United States District Court, S.D. New York
January 10, 2006.
RONIT MENASHE and AUDREY QUOCK, Plaintiffs,
V SECRET CATALOGUE, INC., VICTORIA'S SECRET STORES, INC., INTIMATE BEAUTY CORPORATION d/b/a VICTORIA'S SECRET BEAUTY, and VICTORIA'S SECRET DIRECT, LLC, Defendants.
The opinion of the court was delivered by: HAROLD BAER JR., District Judge
OPINION, ORDER, & JUDGMENT
On January 11, 2005, Ronit Menashe ("Menashe") and Audrey Quock
("Quock") (together "Plaintiffs"), filed this declaratory
judgment action for non-infringement of the trademark "SEXY
LITTLE THINGS" (the "Mark") under the Lanham Act,
15 U.S.C. § 1051 et. seq., and at common law against Defendants V Secret
Catalogue, Inc., Victoria's Secret Stores, Inc., Intimate Beauty
Corporation, and Victoria's Secret Direct, LLC (collectively
"Victoria's Secret"). Plaintiffs also sought a declaratory
judgment of non-cybersquatting under the Anticybersquatting
Consumer Protection Act ("ACPA"), 15 U.S.C. § 1125(d), a judgment
of tortious/fraudulent misrepresentation, punitive damages, and
reasonable attorney's fees.
On July 7, 2005, this Court denied Victoria's Secret's motion
to dismiss the Complaint pursuant to Rule 12(b)(1) and 12(b)(6)
of the Federal Rules of Civil Procedure, or in the alternative
for summary judgment. Menashe v. V Secret Catalogue, Inc., No.
05 Civ. 239, 2005 WL 1580799 (S.D.N.Y. July 7, 2005). Trial was
held on December 13-14, 2005.
II. FINDINGS OF FACT
A. Plaintiffs' Adoption of the Mark
On or about June 1, 2004, Menashe, a publicist, and Quock, a
fashion model and actress, embarked on a joint business venture
to produce and launch a line of women's underwear. Trial
Declaration of Ronit Menashe ("Menashe Decl.") (undated) ¶¶ 4, 6;
Trial Declaration of Audrey Quock ("Quock Decl.") (undated) ¶¶ 3, 5. Sometime in July 2004,
they decided to name their line "SEXY LITTLE THINGS." Menashe
Decl. ¶ 7; Quock Decl. ¶ 11. Also in July 2004, Quock purchased
400 sample pieces of plain stock underwear from a manufacturer in
China and in late July or early August 2004, heat pressed her
designs consisting of words and logos onto the stock underwear.
Quock Decl. ¶¶ 7, 13. She also heat pressed the Mark onto the
back of the underwear where a label would normally be attached.
In late July or early August 2004, Menashe and Quock came up
with the phrase "SEXY LITTLE THING, SEXY LITTLE THINGS," a
variation of their chosen name that they believed yielded many
creative possibilities for design and advertising. Menashe Decl.
¶ 8; Quock Decl. ¶ 12. On August 31, 2004, Quock registered the
domain name www.sexylittlethings.com in preparation for
building a website to sell the underwear line over the Internet.
Quock Decl. ¶ 18. Subsequently, on September 13, 2004, after
searching the website of the United States Patent and Trademark
Office ("USPTO") and finding that the Mark was available, Menashe
and Quock filed an intent-to-use ("ITU") application with the
USPTO for "SEXY LITTLE THING, SEXY LITTLE THINGS" for lingerie.
Menashe Decl. ¶ 9-10; Quock Decl. ¶ 20. About ten days later,
Quock hired a website designer to create the
www.sexylittlethings.com site. Quock Decl. ¶ 21.
By early September 2004, Quock initiated negotiations with her
manufacturer in China to silkscreen print her designs on bulk
shipments of underwear. Id. ¶ 24. In October 2004, she sent the
manufacturer eight designs to make prototype prints, and started
negotiations for an order of 6,000 pieces of underwear. Id. ¶
24, 26. The manufacturer sent Quock the eight prototypes on
November 13, 2004. Id. ¶ 28. By then, she had also sent the
manufacturer diagrams for the production of labels carrying the
mark "SEXY LITTLE THINGS." Id.
Meanwhile, Plaintiffs had also set about publicizing their
line. Sometime in September or October 2004, Quock did an
interview with www.ediets.com, and an article that mentioned the
name of Plaintiffs' line and the www.sexylittlethings.com
website appeared online at the ediets.com website in the week of
November 19, 2004. Id. ¶ 34. On August 19, 2004, Quock did a
photo shoot for Stuff Magazine in which she modeled a pair of
"SEXY LITTLE THINGS" underwear. Id. ¶ 31. The photographs were
published in Stuff Magazine in March of 2005 with an accompanying
article that featured Quock's venture into women's lingerie, but
did not mention the name of the line. Id. ¶¶ 32, 47. In late
September or early October 2004, Quock did an interview with
Beyond Fitness magazine in which she promoted her underwear line,
but was unaware whether the article was ever published. Id. ¶ 38;
12/13/2005 Trial Transcript ("Tr.") at 48-49. In mid-November,
she flew to Milan for a photo shoot featuring "SEXY LITTLE
THINGS" underwear. Quock Decl. ¶ 40. The photographs were never
published. Tr. at 51-53.
