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WILLIAMS-SONOMA, INC., DBA POTTERY BARN v. COLIN L. POWELL, SECRETARY OF STATE No. 04-1000 SUPREME COURT OF THE UNITED STATES Per Curiam Barely a year after we decided Moseley v. Secret Catalogue, Inc., 537 U.S. 418 (2003), this matter requires this Court to revisit the Federal Trademark Dilution Act (FTDA), 109 State 985-986. The FTDA, an amendment to § 43 of the Trademark Act of 1946, 15 U.S.C. § 1125 (TA), provides a remedy for the dilution of famous marks. We granted certiorarito decide whether the FTDA authorizes relief to the holders of famous marks allegedly diluted by remarks made by a high-ranking official of the United States government in the course of safeguarding his reputation (CYA). I Petitioner Williams-Sonoma Inc., dba Pottery Barn (Pottery Barn), offers a wide variety of sensibly priced furniture, bedding and bath, rugs, pillows, window accessories, lighting products, and tableware. Pottery Barn’s products are sold at 174 stores across the country, and its wedding and gift registries are available at all stores and on the Internet. www.potterybarn.com. Pottery Barn is the owner of the POTTERY BARN trademark, which, in variations, has been the subject of nine federal trademark registrations dating back to 1957. Respondent Colin L. Powell (Powell) is the 65th Secretary of State of the United States. Previously, he served in the U.S. Army for 35 years, rising to the rank of Four Star General and serving as Chairman of the Joint Chiefs of Staff. In April of this year, “Plan of Attack,” a 467-page book authored by Bob Woodward, was published by Simon & Schuster. The book covers the administration’s run-up to the war in Iraq. The book reports the following episode, at page 150, involving Powell and the President: “You are going to be the proud owner of 25 million people,” he told the president. “You will own all their hopes, aspirations and problems. You’ll own it all.” Privately, Powell and [Deputy Secretary of State Richard L.] Armitage called this the Pottery Barn rule: You break it, you own it. The book has been widely promoted, and has ranked No. 1 on the New York Timeshardcover nonfiction bestseller list. After publication, Pottery Barn immediately filed suit against Powell alleging violation of the FTDA and seeking injunctive relief. The trial court dismissed the action and the D.C. Circuit affirmed. Because sales of the book are still climbing, and the alleged injury is at a critical stage, we granted emergency review. We reverse. Pottery Barn claims that Powell’s reference to the “Pottery Barn rule” dilutes the distinctive quality of the POTTERY BARN mark by causing both tarnishment and blurring. As to tarnishment, Pottery Barn points out that there is no such thing as the “Pottery Barn rule.” Most of its merchandise, such as furniture, rugs and pillows, is difficult, if not impossible, to break. According to Leigh Oshirak, director of public relations, if a customer drops a vase or wine goblet, the company will absorb the loss. (C.R. 945) Therefore, contrary to the implication underlying Powell’s reported statement, if the president, or some other administration official, were to break a Pottery Barn item, he would not thereby acquire ownership (and concomitant financial responsibility). Insinuating that Pottery Barn customers have to pay for what they break tarnishes the positive associations otherwise associated with the mark, Pottery Barn contends. Second, as to blurring, Pottery Barn notes that even if one of its 174 stores mistakenly enforced such a rule, ultra vires, the rule would be narrowly applied to cover only store items. “Under no circumstances, would Pottery Barn attempt to apply such a rule at the geopolitical level,” according to Oshirak. (C.R. 947) Oshirak also notes that since its founding in 1949, Pottery Barn has observed a policy of strict neutrality in international affairs. While the company carries a wide assortment of Oriental and Persian Design carpets and other home furnishings, it scrupulously avoids taking sides in foreign policy controversies. In Moseley v. Secret Catalogue, Inc., we held that the FTDA requires a complaining party to provide evidence of actual lessening of the capacity of the mark to identify and distinguish goods and services. Pottery Barn cites mass demonstrations in front of its stores in San Francisco, Cambridge and Ann Arbor, demanding that the company stop breaking countries, and further demanding that the company withdraw from Iraq, as evidence of the lessening of the distinguishing capacity of its POTTERY BARN mark. It points out, unnecessarily, that the company has never broken a single country or other political entity, and that it maintains no troops or sales personnel in Iraq. Powell offers two defenses. First, he notes that the FTDA protects only “famous” marks. Powell challenges the status of POTTERY BARN as famous. Second, Powell maintains that his reference to the Pottery Barn