In three previous blog posts (see: Of Special Interests, Mosely Fights On, and The Fat Lady Has Sung), we wrote of Victoria’s Secret, which took its uplifting arguments all the way to the United States Supreme Court in its efforts to protect and enforce its trademark rights. Well, now the tables are turned and Victoria’s Secret is being accused of something akin to violation of another party’s trademark rights. (Airs Aromatics LLC v. Victoria’s Secret Stores Brand Management, Inc. et al.)
Airs claims to be the owner of “common-law” (lawyerspeak meaning “not registered”) trademark rights in the mark ANGEL DREAMS in respect of a line of personal care products. In 1999, Victoria’s Secret, demonstrating a startling lack of creativity, desired to market a line of personal care products under the mark “Dream Angels.” Allegedly realizing that use of this mark “would be likely to cause consumer confusion” in light of Airs Aromatics’ use of ANGEL DREAMS on virtually identical goods, Victoria’s Secret took a license, agreeing to an annual royalty of a measly twenty-five thousand dollars ($25,000).
“Several years” later, there arose an unspecified “internal disagreement” between the “principal” of Airs and an unidentified “business associate” regarding, among other things, the ownership of the ANGEL DREAMS mark. Victoria’s Secret, which was aware of this “disagreement,” allegedly agreed to place all future royalties in escrow, pending resolution by Airs. Victoria’s Secret continued to make escrow payments through 2008, at which point it – allegedly – ceased making any payments and withdrew the entire balance from the escrow account. It is further alleged, by Airs, that in 2007, Victoria’s Secret applied for registration of “several Dream Angels related marks.” (Why Airs waited four (4) years to raise this issue is not explained).
The complaint filed by Airs is interesting in several respects. First, it includes the rather intriguing allegation (paragraph 38) that “Plaintiff never abandoned its rights to the mark ‘Angel Dreams’ and never abandoned its intent to use the mark ‘Angel Dreams’ in conjunction with its product line, which included, but was not limited to…personal care products” (emphasis added). Note the repeated use of the past tense. Note also that a rebuttable legal presumption of abandonment is created by two years of nonuse of a trademark.
The complaint is further interesting in that there is no allegation of trademark infringement. Airs alleges breach of contract, but not trademark infringement. The claim of breach of contract is itself most interesting in that the contract is an annual one wherein “[o]n any failure of [licensee] to pay as required, this Agreement shall become void.” It would seem to us that when Victoria’s Secret ceased paying the annual royalty, the license became void and, hence, there was no longer any contract to breach.
Hopefully this matter will be expeditiously resolved and will not distract Victoria’s Secret from production of its eagerly awaited annual TV extravaganza.
The Lesson To Be Learned – read your contract before suing for breach.