On October 14, 2004, Quock e-mailed Menashe an outline of a
business plan for the underwear line and indicated that they were
ready to seek buyers. Quock Decl. ¶ 37; 10/14/2004 e-mail from
Quock to Menashe, Plaintiffs Trial Exhibit ("Pls. Ex.") 14.
Sometime in November 2004, Quock contacted a friend who was a
buyer for Fred Segal stores about selling the underwear line in
boutiques in Los Angeles, California. Quock Decl. ¶ 39; Tr. at
44. As noted below, this effort too was never consummated.
On November 16, 2004, Menashe received a letter from Victoria's
Secret's outside counsel informing her that Victoria's Secret had
been using "SEXY LITTLE THINGS" as a trademark for lingerie since
prior to the filing date of Plaintiffs' ITU application. Menashe
Decl. ¶ 12; see 11/15/2004 Cease and Desist Letter, Ex. A to
03/14/2005 Am. Compl., at 1. The letter warned that "SEXY LITTLE
THING, SEXY LITTLE THINGS," the subject of Plaintiffs' ITU
application, was confusingly similar to Victoria's Secret's mark
and, if used, would constitute trademark infringement. See id.
at 2. Further, the letter demanded that Plaintiffs cease and
desist all plans to use "SEXY LITTLE THING, SEXY LITTLE THINGS,"
abandon their ITU application, and transfer the domain name
www.sexylittlethings.com to Victoria's Secret. See id.
Finally, the letter requested a response by November 19, 2004.
Victoria's Secret's letter caused Plaintiffs to halt production
of their underwear project, instruct Stuff Magazine not to
mention the name of their underwear line, discontinue other
publicity efforts, stop development of their website, and cease
their attempts to find retail outlets for their product. Quock
Decl. ¶¶ 44, 46, 50. Plaintiffs also ordered two trademark
investigations into Victoria's Secret's claims to the Mark. Id.
¶ 52. They were informed that no one had used the Mark prior to
the filing of their ITU application. Id. One investigation
reported that Victoria's Secret's Resort 2005 catalogue, which
had been sent with the cease and desist letter as proof of
Victoria's Secret's use of the Mark, was not mailed out until
December 28, 2004. Id. ¶ 53. At trial while it stretches
credulity Menashe testified that since the time she received
the cease and desist letter, she has not been in a Victoria's
Secret store or looked at a Victoria's Secret catalogue to see
whether Victoria's Secret was selling merchandise under the name
"SEXY LITTLE THINGS." Tr. at 64-65. Quock testified that she did
not visit a Victoria's Secret store nor look at a Victoria's Secret catalogue
until some time after receipt of the cease and desist letter,
when she walked into a Victoria's Secret store and saw a display
for "SEXY LITTLE THINGS." Tr. at 54-55.
B. Victoria's Secret's Adoption and Use of the Mark
As early as Fall 2002, Victoria's Secret began to develop the
concept and marketing for a panty collection. Tr. at 207.
Victoria's Secret's decision to expand its panty business stemmed
from a desire to capitalize on a major fashion trend that
appeared to herald "decorated bottoms" seen in the popularity
of low rise pants and the vogue among young women for wearing
lingerie style items as outerwear. Tr. at 206. Sometime between
March 30 and June 1, 2004, Victoria's Secret's marketing
department settled on the name "SEXY LITTLE THINGS" for its panty
collection. Tr. at 181, 185. The collection, characterized as
"fun, flirty, and playfully sexy," was designed to appeal to
women in their twenties and early thirties, and was comprised of
over eighty items that included panties, camisoles, and other
underwear. Tr. at 184, 196; Sexy Little Things Brand Strategy,
Defendants Trial Exhibit ("Defs. Ex.") K. Some of these items
were already being sold in Victoria Secret stores as general
merchandise prior to the introduction of the "SEXY LITTLE THINGS"
collection (the "Collection"), but the majority of the items were
placed in stores for the first time when the Collection was
rolled out in July 2004. Tr. at 186-87.
On or around July 28, 2004, the Collection was scheduled to
make its first appearance in five Victoria's Secret stores in
Ohio, Michigan, and California. 12/01/2005 Trial Declaration of
Pamela K. Rice, Director of Merchandising for Sexy Little Things
for Victoria's Secret Stores, Inc. ("Rice Decl.") ¶ 7. On that
date, the mark "SEXY LITTLE THINGS" was displayed with the
Collection in four of the five stores in the form of hangtags,
store signage, permanent fixtures, or in window exposures. Id.
¶ 8. For example, in one of the Ohio stores, denominated Easton
#1300, the Mark appeared as a large illuminated sign on a "focal
wall," a specially constructed vertical unit of nine
compartments, each compartment containing a plastic "buttock" on
which a pair of panties was displayed. See Defs. Ex. D, VS 732.
