Corporate America should have paid attention to a "little secret" other than Victor's -- sometimes statutory language really matters. The Not So Little Secret of Statutory Language

The U.S. Supreme Court taught the owners of well-known trademarks the basics of legal reading and writing last week. (Make that "statutory construction and drafting" for all the licensed attorneys out there.)

In Moseley v. V Secret Catalogue, Inc. (No. 01-1015), the U.S. Supreme Court unanimously held that, intent aside, the precise language of the Federal Trademark Dilution Act requires a trademark owner prove actual harm to its mark in order to maintain a lawsuit against imitators and copycats. As a result, the High Court ruled that lingerie giant Victoria's Secret needed to show some adverse impact on its trademark to successfully assert a federal trademark dilution claim against the husband and wife owners of "Victor's Little Secret," a similarly though masculine-named adult boutique in Elizabethtown, Ky.

"The mere fact that consumers mentally associate" a mom-and-pop novelty shop with the "famous trademark" of the lingerie maker and retailer "is not sufficient to establish" an actionable claim, according to the decision. Instead, the Federal Trademark Dilution Act provides that "'the owner of a famous mark' is entitled to ... relief against another person's commercial use of a mark or trade name [only] if that use 'causes dilution of the distinctive quality' of the famous mark."

The "causes dilution" language was important, according to the Court, because such "text unambiguously requires a showing of actual dilution, rather than a likelihood of dilution."

The decision came as a huge disappointment to the owners of well-known trademarks -- namely, corporate America -- because they designed and championed the Federal Trademark Dilution Act as a means to protect their highly-valued brand names and catch phrases. But the result, and the reasons for it, shouldn't have come as any surprise, especially to the very people behind the statute's enactment.

After all, the Supreme Court did its job just as any careful drafter would have wanted -- it reached a unanimous decision by paying close attention to the actual text of the law. The decision was really quite simple. There was no need to divine the intention of Congress or provide judicially-created definitions for ambiguous terms. Instead, the nine justices simply read the law and interpreted its plain language.

Of course, the well-funded, politically-connected, and legally-counseled interests of corporate America could have written the law differently, and, as the decision demonstrated, they should have.

In fact, the forces behind increasing protection for well-known trademarks really faced no opposition eight years ago. The statute "passed the House unanimously" and passed the Senate "by voice vote without any hearings." In addition, as the Court pointed out, several state laws would have been good examples to follow because they explicitly granted broad trademark protection by repeatedly referring to remedies available even when there is only "a 'likelihood' of harm, rather than ... [the] completed harm" required by the federal "causes dilution" language. Surely, the trademark owners wish they had copied those state law examples now.

Thus, the CEOs -- and their lobbyists and lawyers -- have no one to blame but themselves for their loss in the highest court in the land. They failed by forgetting to observe the first among all legal rules: Carefully read what you are signing. (Or in this case, carefully read what you are asking Congress to enact into law.)

Corporate America should have paid attention to a "little secret" other than Victor's -- sometimes statutory language really matters.

March 3, 2003
[About CFIF]  [Freedom Line]  [Legal Issues]  [Legislative Issues]  [We The People]  [Donate]  [Home]  [Search]  [Site Map]
2000 Center For Individual Freedom, All Rights Reserved. CFIF Privacy Statement
Designed by Wordmarque Design Associates
Legal Issues News Protection for individual freedom provided by the rule of law news Educating the public through legal commentary news Latest legal issues affecting individual freedoms news Official legal websites news Supreme Court Docket Summary By Thomas Goldstein news Humorous court case news