Vans, Inc. v. MSCHF Product Studio, Inc. ( 2023 )

22-1006
Vans, Inc. v. MSCHF Product Studio, Inc.
In the
United States Court of Appeals
For the Second Circuit
______________
August Term, 2022
(Argued: September 28, 2022 Decided: December 5, 2023)
Docket No. 22-1006
______________
VANS, INC., VF OUTDOOR, LLC.,
Plaintiffs-Appellees,
–v.–
MSCHF PRODUCT STUDIO, INC.,
Defendant-Appellant.
______________
Before: JACOBS, CHIN, and ROBINSON, Circuit Judges.
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Defendant-Appellant MSCHF Product Studio, Inc. (“MSCHF”), the creator
of the Wavy Baby sneaker, appeals from the April 29, 2022 order of the United
States District Court for the Eastern District of New York (Kuntz, J.) granting the
request by Plaintiffs-Appellees Vans, Inc., and VF Outdoor, LLC (collectively
“Vans”) for a temporary restraining order and preliminary injunction enjoining
MSCHF’s use of Vans’ trademark and trade dress in the Wavy Baby sneakers.
On appeal, MSCHF argues that the district court erred by failing to apply
enhanced First Amendment protections in its likelihood-of-confusion analysis
under the Lanham Act and in assessing the likelihood of confusion; the
preliminary injunction is an unconstitutional prior restraint on MSCHF’s free
expression; the district court erred in requiring MSCHF to place its Wavy Baby
revenues in escrow; and the district court erred by failing to make a bond
determination.
The main issues in this appeal are governed by the United States Supreme
Court’s recent decision in Jack Daniel’s Properties, Inc. v. VIP Products LLC, 599 U.S.
140 (2023). Applying Jack Daniel’s, we conclude that Vans is likely to prevail in
arguing that MSCHF’s Wavy Baby shoes used Vans’ marks and trade dress as
source identifiers, and thus no special First Amendment protections apply to
protect MSCHF against Vans’ trademark infringement claim. As such, the district
court did not err in concluding that Vans is likely to prevail on the merits of its
trademark infringement claim in light of the likelihood of confusion as to the
source of the Wavy Baby shoes. We further conclude that the district court did not
err in requiring MSCHF to escrow its revenues from Wavy Baby sales, and that
the district court was not required to make a bond determination because MSCHF
never requested security. We therefore AFFIRM.
______________
DAVID H. BERNSTEIN (Megan K. Bannigan,
Debevoise & Plimpton LLP, New York, NY;
William D. Patterson, Swanson, Martin & Bell,
LLP, Chicago IL, on the brief), for Defendant-
Appellant.
LUCY JEWETT WHEATLEY, McGuire Woods LLP,
Richmond, VA (Philip A. Goldstein, McGuire
Woods LLP, New York, NY; Tanya L. Greene,
McGuire Woods LLP, Los Angeles, CA, on the
brief), for Plaintiffs-Appellees.
Vivek Jayaram, Jayaram Law Group, Chicago, IL,
for Amicus Curiae Daniel Arsham in Support of
Defendant-Appellant.
2
Ronald D. Coleman, Dhillon Law Group Inc.,
Newark, NJ, for Amici Curiae Emmanuel Perrotin,
Jean-Paul Engelen in Support of Defendant-Appellant.
Mark A. Lemley, Lex Lumina PLLC, New York,
NY, for Amici Curiae Intellectual Property Professors
in Support of Plaintiffs-Appellees.
John P. O’Herron (Zachary D. Cohen, Rachel W.
Adams, on the brief), ThompsonMcMullan, P.C.,
Richmond, VA, for Amici Curiae American Apparel &
Footwear Association, Footwear Distributors &
Retailers of America, Council of Fashion Designers of
America, Inc., and Accessories Council in Support of
Plaintiffs-Appellees.
Stanley Panikowski, DLA Piper LLP (US), San
Diego, CA (Tamar Y. Duvdevani, DLA Piper LLP
(US), New York, NY, on the brief), for Amicus Curiae
Nike, Inc., in Support of Plaintiffs-Appellees.
Vijay K. Toke, Rimon P.C., San Francisco, CA
(Martin Schwimmer, Leason Ellis LLP, White
Plains, NY; David Donahue, Fross Zelnick
Lehrman & Zissu, P.C., New York, NY, on the brief),
for Amicus Curiae International Trademark
Association in Support of neither party.
