## Facts

- Ronit Menashe (a publicist) and Audrey Quock (a model/actress) formed a venture to sell women’s underwear using the mark “SEXY LITTLE THINGS.”
- Around June 2004, plaintiffs began planning the underwear line; in July 2004, they chose “SEXY LITTLE THINGS” as the name.
- Plaintiffs obtained about 400 plain sample underwear pieces from a Chinese manufacturer and heat-pressed words/logos onto them in late July or early August 2004.
- Plaintiffs registered the domain name “sexylittlethings.com” and filed an intent-to-use federal trademark application for “SEXY LITTLE THINGS.”
- Victoria’s Secret had been developing a panty collection using “SEXY LITTLE THINGS” since as early as 2002.
- In July 2004, Victoria’s Secret rolled out products using “SEXY LITTLE THINGS,” featuring the mark prominently in stores, catalogues, and online.
- On November 16, 2004, Victoria’s Secret’s counsel sent plaintiffs a cease-and-desist letter asserting prior trademark use and demanding plaintiffs abandon their trademark application and domain name.
- Plaintiffs ceased production/marketing efforts and filed a declaratory judgment action seeking declarations of noninfringement and non-cybersquatting, plus misrepresentation-related relief and punitive damages.
- After a bench trial in December 2005, the court issued a post-trial opinion and judgment.

## Issues

1. Whether the cease-and-desist letter and surrounding conduct created an “actual case or controversy” permitting declaratory judgment jurisdiction for trademark noninfringement.
2. Whether an “actual case or controversy” existed to support a declaratory judgment of non-cybersquatting under the ACPA.
3. Whether Victoria’s Secret had priority in “SEXY LITTLE THINGS” through prior “use in commerce,” defeating plaintiffs’ request for declaratory noninfringement under the Lanham Act and common law.
4. Whether “SEXY LITTLE THINGS” was merely descriptive and, if so, whether plaintiffs established the absence of secondary meaning in Victoria’s Secret’s use.
5. Whether Victoria’s Secret made knowing or reckless false representations supporting tortious/fraudulent misrepresentation and punitive damages, and whether plaintiffs were entitled to fees and costs.

## Decision

- The court found declaratory judgment jurisdiction existed for the trademark noninfringement claims because the cease-and-desist letter created a real and reasonable apprehension of an infringement suit.
- The court concluded there was no justiciable controversy supporting declaratory relief on plaintiffs’ ACPA non-cybersquatting theory because Victoria’s Secret did not threaten an ACPA claim and plaintiffs showed no concrete ACPA dispute.
- On the merits, the court ruled Victoria’s Secret had priority in “SEXY LITTLE THINGS” based on bona fide prior use in commerce, including a July 2004 rollout in stores, catalogues, and online.
- The court denied plaintiffs’ requests for declaratory noninfringement under the Lanham Act and common law.
- The court rejected plaintiffs’ descriptiveness/secondary-meaning attack on Victoria’s Secret’s rights.
- The court rejected plaintiffs’ tortious/fraudulent misrepresentation and punitive damages claims for failure to prove knowing or reckless falsity.
- The court denied plaintiffs’ requests for costs and attorneys’ fees.

## Legal Principles

- Declaratory judgment jurisdiction in trademark disputes exists when a rights-holder’s demand letter and related conduct create a real and reasonable apprehension of infringement liability.
- A demand letter asserting trademark priority does not, without more, create an actual controversy for declaratory relief under the ACPA if a cybersquatting claim is not threatened and no concrete ACPA dispute is shown.
- Trademark priority generally turns on earlier bona fide “use in commerce”; substantial commercial rollout and promotion can establish priority over a later adopter with limited preparatory activity and an intent-to-use application.
- Claims for fraudulent or tortious misrepresentation in trademark disputes require proof of a knowingly or recklessly false representation; an arguable or ultimately correct assertion of priority is insufficient.
- Attorneys’ fees and costs are not awarded to a party that fails to establish a statutory or equitable basis for fee shifting.

## Conclusion

The court entered judgment for Victoria’s Secret, holding that its earlier commercial use established priority in “SEXY LITTLE THINGS,” defeating plaintiffs’ noninfringement and related claims, and that plaintiffs lacked a justiciable controversy for a declaratory non-cybersquatting ruling under the ACPA.


Menashe v. V Secret Catalogue, Inc., 409 F. Supp. 2d 412 (S.D.N.Y. 2006)