88 F.4th 125
2d Cir.2023Background
- MSCHF (an art collective) designed and sold the “Wavy Baby,” a distorted sneaker that deliberately evoked Vans’ iconic Old Skool trade dress and trademarks (side stripe, black-and-white scheme, heel/footbed logos, packaging).
- MSCHF promoted the drop with artist Tyga and sold 4,306 pairs in a one‑hour "drop" for $220 each; Vans sent cease‑and‑desist letters before the sale.
- Vans sued in the Eastern District of New York under the Lanham Act, seeking a TRO and preliminary injunction to stop sales, advertising, and requiring MSCHF to escrow revenues.
- The district court granted the TRO/PI, finding a likelihood of consumer confusion under the Polaroid factors and rejecting MSCHF’s claim that heightened First Amendment (Rogers) protection barred the Lanham Act analysis.
- MSCHF appealed, arguing (1) Rogers/First Amendment should have insulated the parody from trademark law, (2) the injunction was an unconstitutional prior restraint, (3) the escrow of gross revenues exceeded the court’s discretion, and (4) the district court erred by not requiring Vans to post a bond.
- The Second Circuit, guided by the Supreme Court’s decision in Jack Daniel’s, affirmed the injunction, the likelihood‑of‑confusion finding, the escrow order, and held no bond determination was required because MSCHF never requested security.
Issues
| Issue | Plaintiff's Argument (Vans) | Defendant's Argument (MSCHF) | Held |
|---|---|---|---|
| Applicability of Rogers/First Amendment filter | Rogers does not apply because Wavy Baby is likely to confuse consumers; Lanham Act governs | Wavy Baby is an expressive/parodic work entitled to Rogers protection and heightened First Amendment scrutiny | Rogers inapplicable: Jack Daniel’s controls; where mark is used as a source identifier, traditional likelihood‑of‑confusion applies |
| Likelihood of consumer confusion under Polaroid factors | Old Skool marks are strong; similarity, marketing, product proximity, and actual confusion favor Vans | Distortions and parodic message dispel confusion; buyers are sophisticated art collectors | Court affirmed: several Polaroid factors (strength, similarity, proximity, actual confusion, buyer sophistication) favor Vans; overall likelihood of confusion exists |
| Injunction as prior restraint on speech | Injunction is aimed at preventing consumer confusion and protecting trademark rights | Injunction suppresses MSCHF’s expressive/parodic speech and is an unconstitutional prior restraint | Not a prior restraint in this context; trademark injunctions addressing infringement do not automatically violate the First Amendment |
| Escrow of revenues and bond requirement | Escrow of revenues is appropriate to preserve remedies (accounting, disgorgement) | Escrow of gross revenues is overbroad; district court erred by not requiring Vans to post bond | Escrow order permissible given §1117 accounting/profit recovery and MSCHF’s failure to prove production costs; district court did not err in omitting a bond because MSCHF never requested security |
Key Cases Cited
- Jack Daniel’s Properties, Inc. v. VIP Products LLC, 599 U.S. 140 (U.S. 2023) (Rogers does not apply when defendant uses a trademark as a source identifier; parodic message may still inform likelihood‑of‑confusion).
- Polaroid Corp. v. Polarad Electronics Corp., 287 F.2d 492 (2d Cir. 1961) (establishes multi‑factor test for likelihood of confusion).
- Rogers v. Grimaldi, 875 F.2d 994 (2d Cir. 1989) (articulates First Amendment filter for expressive works: artistic relevance and non‑explicitly misleading use).
- Cliffs Notes, Inc. v. Bantam Doubleday Dell Publ’g Grp., Inc., 886 F.2d 490 (2d Cir. 1989) (Rogers framework applied and limitations noted).
- Gucci Am., Inc. v. Weixing Li, 768 F.3d 122 (2d Cir. 2014) (district courts may issue prejudgment asset restraints in Lanham Act cases seeking an accounting).
- Harley‑Davidson, Inc. v. Grottanelli, 164 F.3d 806 (2d Cir. 1999) (humorous or parodic use can nonetheless constitute traditional trademark use subject to infringement analysis).