In that store, the Mark also appeared prominently on hangtags
attached to hangers that displayed panties, on labels adhered to
pull-out compartments of something called a "panty bar" a
horizontal case that displayed merchandise in each compartment
and with window displays of the same merchandise. Id., VS
728-29, 738, 745-46, 749-50. Further, on July 28, 2004, the
testimony recites that the "selling environments" for "SEXY LITTLE THINGS" merchandise, comprising
the various described displays, opened to consumers in the Ohio
roll-out stores. Rice Decl. ¶ 9; 11/30/2005 Trial Declaration of
Polly Jean Sinesi, Director of Prototype Design for Limited Store
Planning, Inc. ("Sinesi Decl.") ¶ 13.
The roll-out at the Briarwood, Michigan store was delayed owing
to technical difficulties related to signage. Tr. at 177-78.
Maria Thurston, a co-manager of the Briarwood store from October
2001 until November 27, 2004, testified that while construction
for a "panty boutique" was completed on July 28, 2004, no "SEXY
LITTLE THINGS" signs appeared in the store until the second week
of September 2004. Trial Declaration of Maria E. Thurston, Former
Co-Manager of Victoria's Secret Briarwood Store #105 ("Thurston
Decl.") (undated), ¶¶ 6-9. Ms. Thurston also testified that
through September 2004, she never received brand guides from
corporate headquarters with instructions for displaying "SEXY
LITTLE THINGS" merchandise in the store. Tr. at 80-81.
The "SEXY LITTLE THINGS" collection was rolled out to more
Victoria's Secret stores in September and October 2004, and by
October 19, 2004, the Collection was available to consumers in
all nine hundred and twenty-three Victoria's Secret retail
lingerie stores nationwide. Rice Decl. ¶¶ 11-13. In each of the
stores, there was some form of focal wall or table signage that
displayed the "SEXY LITTLE THINGS" mark together with garments
from the Collection. Tr. at 178, 196. No labels displaying the
Mark were sewn on the merchandise, however, until June 2005. Tr.
at 195-96, 199. Moreover, when the Collection was rolled out,
store receipts did not indicate that the consumer had bought a
"SEXY LITTLE THINGS" item. Tr. at 211.
The Collection was also available to consumers through
catalogues and online. The Collection, according to the
uncontradicted testimony and exhibits, first appeared in the
Major Fall 2 edition of the Victoria's Secret catalogue that was
mailed out to approximately 2.9 million consumers nationwide
between September 4, 2004 and September 9, 2004. 11/30/2005 Trial
Declaration of James J. Pozy, Controller of Victoria's Secret
Direct, LLC ("Pozy Decl.") ¶¶ 6, 9. Because Victoria's Secret
Direct simultaneously makes most of its catalogues available
online through its website, the Major Fall 2 catalogue became
available online on or about September 9, 2004. Id. ¶ 7.
Beginning with the Major Fall 2 edition, the Collection has
appeared in approximately twenty-two editions of the Victoria's
Secret catalogue. Id. ¶ 14. Typically, the catalogues contained several pages dedicated to
the display of "SEXY LITTLE THINGS" merchandise. Copies from
Victoria's Secret Catalogues, Defs. Ex. BB. The Mark was
prominently displayed on these pages together with "SEXY LITTLE
THINGS" items. Occasionally, together with "SEXY LITTLE THINGS"
merchandise, these pages also displayed a few items from
Victoria's Secret's other trademarked collections, sub-brands
such as Angels by Victoria, Body by Victoria, and Very Sexy, so
as to suggest to the consumer various looks that could be created
using pieces from different collections. Tr. at 242-43, 245-46,
248, 250. When this happened, the catalogue copy stated the name
of the collection to which the item belonged. Tr. at 260. In
addition, a few items advertised as part of the "SEXY LITTLE
THINGS" collection were advertised in other editions of the
catalogue as part of another trademarked collection or simply as
general merchandise not belonging to any particular collection.
Tr. at 239-41, 250-51.
In the period July 31, 2004 through November 19, 2005,
Victoria's Secret sold over thirteen million units of "SEXY
LITTLE THINGS" merchandise for total sales of $119,052,756.
11/30/2005 Trial Declaration of Joseph Hippler, Controller of
Victoria's Secret Stores, Inc. ("Hippler Decl.), ¶ 9. The "SEXY
LITTLE THINGS" brand accounted for approximately 4% of Victoria
Secret Stores' total company sales for fiscal year 2005. Id. ¶
On November 11, 2004, Victoria's Secret applied to register
"SEXY LITTLE THINGS" for lingerie on the USPTO's Principal
Register based on first use in commerce dating from July 28,
2004. See Victoria's Secret's Trademark Application File
Wrapper, Defs. Ex. II. At about this time, Victoria's Secret
learnt of Plaintiffs' ITU application for "SEXY LITTLE THING,
SEXY LITTLE THINGS" and of their registration of the domain name
www.sexylittlethings.com. See 11/15/2004 Cease and Desist
Letter, Ex. A to 03/14/2005 Am. Compl., at 1. On November 15,
2004, as recounted in Section II.A supra, Victoria's Secret's
outside counsel sent Plaintiffs a cease and desist letter. Id.