Rhett O. Millsaps II, Lex Lumina PLLC, New York,
NY (Mark P. McKenna, Christopher J. Sprigman,
Rebecca Tushnet, on the brief), for Amici Curiae
Authors Alliance, Mason Rothschild, Alfred Steiner in
Support of neither party.
______________
3
PER CURIAM:
In this case, defendant-appellant MSCHF Product Studio, Inc. (“MSCHF”),
created a sneaker, the Wavy Baby, that purported to parody the Old Skool shoe,
created and marketed by plaintiff-appellee Vans, Inc. (“Vans”), and thereby
comment on the consumerism inherent in sneakerhead culture. MSCHF altered
the features of an Old Skool sneaker by distorting Vans’ trademarks and trade
dress, resulting in a shoe that was “exceedingly wavy.” After MSCHF engaged in
an online marketing campaign, it sold 4,306 pairs of the Wavy Baby in one hour.
Vans, unsurprisingly, was not amused.
The central issue in this case is whether and when an alleged infringer who
uses another’s trademarks for parodic purposes is entitled to heightened First
Amendment protections, rather than the Lanham Act’s traditional likelihood of
confusion inquiry.
The Supreme Court recently addressed this issue in Jack Daniel’s Properties,
Inc. v. VIP Products LLC, 599 U.S. 140 (2023). There, the Court held that, even if an
alleged infringer used another’s trademarks for an expressive purpose, special
First Amendment protections did not apply if the trademarks were used for source
identification—that is, if the alleged infringer was “trading on the good will of the
trademark owner to market its own goods.” Id. at 156 (citation omitted). Applying
4
Jack Daniel’s, we conclude that no special First Amendment protections apply to
insulate MSCHF against Vans’ trademark infringement claim. 1 As to those
trademark infringement claims, the district court did not err in concluding that
Vans is likely to prevail on the merits. We further conclude that the district court
did not err in requiring MSCHF to escrow its revenues from Wavy Baby sales, and
that the district court was not required to make a bond determination because
MSCHF never requested security. We therefore AFFIRM.
BACKGROUND 2
I. Facts
A. Vans
Vans is a globally known footwear and apparel company that specializes in
skateboard-friendly shoes and sneakers. The company, founded in 1966,
originally catered to customers in Southern California. Vans became popular
among skateboarders, celebrities, and the public. One of Vans’ most recognizable
products is its “Old Skool” shoe, shown below:
1 After we heard oral argument, we held the case pending a decision by the Supreme Court in
Jack Daniel’s. After the Supreme Court ruled, the parties submitted supplemental briefing.
2 This account is drawn from the record relied upon by the district court, comprising the parties’
declarations and exhibits.
5
Vans Old Skool Shoe
Jt. App’x at 13, 15.
The Old Skool trade dress consists of a combination of elements, including:
(1) the Vans Side Stripe Mark on the upper shoe; (2) a rubberized sidewall of
uniform height around the shoe’s perimeter; (3) a three-tiered or grooved sidewall;
(4) a textured toe box; (5) visible stitching; and (6) the placement and proportion
of each of these elements in relation to one another. Jt. App’x at 256. It also
features a distinctive “waffle sole” design. Id. at 258. The Old Skool is one of Vans’
most popular shoes and sold for about $60 a pair. Most Old Skool shoes are black
and white, but Vans has expanded the shoes to come in a variety of colors or color
arrangements.
Vans often collaborates with artists and celebrities to design and sell special
edition versions of its shoes, including the Old Skools. Beyond official
collaborations, many of the rich and famous have been photographed wearing the
Vans Old Skool. In short, the Old Skool is an iconic Vans sneaker, easily
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recognizable by both “sneakerheads” and the uninitiated. Id. at 273 (explaining
that sneakerheads are people who collect shoes to display them, but “rarely” to
wear them).
B. MSCHF
MSCHF is a Brooklyn-based art collective “known as (and for) MSCHF.” Id.
at 271. MSCHF’s mission is to use artwork “to start a conversation about consumer
culture . . . by participating in consumer culture.” Id. at 486–87. MSCHF
recontextualizes everyday objects as a means of commenting on contemporary
society. MSCHF’s work has been displayed in museums, galleries, auction houses,
and art shows worldwide, including Phillips Auction House, Art Basel, the Design
Museum of London, and the Perrotin gallery.
MSCHF’s works are often sold with “manifestos” that explain the work’s
commentary and are sold in “drops,” or prescribed sales periods. Recent drops
have critiqued music, the political system, consumerism, digital media,
standardized testing, holidays, and the legal system. And often, MSCHF’s
“drops” will sell out in a day.
