American football fans have heard of Canadian football, many probably are
unfamiliar with the acronym "CFL," and as we remarked earlier it is not a very conspicuous part of
the team logo stamped on the merchandise.
Among fans who watch football on television, 59 percent displayed the same confusion; and even
among those who watch football on cable television, which attracts a more educated audience on
average and actually carries CFL games, 58 percent were confused when shown the
merchandise.
Among the minority not confused about who the "Baltimore CFL Colts" are, a substantial minority,
ranging from 21 to 34 percent depending on the precise subsample, thought the team somehow
sponsored or authorized by the Indianapolis Colts or the National Football League. It is
unfortunate and perhaps a bit tricky that the subsample of consumers likely to buy merchandise
with a team name on it was not limited to consumers likely to buy merchandise with a football
team's name on it; the choice of the name "Baltimore Horses" for the comparison team was
unfortunate; and no doubt there are other tricks of the survey researcher's black arts that we have
missed. There is the more fundamental problem, one common to almost all consumer survey
research, that people are more careful when they are laying out their money than when they are
answering questions.
But with all this granted, we cannot say that the district judge committed a clear error in crediting
the major findings of the Jacoby study and inferring from it and the other evidence in the record
that the defendants' use of the name "Baltimore CFL Colts" whether for the team or on
merchandise was likely to confuse a substantial number of consumers. This means--given the
defendants' failure to raise any issue concerning the respective irreparable harms from granting or
denying the preliminary injunction--that the judge's finding concerning likelihood of confusion
required that the injunction issue.
Experimental Design and the Selection of Controls in Trademark and Deceptive
Advertising Surveys©, p. 45-49, Jacob Jacoby, Ph.D., Prepared for The
Trademark Reporter
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Prior to its first scheduled game, merchandise bearing these names was available for purchase at retail outlets in
and around Baltimore. This merchandise included three different versions of a tee-shirt and one baseball type
cap. These items used a similar shade of blue to that of the NFL’s “Colts,” said either “Baltimore Colts” or
“Baltimore CFL Colts” and, as a logo, contained a stylized horse’s head.
From a scientific perspective, the cleanest and most defensible control involved deleting the single allegedly
infringing element (the term “Colts”), replacing it with an equivalent term compatible with the horse head logo,
leaving everything else intact.
Subtracting the noise level obtained with the Control shirts from the corresponding level found with tee-shirts
containing the allegedly confusing “Colts” term would yield a fair estimate of likely confusion arising from the use of
“Colts” in this context. Net effect due to the putative cause = [level of effect found in the test group] minus [level of
effect found with the control group].
Federal Judicial Center’s Reference Manual on Scientific Evidence. “In designing a control group study, the expert
should select a stimulus for the control group that shares as many characteristics with the control group as
possible, with the key exception of the characteristic whose influence is being assessed.
To determine whether the name “Colts” (and nothing else) was responsible for causing confusion in this context,
tight scientific assessment required that it be the only element replaced, i.e., that the horse head logo continue to
appear on the control garments. (Former Baltimore Colts logo was a horse shoe.)
Possible Improvements in the Survey/Analysis
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More weight should have been given to Defendant’s critique of the choice of universe.
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Other than that, and the criticisms from the 7th Circuit, I think Jacoby’s study is very thorough and compelling.
Possibly study whether people check for the NFL licensing logo on merchandise items before they buy.
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Does is not matter who is confused?