On March 28, 2005, the USPTO suspended further action on
Victoria's Secret's trademark application pending the disposition
of Plaintiffs' ITU application. See Victoria's Secret's Notice
of Opposition to Plaintiffs' Trademark Application, Defs. Ex. JJ,
at 2-3. On September 13, 2005, the USPTO published Plaintiffs'
ITU application for opposition in the Official Gazette. See
id. at 2. Victoria's Secret filed its notice of opposition to
Plaintiffs' application on September 30, 2005, on the grounds
that Victoria's Secret has priority of use as to the Mark, and that registration of Plaintiffs' "SEXY LITTLE
THING, SEXY LITTLE THINGS" mark for identical goods would be
likely to cause consumer confusion. See id. at 3-5. That
action is still pending before the Trademark Trial and Appeal
Board ("TTAB"). Tr. at 6. On January 11, 2005, Plaintiffs filed
the instant action for declaratory judgment of trademark
III. CONCLUSIONS OF LAW
A. Subject Matter Jurisdiction
Victoria's Secret contends that this Court lacks subject matter
jurisdiction on two grounds: (i) ITU applicants have no standing
to bring civil actions prior to registration; and (ii) the
jurisdictional requirements of the Declaratory Judgment Act are
not met because there is no actual case or controversy presented.
Victoria's Secret previously raised these arguments in its motion
to dismiss the Complaint, and because I assume familiarity with
my discussion of these issues in my July 7, 2005 decision denying
Victoria's Secret's motion, I address these arguments again only
briefly. See Menashe v. V Secret Catalogue, Inc., No. 05 Civ.
239, 2005 WL 1580799 (S.D.N.Y. July 7, 2005) (Baer, J.).
1. Standing of ITU Applicant to Bring Civil Action
Plaintiffs concede that ITU applicants have no Lanham Act
rights to bring an offensive action in federal court i.e., to
charge another party with infringement but argue that they may
defend against claims of infringement by another party.
Plaintiffs contend that by bringing a declaratory judgment action
for non-infringement, they are acting defensively.
In my July 7, 2005 decision, I held that the Second Circuit's
decision in Warner Vision Entertainment Inc. v. Empire of
Carolina, Inc., 101 F.3d 259 (2d Cir. 1996), may be read to
allow an ITU applicant to preemptively file an action for
declaratory judgment of non-infringement. See Menashe, 2005
WL 1580799, at *7. In that case, WarnerVision had sued Empire for
trademark infringement. Empire argued that its predecessor in
interest had filed an ITU application prior to WarnerVision's use
of the contested mark, and hence Empire should not be enjoined
from using the mark and completing the ITU registration process.
See WarnerVision, 101 F.3d at 261. The Second Circuit agreed
that Empire could assert the ITU filing to defend against
WarnerVision's efforts to prevent it from completing the ITU
registration process. See id. The Circuit reasoned that
enjoining Empire from using the mark, and hence achieving
registration, would defeat the very purpose of the ITU
provisions, which are to allow an applicant time to make the use of a mark necessary for
registration. See id. at 262. In my July 7, 2005 decision, I
extended the Circuit's reasoning to allow Plaintiffs here to
preemptively defend against Victoria's Secret's efforts to
prevent them from completing the ITU registration process. See
Menashe, 2005 WL 1580799, at *7.
Victoria's Secret attempts to distinguish WarnerVision from
the instant case in two ways. First, Victoria's Secret argues
that in WarnerVision, the ITU applicant was the defendant, not
the plaintiff. Second, and more important, Victoria's Secret
asserts that in WarnerVision, the party that sought to prevent
the ITU applicant from completing its registration process began
use of the contested mark only after the ITU filing date whereas
here, Victoria's Secret used the Mark before Plaintiffs' ITU
filing. As further discussed at Section III.B.2 infra,
Victoria's Secret argues that its use-based rights to the Mark
trump any constructive use rights Plaintiffs may attain by
completing the ITU registration process.
Victoria's Secret's first argument failed to convince me
before, and fails to convince me now. Plaintiffs do not seek to
prevent Victoria's Secret from using the Mark, but rather request
a ruling that they may use the Mark without incurring liability
for infringement so as to complete the registration process. The
formalities of case caption nomenclature should not be elevated
over the substance of Plaintiffs' position.
Victoria's Secret's second argument based on its use of the
Mark before Plaintiffs' ITU filing would be persuasive if its
claim of prior use were unquestioned. To the contrary, however,
Plaintiffs challenge Victoria's Secret's priority. Plaintiffs
assert that even if Victoria's Secret commenced use of the Mark
before Plaintiff's ITU filing, the Mark is descriptive or, in the
alternative, Victoria's Secret used the Mark in a descriptive
manner, and therefore Victoria's Secret is not entitled to
priority without proof that the Mark had acquired secondary
meaning by the time Plaintiffs filed their ITU application. If
Plaintiffs are correct, then the constructive use rights they
would obtain as a result of achieving registration would trump
Victoria's Secret's claims to the Mark. Accordingly, Plaintiffs
are at least entitled to the opportunity to prove, as part of
their prayer for a declaratory judgment of non-infringement, that
the Mark is descriptive or was used descriptively and had failed
to achieve secondary meaning by the time they filed their ITU
Finally, policy considerations are important here, especially
the promotion of certainty in business transactions by fixing an
applicant's priority right as of the date of its filing an application, and the encouragement and reward of early filing so
as to put claims to marks on the public record as soon as
possible. See S. Rep. No. 100-515, at 29-30 (1988). If I
declined to hear this case for lack of subject matter
jurisdiction, Plaintiffs would be faced with the hard choice of
abandoning their application or attempting to complete the
registration process and, in so doing, risk liability for
infringement. This predicament would neither promote commercial
certainty nor reward early filing.