MSCHF has recently focused its artistic expression on “sneakerhead
culture.” Sneakers are utilitarian objects for most, but for sneakerheads, shoes are
expressive, “collect[ed], trade[d], and display[ed] as a hobby.” Id. at 497. MSCHF
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critiques the consumerism present in sneakerhead culture, as well as sneaker
companies’ practice of collaborating with “anyone and everyone to make money.”
Id. at 352.
C. The Wavy Baby
This case is about MSCHF’s sneaker drop of the “Wavy Baby” shoe,
depicted below:
MSCHF “Wavy Baby”
Jt. App’x at 14, 17.
MSCHF’s co-Chief Creative Officer explained MSCHF’s conception of the
connection between Vans’ Old Skool shoe and MSCHF’s Wavy Baby in the
following manner: “The Wavy Baby concept started with a Vans Old Skool
sneaker” because no other shoe embodies the dichotomies between “niche and
8
mass taste, functional and trendy, utilitarian and frivolous” as perfectly as the Old
Skool. Id. at 353. The Wavy Baby design process thus started with an image of a
classic Vans Old Skool skate shoe. Id. MSCHF used a digital filter tool to warp the
shoe into a new image, “transform[ing] the once iconic shoe into the modern,
wobbly, and unbalanced realities.” Id. at 353–54. One evident feature of the
parody is that the distortion destroys the original premise of the Old Skool’s
popularity—its utility as a skateboarding shoe due to its flat sole.
Wavy Baby incorporates and distorts the Old Skool black and white color
scheme, the side stripe, the perforated sole, the logo on the heel, the logo on the
footbed, and the packaging. Examples of the critical similarities, and distortions,
are reflected in the graphics below.
Vans’ Trademarks/Trade Dress WAVY BABY Design
9
Vans’ Trademarks/Trade Dress WAVY BABY Design
10
Vans’ Trademarks/Trade Dress WAVY BABY Design
Jt. App’x at 171–72; 252–53.
Prior to the Wavy Baby’s release, MSCHF engaged in a marketing campaign
in collaboration with musical artist Michael Stevenson, also known as Tyga. Id. at
363. MSCHF advertised the Wavy Baby collaboration before releasing the
sneakers for sale—garnering hype and excitement through MSCHF’s website,
Instagram and YouTube accounts, and sneaker-focused platforms. Tyga also
released a music video in which he wore the Wavy Baby shoe. Id. at 377.
Upon learning of the impending drop of the Wavy Baby shoe, Vans sent a
cease and desist letter to Tyga on April 5, 2022, and to MSCHF the following day,
putting them on notice of their claim that the Wavy Baby shoes infringed their
trademarks and trade dress. MSCHF, however, continued to promote the planned
drop and on April 18, 2022, after this suit commenced, launched the pre-planned
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one-hour drop of 4,306 Wavy Baby shoes. Customers purchased the shoes only
on MSCHF’s proprietary app for $220.
II. District Court Proceedings
Vans filed a complaint in United States District Court for the Eastern District
of New York on April 14, 2022, alleging six claims under state and federal law,
including a federal claim for trademark infringement under the Lanham Act. 15
U.S.C. § 1114.
On April 15, 2022, Vans filed a motion for a temporary restraining order and
preliminary injunction asking the district court to enjoin MSCHF from: (1)
fulfilling orders for or otherwise releasing for sale to the public any of the “Wavy
Baby” shoes, or colorful imitations or reconstructions thereof (the “Prohibited
Shoes”); (2) using Vans’ Old Skool trade dress or marks or confusingly similar
marks (collectively, the “Prohibited Marks”); (3) referring to or using any
Prohibited Marks in any advertising, marketing, or promotion; and (4) aiding any
other person or entity in taking the prohibited actions. Jt. App’x at 65, 147. Vans
attached to its motion several supporting declarations with exhibits. MSCHF
opposed the motion with numerous declarations and exhibits.
After oral argument on April 27, 2022, the district court granted the
temporary restraining order and preliminary injunction, concluding primarily
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that because Vans had shown a significant danger of consumer confusion, Vans
would likely prevail on its trademark infringement claims; it had shown that it
would suffer irreparable harm without injunctive relief; and the balance of
hardships and public interest supported preliminary relief. Vans, Inc. v. MSCHF
Product Studio, Inc., 602 F. Supp. 3d 358, 368, 371–73 (E.D.N.Y. 2022).
In concluding that Vans would likely prevail on the consumer confusion
issue, the court considered the factors set forth in Polaroid Corp. v. Polarad
Electronics Corp., 287 F.2d 492 (2d Cir. 1961). See Vans, 602 F. Supp. 3d at 367–70.