rule is immunized by the First Amendment, and by § 3(a)(4)(B) and (C), which exclude from actionability “noncommercial use of a mark � [and] all forms of news reporting and news commentary.” The district court dismissed the action on the bases of noncommercial use and news commentary. In reversing, we address both defenses. II Powell argues that POTTERY BARN is not a famous mark. At the district court, he submitted a short declaration stating that neither he nor his wife, Alma, has ever shopped at Pottery Barn, and that he had never even heard of Pottery Barn until Deputy Secretary Armitage mentioned it at a National Security Council meeting three weeks before the onset of military action in Iraq. (C.R. 321-3) Pottery Barn provided evidence, in the form of sales records, showing that he and Deputy Secretary Armitage have shopped at their Georgetown store on several occasions, most recently in the week before the invasion of Iraq. On that occasion, Powell and Armitage purchased identical Blakely printed voile drapes, with matching tassel tiebacks, for their offices. Visitors to the State Department agree that Powell’s and Armitage’s new curtains provide a “fresh new outlook.” (C.R. 745, 759, and 809) Powell counters that to the extent POTTERY BARN is famous, its fame extends only in its “niche market.” The “niche” in this case, Powell maintains, is “upscale shops for sophisticated metrosexuals like Deputy Secretary of State Armitage.” Dilution is actionable only when the defendant uses such marks within their niche, which, he insists, he did not do. Cf. Thane Intern. v. Trek Bicycle Corporation, 305 F.3d 894 (9th Cir. 2002). We find this point unpersuasive. We note that the president and his senior advisers, none of whom are sophisticated metrosexuals, all understood Powell’s reference to the “Pottery Barn rule.” No one asked him to explain it. We attribute this absence of curiosity to the fact that the POTTERY BARN mark is well known and instantly recognizable, even by Secretary of Defense Donald Rumsfeld. III Powell next contends that even if the mark is famous, his use is sanctioned by the First Amendment as a noncommercial news commentary. Powell cites LucasFilm, Ltd. v. High Frontier, 622 F.Supp. 931 (D.D.C. 1985), in which the District of Columbia federal court refused to enjoin the use of the STAR WARS mark by public interest organizations debating the merits of President Reagan’s Strategic Defense Initiative. But LucasFilmwas decided long ago, and in an intellectual property galaxy (trademark infringement) far, far away from the FTDA. Moreover, the Secretary’s right to freely express ideas is not at issue in this case. Powell could have voiced his reservations over the President’s policies without citing the POTTERY BARN mark. For example, as Pottery Barn points out, the Secretary could have expressed the same idea by referring to a possible “Crate & Barrel rule.” According to evidence submitted by Pottery Barn, reference to the “Crate & Barrel rule” would have been more appropriate since their merchandise “is very cheap and breaks easily.” (C.R. 952, and Exhibits 1-47) Finally, Powell argues that his use of the mark was “noncommercial” and thus outside the scope of the FTDA. Powell notes that commercial use under the FTDA has been defined as the “use of a famous and distinctive mark to sell goods other than those produced or authorized by the mark’s owner.” Mattel, Inc. v. MCA Records, 296 F.3d 894 (9th Cir. 2002). Since Powell was not selling goods, he maintains, he cannot be held liable. We disagree. Our nation’s capital has a vibrant economy even though it produces very few tangible goods in the conventional economic sense. Instead, the local economy is based on intangible products, such as access, prestige, influence and “juice.” High-ranking government officials are in the marketplace everyday, offering stories to interested journalists. The unstated bargain is that in return for information, the source will receive sympathetic coverage. In serving as a source for Woodward, the Secretary of State was engaged in selling his version of events, which is to say, he was trading access for favorable coverage. See, e.g., Financial Times, April 20, 2004, p. 9 (“That Colin Powell has acted as a dutiful soldier-servant of the president throughout the Iraq crisis is an image cultivated by the secretary of state himself.”) His commercial transaction was profitable. Powell’s star has generally risen since the publication of “Plan of Attack.” In conclusion, we find that Powell’s reference to the “Pottery Barn rule” was a commercial, dilutive use of a famous mark. The judgment is therefore reversed, and the case is remanded for further proceedings consistent with this opinion. It is so ordered. Contributing Writer Lawrence J. Siskind, of San Francisco’s Harvey Siskind Jacobs LLP, specializes in intellectual property law. He can be contacted at [email protected].

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