2. Jurisdiction Under Declaratory Judgment Act
Victoria's Secret next contends that this Court lacks subject
matter jurisdiction under the Declaratory Judgment Act because
there is no actual case or controversy presented. Victoria's
Secret asserts that discovery has revealed that Plaintiffs made
only a small monetary investment in their business venture and
had no evidence that their proposed lingerie line was ready to be
sold to the public. Plaintiffs counter that Victoria's Secret's
cease and desist letter caused them reasonably to fear liability
for infringement, and that when they received the letter, they
were virtually about to launch their line.
The test for an actual case or controversy in trademark actions
is two pronged: (i) has the defendant's conduct created a real
and reasonable apprehension of liability on the part of the
plaintiff; and (ii) has the plaintiff engaged in a course of
conduct which has brought it into adversarial conflict with the
defendant. See Starter Corp v. Converse, Inc., 84 F.3d 592,
595 (2d Cir. 1996). An indirect threat of suit is sufficient to
satisfy the first prong. See Muller v. Olin Mathieson Chem.
Corp., 404 F.2d 501, 504 (2d Cir. 1968).
The court in Cargill, Inc. v. Sears Petroleum & Transport
Corp., a declaratory judgment action for patent infringement,
found a real and reasonable apprehension of liability on facts
very similar to those here. See id., No. 02 Civ. 1396, 2002
WL 31426308 (S.D.N.Y. Oct. 28, 2002); see also Starter Corp.,
84 F.3d at 592 (noting that declaratory judgment actions
involving trademarks are analogous to those involving patents).
In Cargill, the declaratory defendant had sent the declaratory
plaintiff a cease and desist letter through its outside attorney
that implied it would sue for patent infringement and gave the
defendant only a short period of time to respond. See Cargill,
2002 WL 31426308, at **3-4. Additionally, the defendant had
informed the plaintiff's distributor and customer that there was
a pending lawsuit between the parties. See id. All factors
but the last are present here. Victoria's Secret sent its cease
and desist letter to Plaintiffs through its outside counsel. The
letter warned that "SEXY LITTLE THING, SEXY LITTLE THINGS" was confusingly similar to "SEXY LITTLE THINGS"
and, if used, "would constitute trademark infringement" and
"false designation of origin" in violation of the Lanham Act and
common law. 11/15/2004 Cease and Desist Letter, Ex. A to
03/14/2005 Am. Compl., at 2. The letter continued that use of
their mark "may subject [Plaintiffs] to Victoria's Secret for an
injunction, profits, damages and attorneys' fees and costs."
Id. This language may reasonably be read as a thinly veiled
threat to sue for trademark infringement should Plaintiffs
commence use of their mark. Finally, the letter gave Plaintiffs
only three days from the date of receipt to respond. See id.
In light of the totality of the circumstances, including the
David and Goliath fact pattern present here, Victoria's Secret's
letter fairly created a real and reasonable apprehension of
liability on the part of Plaintiffs.
As to the second prong, Plaintiffs must show that they had
taken specific steps and had a concrete intention to use their
mark. See Starter Corp., 84 F.3d at 597. Plaintiffs testified
at trial that they had purchased 400 sample pieces of stock
underwear from a manufacturer in China and had arranged with the
manufacturer to produce samples of their lingerie. Plaintiffs had
also started negotiations for silkscreen printing of bulk
shipments of underwear. Further, Plaintiffs testified and
submitted documentary evidence that they had engaged in publicity
to promote their line, had engaged a website designer to build
their site, and had contacted a retailer about selling their
underwear in its stores. These specific steps are more than
sufficient for me to conclude that Plaintiffs had a concrete
intention to use their mark, and support my determination that
Plaintiffs had engaged in a course of conduct that put them in
adversarial conflict with Victoria's Secret. Accordingly,
Plaintiffs have satisfied both prongs of the test for an actual
case or controversy under the Declaratory Judgment Act.
B. Non-Infringement Under Lanham Act & Common Law
Plaintiffs claim that Victoria's Secret has no right of
priority in the Mark because "SEXY LITTLE THINGS" for lingerie is
a descriptive term that had not attained secondary meaning by the
time Plaintiffs filed their ITU application. Consequently,
Plaintiffs assert that they have priority based on their
constructive use rights that date back to the filing of their ITU
application on September 13, 2004. Victoria's Secret counters
that the Mark is suggestive and thus qualifies for trademark
protection without proof of secondary meaning. Therefore,
Victoria's Secret has priority by virtue of its bona fide use
of the Mark in commerce beginning July 28, 2004.