In particular, the Court concluded that MSCHF’s distortion of the Old Skool marks
and trade dress on the Wavy Baby shoes was not sufficient to dispel the consumer
confusion arising from the similarity of the marks. Id. at 368. It relied on evidence
that various consumers “misunderstood the source of the Wavy Baby shoes as a
collaboration between [Vans] and [MSCHF],” id., and admissions by MSCHF’s
own representatives that the “base” of the Wavy Baby shoe before MSCHF’s
transformation was the Vans Old Skool. Id.
The court further concluded that the “sophistication of the buyers” factor
weighed in Vans’ favor because MSCHF advertised the Wavy Baby broadly in
conjunction with Tyga, sold the shoes directly to the general public, and shoes are
generally a common consumer item. Id. at 368–69.
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Moreover, the court concluded that the market proximity of the Wavy Baby
shoes and Vans’ Old Skool shoes enhanced the likelihood of consumer confusion.
Id. at 369. The court rejected MSCHF’s suggestion that the Wavy Baby shoes were
not, like Old Skool shoes, intended to be worn but were instead “collectible
work[s] of art,” that were “likely to be kept in glass cases or on shelves.” Id. In
rejecting MSCHF’s claim, it pointed to statements of MSCHF’s own representative,
the quantity of shoes produced (4,306 pairs), and the fact that MSCHF held back
some shoes in case the shoes shipped were the wrong size, thereby suggesting the
Wavy Baby is to be worn. Id.
The district court rejected MSCHF’s contention that Wavy Baby, as a parodic
work of artistic expression, was subject to special First Amendment protections
rather than the traditional likelihood of confusion test. Id. at 370–71. The court
acknowledged that courts have “accorded considerable leeway to parodists whose
expressive works aim their parodic commentary at a trademark or a trademarked
product,” but emphasized that they “have not hesitated to prevent a manufacturer
from using an alleged parody of a competitor’s mark to sell a competing product.”
Id. at 370 (quoting Harley Davidson, Inc. v. Grottanelli, 164 F.3d 806, 812 (2d Cir.
1999)). Moreover, the court observed that even while purporting to represent “the
original,” a successful parody must simultaneously convey “that it is not the
14
original and is instead a parody.” Id. (emphasis added) (quoting Cliffs Notes, Inc.
v. Bantam Doubleday Dell Publ’g Grp., Inc., 886 F.2d 490, 494 (2d Cir. 1989)). The
court concluded that the Wavy Baby shoes on their face did not clearly indicate to
the ordinary observer that MSCHF is “not connected in any way with the owner
of the target trademark.” Id. at 370–71 (quoting Louis Vuitton Malletier, S.A. v. My
Other Bag, Inc., 156 F. Supp. 3d 425, 435 (S.D.N.Y. 2016), aff’d, 674 F. App’x 16 (2d
Cir. 2016)).
For these reasons, the district court granted Vans’ motion for a temporary
restraining order and preliminary injunction, prohibiting MSCHF from
advertising or fulfilling orders for the Wavy Baby shoes, and ordering MSCHF to
cancel any orders that had been placed for the shoes at the time of the court’s order,
and to escrow the funds received from orders that could not be reversed. MSCHF
appealed.
DISCUSSION
On appeal, MSCHF argues that the district court erred in concluding that
Vans was likely to succeed on the merits of its trademark infringement claim
because Vans’ claims are precluded by the First Amendment. For the same reason,
MSCHF argues that the district court’s injunction prohibiting Vans from
advertising the Wavy Baby shoes amounts to an unconstitutional prior restraint of
15
speech. Finally, MSCHF argues that the district court erred in requiring it to
escrow all revenues from Wavy Baby sales, and in failing to require Vans to give
security.
After considering the applicable standard of review, we consider each
argument in turn.
I. Standard of Review
We review a district court’s grant of a temporary restraining order (“TRO”)
or preliminary injunction for abuse of discretion. See Sunward Electronics, Inc. v.
McDonald, 362 F.3d 17, 24 (2d Cir. 2004). “An abuse of discretion may be found
when the district court relies on clearly erroneous findings of fact or on an error of
law in issuing the injunction.” Cliffs Notes, 886 F.2d at 493 (citation omitted).
Although we review a district court’s grant of a preliminary injunction for
abuse of discretion, Citigroup Glob. Mkts., Inc. v. VCG Special Opportunities Master
Fund Ltd., 598 F.3d 30, 34 (2d Cir. 2010), any “allegations of error in a preliminary
injunction [that] involve questions of law” are reviewed without deference. Briggs
v. Bremby, 792 F.3d 239, 241 (2d Cir. 2015) (citing Am. Express Fin. Advisors Inc. v.