15 U.S.C. Section 1125(a) governs the infringement of
non-registered marks such as the one at issue. In determining infringement under this statute, the
court first ascertains whether the mark is protectable. See
Bristol Myers Squibb Co. v. McNeil-P.P.C., Inc., 973 F.2d 1033,
1039 (2d Cir. 1992). Then, the court assesses whether there is a
likelihood of consumer confusion. See id. Where, as here, the
marks and goods are nearly identical, however, the focus in the
second step shifts from likelihood of confusion to "basic rules
of trademark priority" to "determine use and ownership of the
mark." Buti v. Impressa Perosa, S.R.L., 935 F. Supp. 458, 468
The elements of unfair competition under New York law are very
similar to those for Lanham Act claims under
15 U.S.C. Section 1125(a). See Playtex Prods., Inc. v. Georgia-Pacific Inc.,
No. 02 Civ. 7848, 2003 WL 21939706, at *7 (S.D.N.Y. Aug. 12,
2003) (Baer, J.). Therefore, my analysis under the Lanham Act
also applies to Plaintiffs' common law claim.
1. Protectability of the Mark
To merit trademark protection, a mark "must be capable of
distinguishing the products it marks from those of others." Lane
Capital Mgmt., Inc. v. Lane Capital Mgmt., Inc., 192 F.3d 337,
344 (2d Cir. 1999). As set forth by Judge Friendly in the
landmark case of Abercrombie & Fitch Co. v. Hunting World,
Inc., the four categories of terms to be considered in
determining the protectability of a mark, listed in order of the
degree of protection accorded, are (i) generic, (ii) descriptive,
(iii) suggestive, and (iv) arbitrary or fanciful. See id.,
537 F.2d 4, 9 (2d Cir. 1976). A descriptive term "forthwith
conveys an immediate idea of the ingredients, qualities or
characteristics of the goods." Id. at 11. In contrast, a
suggestive term "requires imagination, thought and perception to
reach a conclusion as to the nature of the goods." Id.
Suggestive marks are automatically protected because they are
inherently distinctive, i.e. "[t]heir intrinsic nature serves to
identify a particular source of a product." Lane Capital Mgmt.,
192 F.3d at 344. Descriptive marks are not inherently distinctive
and may only be protected on a showing of secondary meaning, i.e.
that the purchasing public associates the mark with a particular
source. See Bristol Myers Squibb, 973 F.2d at 1040.
Classification of a mark is a question of fact. See Lane
Capital Mgmt., 192 F.3d at 344. The fact-finder must decide,
based on the evidence, whether prospective purchasers would
perceive the mark to be suggestive or merely descriptive. Id.
at 344-45. A composite mark one comprising more than one term
must be assessed as a whole and not by its parts. See id. at
346. A leading trademark authority has proposed the following
three-part test to distinguish suggestive from descriptive marks: (i) whether the purchaser must
use some imagination to connect the mark to some characteristic
of the product; (ii) whether competitors have used the term
descriptively or rather as a trademark; and (iii) whether the
proposed use would deprive competitors of a way to describe their
goods. See No Nonsense Fashions, Inc. v. Consol. Foods Corp.,
226 U.S.P.Q. 502, 507 nn. 12-14 (T.T.A.B. 1985) (citing 1
McCarthy, Trademarks and Unfair Competition §§ 11.21A-C (2d ed.
1984) and adopting test).
Applying this three-part test, I find "SEXY LITTLE THINGS" to
be suggestive. First, while the term describes the erotically
stimulating quality of the trademarked lingerie, it also calls to
mind the phrase "sexy little thing" popularly used to refer to
attractive lithe young women. Hence, the Mark prompts the
purchaser to mentally associate the lingerie with its targeted
twenty to thirty year-old consumers. Courts have classified marks
that both describe the product and evoke other associations as
inherently distinctive. See, e.g., Blisscraft of Hollywood
v. United Plastics, Co., 294 F.2d 694, 700 (2d Cir. 1961) ("POLY
PITCHER" for polyethylene pitchers is a fanciful mark because it
is reminiscent of Molly Pitcher of Revolutionary time); Colonial
Stores Inc., 394 F.2d 549, 551 (C.C.P.A. 1968) ("SUGAR & SPICE"
for baked goods is distinctive because it not only describes
ingredients but recalls pleasant connotations from a well-known
nursery rhyme); No-Nonsense Fashions, 226 U.S.P.Q. at 507
("SHEER ELEGANCE" for pantyhose is suggestive because it both
describes sheerness of texture and suggests the "ultimate in
elegance"). The second factor is not at issue here as neither
party has submitted evidence of competitors' usage of the term.
Considering the third factor, however, it is hard to believe that
Victoria's Secret's use of the Mark will deprive competitors of
ways to describe their lingerie products. Indeed, Victoria's
Secret's own descriptions of its lingerie in its catalogues and
website illustrate that there are numerous ways to describe
Plaintiffs' alternative contention is that even though the Mark
may be suggestive, Victoria's Secret has used it in a descriptive
manner, i.e. that Victoria's Secret used the words "sexy little
things" to describe its lingerie rather than to identify itself
as the source of the goods. Although not crystal clear, the
thrust of Plaintiffs' argument appears to be that Victoria's
Secret never sold a distinct collection of lingerie under the
"SEXY LITTLE THINGS" mark, and hence the term could not have been
used as a trademark, but only as a description of various items
of underwear drawn from Victoria's Secret's several sub-brands or
from the retailer's general merchandise. Consequently, Victoria's
Secret is not entitled to priority in the Mark.
The Second Circuit has held that "the right to exclusive use of
a trademark derives from its appropriation and subsequent use in
the marketplace." La Societe Anonyme des Parfums Le Galion v.
Jean Patou, Inc., 495 F.2d 1265, 1271 (2d Cir. 1974). A single
use suffices to prove priority if the proponent demonstrates that
his subsequent use was "deliberate and continuous." Id. at
1272. The later filing of an ITU application by another party
does not defeat these use-based rights. See Housing & Servs.
v. Minton, No. 97 Civ. 2725, 1997 WL 349949, at *3 n. 3
(S.D.N.Y. June 24, 1997). The use must, however, be bona fide
"use in commerce" as defined in 15 U.S.C. Section 1127. Under
this statute, the mark must be "placed in any manner on the goods
or their containers or the displays associated therewith or on
tags or labels affixed thereto." 15 U.S.C. § 1127(1)(A).
Prominent use of a mark in a catalog with a picture and
description of the product constitutes a display associated with
goods and not mere advertising because of the "point of sale"
nature of the display. See Lands' End, Inc. v. Manback,
797 F. Supp. 511, 514 (E.D. Va. 1992). The same principle can
reasonably be extended to "point of sale" website displays.
Whether or not a term has been used as a trademark must be
determined from the perspective of the prospective purchaser.
See Cache, Inc. v. M.Z. Berger & Co., No. 99 Civ. 12320, 2001
WL 38283, at *7 n. 6 (S.D.N.Y. Jan. 16, 2001).
At trial, Plaintiffs highlighted the delay in the roll-out of
the Collection to the Briarwood, Michigan store. They
painstakingly pointed to evidence that a few items sold as "SEXY
LITTLE THINGS" had previously been sold under one of Victoria's
Secret's other trademarks, or as part of a store's general
merchandise. Plaintiffs also made much of the fact that in
Victoria's Secret's catalogues and on its website, a few items
from other trademarked collections were included in pages
displaying "SEXY LITTLE THINGS" lingerie. Finally, Plaintiffs
argued that the late introduction of sewn-in garment labels
bearing the Mark and the delay in indicating on receipts that an
item was from the "SEXY LITTLE THINGS" collection proved that
there was no "SEXY LITTLE THINGS" collection prior to the filing
of their ITU application.
Plaintiffs' determination to ignore the model for the underwear
fails to overcome the overwhelming evidence that Victoria's
Secret used "SEXY LITTLE THINGS" as a trademark in commerce
beginning on July 28, 2004. Commencing on that date, the
prominent use of the Mark in four stores on focal wall and table
signage, on hangtags, and in window and floor displays in close association with the lingerie satisfies the
"use in commerce" requirement of 15 U.S.C. Section 1127.
Similarly, Victoria's Secret's prominent use of the Mark in its
catalogues beginning on September 4, 2004, and on its website
beginning on or about September 9, 2004, together with pictures
and descriptions of the goods meets the Lands' End test, as
both mediums were "point of sale" displays. Moreover, Victoria's
Secret produced abundant testimony that, dating from July 28,
2004, it continuously used the Mark in association with lingerie
sold through its retail stores, catalogues, and online. That
Victoria's Secret sold a few garments as part of more than one
collection, or that it occasionally included garments from other
collections in the catalogue spreads showing "SEXY LITTLE THINGS"
lingerie do not detract from such trademark use. Prospective
purchasers of underwear, whose perception is determinative on the
question of trademark use here, are unlikely to undertake the
type of microscopic scrutiny Plaintiffs engaged in to unearth
these details for purposes of this litigation. I find that
because Victoria's Secret made bona fide trademark use of "SEXY
LITTLE THINGS" in commerce before Plaintiffs filed their ITU
application, and has continued to use that Mark in commerce,
Victoria Secret has acquired priority in the Mark. Consequently,
Plaintiffs are not entitled to a declaratory judgment of
non-infringement under the Lanham Act or at common law.
Plaintiffs contend that a declaration of no-cybersquatting is
proper because they registered the domain name
www.sexylittlethings.com in good faith and did not know, nor
should have known, of Victoria's Secret's use of the Mark.
Victoria's Secret responds that this Court has no jurisdiction
over this claim because Plaintiffs did not obtain Lanham Act
rights through mere registration of their domain name, and there
is no actual case or controversy because Victoria's Secret never
threatened Plaintiffs with suit for cybersquatting.
I agree with Victoria's Secret that Plaintiffs have failed to
establish the existence of an actual case or controversy related
to cybersquatting. Victoria's Secret's cease and desist letter
may not reasonably be read to threaten Plaintiffs with suit for
cybersquatting. The letter made no reference to cybersquatting.
Victoria's Secret did demand that Plaintiffs transfer their
domain name to it, but this demand was in a separate paragraph
and logically unconnected to the sections of the letter that
discuss infringement, the only sections that may be read to
threaten litigation. See 11/15/2004 Cease and Desist Letter,
Ex. A to 03/14/2005 Am. Compl., at 2. Moreover,
15 U.S.C. Section 1125(d)(1)(A), which regulates cybersquatting, requires a showing
that the defendant "has a bad faith intent to profit" from a mark. Id.
As Plaintiffs claim that they registered the domain name in good
faith, they had no reason to fear liability for cybersquatting.
Consequently, Plaintiffs fail to persuade me that they had a real
and reasonable apprehension of liability for cybersquatting as
required for jurisdiction under the Declaratory Judgment Act, and
this Court lacks subject matter jurisdiction over this claim.
See Section III.A.2 supra.
D. Tortious/Fraudulent Misrepresentation
Plaintiffs claim that Victoria's Secret representation of its
rights to the Mark together with its threats of litigation
against Plaintiffs constitute tortious or fraudulent
misrepresentation. Victoria's Secret contends that Plaintiffs
have not established any of the elements required for this cause
In order to state a claim for fraudulent misrepresentation
under New York law, Plaintiffs must show that: (i) Victoria's
Secret knowingly or recklessly made a material false
representation; (ii) Victoria's Secret intended to defraud
Plaintiffs thereby; (iii) Plaintiffs reasonably relied on the
representation; and (iv) Plaintiffs suffered damages as a result
of such reliance. See Eternity Global Master Fund Ltd. v.
Morgan Guaranty Trust Co. of New York, 375 F.3d 168, 186-87 (2d
As I concluded at Section III.B.2 supra, it was not
unreasonable for Victoria's Secret to believe that it owned the
Mark through prior adoption and use in commerce. Accordingly,
Victoria's Secret did not knowingly and recklessly make a
material false representation and did not intend to defraud
Plaintiffs by claiming that it had rights to the Mark. Plaintiffs
are unable to establish these essential elements of this cause of
E. Punitive Damages
Plaintiffs seek punitive damages on the ground that Victoria's
Secret's cease and desist letter egregiously misrepresented its
rights to the Mark and fraudulently attempted to coerce
Plaintiffs into abandoning their ITU application and domain name.
Victoria's Secret argues that Plaintiffs fail to meet the high
threshold required to prove entitlement to punitive damages.
In New York, punitive damages will only be awarded on a showing
of "aggravation or outrage, such as spite or `malice,' or a
fraudulent or evil motive on the part of the defendant, or such a
conscious and deliberate disregard of the interests of others
that the conduct may be called willful or wanton." Purgess v.
Sharrock, 33 F.3d 134, 143 (2d Cir. 1994). In light of my
conclusion in Section III.D supra, Plaintiffs fall far short of
making the required showing. F. Costs and Reasonable Attorneys' Fees
Plaintiffs seek to recover the costs of this action and
reasonable attorneys' fees based on Victoria's Secret's allegedly
tortious actions. In its turn, Victoria's Secret requests an
award of costs and attorneys' fees incurred in defending against
Plaintiffs' frivolous claims.
In New York, attorneys' fees may only be awarded to a
prevailing party if there is an agreement between the parties, a
statute, or a court rule that provides for such an award. See
Oscar Gruss & Son, Inc. v. Hollander, 337 F.3d 186, 199 (2d
Cir. 2003). In addition, a court has the authority to award
attorneys' fees to the prevailing party if the opposing party or
its attorneys prosecute or defend in "bad faith, vexatiously,
wantonly, or for oppressive reasons." Tri-Star Pictures, Inc. v.
Unger, 42 F. Supp. 2d 296, 301 (S.D.N.Y. 1999) (citation
Because Plaintiffs have not prevailed in this action, there is
no need to dwell any further on their claim for costs and
attorneys' fees. As to Victoria's Secret's claim, I find that
neither the Oscar Gruss nor the Tri-Star tests are met. At
trial, Victoria's Secret emphasized that Plaintiffs never
bothered to go into a Victoria's Secret store or look in its
catalogues after receiving the cease and desist letter in order
to ascertain whether Victoria's Secret was using the Mark,
despite having easy access to both. While Plaintiffs appear to
have demonstrated a singular lack of curiosity in this regard,
there is nothing in this record to suggest that they acted in
"bad faith, vexatiously, wantonly, or for oppressive reasons."
Even if Plaintiffs had conducted this investigation themselves,
and seen the various displays of the Mark, they may still have
believed that Victoria's Secret's usage was descriptive given
that they are not trademark law mavens and that sewn-in garment
labels had not yet been introduced when they filed their
Complaint. Moreover, Plaintiffs had commissioned two trademark
investigations that reported that no one had used the Mark prior
to their ITU filing. Even though those reports turned out to have
been erroneous, it was not vexatious or wanton for Plaintiffs to
have relied on them. Finally, while it might have been
precipitate of Plaintiffs to have filed suit without first
attempting to communicate with Victoria's Secret's outside
counsel, it cannot be said that their response was undertaken in
bad faith or for oppressive reasons given the imperious tone of
the cease and desist letter. IV. CONCLUSION AND ORDER OF JUDGMENT
Plaintiffs are not entitled to a declaratory judgment of
non-infringement under the Lanham Act or at common law. Neither
are they entitled to a declaratory judgment of no-cybersquatting,
a judgment of tortious/fraudulent misrepresentation, an award of
punitive damages, nor costs and reasonable attorneys' fees.
Consequently, the Complaint must be dismissed in its entirety.
Victoria's Secret is not entitled to an award of costs and
reasonable attorneys' fees. The Clerk of the Court is instructed
to close any open motions and remove this case from my docket.
© 1992-2006 VersusLaw Inc.