Thorley, 147 F.3d 229, 231 (2d Cir. 1998)).
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II. Trademark Infringement, the First Amendment, and Wavy Baby
To evaluate whether the district court abused its discretion in concluding
that Vans was likely to succeed on its infringement claims, we must first
determine whether Wavy Baby is subject to trademark law’s traditional
likelihood of confusion analysis or whether it is an expressive work entitled to
heightened First Amendment scrutiny under Rogers v. Grimaldi, 875 F.2d 994 (2d
Cir. 1989). We begin with an overview of the two frameworks before addressing
the Supreme Court’s recent guidance in Jack Daniel’s, applying the lessons of that
decision to this case, and evaluating the district court’s application of the Polaroid
factors.
A. The Lanham Act
The Lanham Act defines a trademark as “any word, name, symbol, or
device, or any combination thereof” that a manufacturer uses to distinguish the
manufacturer’s goods from those manufactured or sold by others and to “indicate
the source of the goods.” 15 U.S.C. § 1127. As the Jack Daniel’s Court observed, a
trademark “enables customers to select ‘the goods and services that they wish to
purchase, as well as those they want to avoid.’” Jack Daniel’s, 599 U.S. at 146
(quoting Matal v. Tam, 582 U.S. 218, 224 (2017)). A trademark holder “derive[s]
significant value from its marks” because such marks “ensure that the producer
17
itself—and not some ‘imitating competitor’—will reap the financial rewards
associated with the product’s good reputation.” Id. (citing Qualitex Co. v. Jacobson
Prods. Co., 514 U.S. 159, 164 (1995)).
To prevail on a trademark infringement claim under the Lanham Act, the
plaintiff must show that: (1) plaintiff owns a valid protectable mark; and (2)
defendant’s use of a similar mark is likely to cause consumer confusion as to the
origin or association of the goods or services. See Christian Louboutin S.A. v. Yves
Saint Laurent Am. Holdings, 696 F.3d 206, 216–17 (2d Cir. 2012). MSCHF does not
challenge the district court’s conclusion that Vans owns valid and protectable
marks in its Old Skool shoes; in any case, Vans’ marks are registered, which is
prima facie evidence that they are valid and protectable. See Matal v. Tam, 582 U.S.
218, 226–27 (2017). Accordingly, the focus of our inquiry on appeal is the second
prong: likelihood of consumer confusion.
This Court applies the eight-factor test identified in Polaroid, 287 F.2d at 495,
to assess the likelihood that an allegedly infringing product will create consumer
18
confusion. 3 The eight factors are: (1) strength of the trademark; (2) similarity
between the two marks; (3) proximity of the products and their competitiveness
with one another; (4) likelihood the prior owner may “bridge the gap” in the
markets for their products; (5) evidence of actual consumer confusion; (6) the
defendant’s good faith in adopting its imitative mark; (7) quality of the defendant’s
product compared with the plaintiff’s product; and (8) sophistication of the
buyers. Id. Collectively, these factors establish whether the allegedly infringing
product creates consumer confusion.
B. The Rogers Test
The traditional infringement inquiry may be applied more narrowly if the
allegedly infringing good or service is a work of “artistic expression.” See Rogers,
875 F.2d at 1000. In Rogers, this Court held that the Lanham Act should not apply
to “artistic works” as long as the defendant’s use of the mark is (1) artistically
relevant to the work, and (2) not “explicitly misleading” as to the source or content
of the work. Id. at 999; see also Twin Peaks Prods., Inc. v. Publ’ns Int’l, Ltd, 996 F.2d
3Other circuits apply balancing tests that are substantially the same. See, e.g., Louis Vuitton
Malletier S.A. v. Haute Diggity Dog, LLC, 507 F.3d 252, 259–63 (4th Cir. 2007) (applying the
Pizzeria Uno factors as articulated in Pizzeria Uno Corp. v Temple, 747 F.2d 1522, 1527 (4th Cir.
1984)); Brookfield Commc’ns, Inc. v. West Coast Ent. Corp., 174 F.3d 1036, 1054 (9th Cir. 1999)
(applying the Sleekcraft factors as articulated in AMF Inc. v. Sleekcraft Boats, 599 F.2d 341, 348–49
(9th Cir. 1979)).
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1366, 1379 (2d Cir. 1993) (requiring the likelihood of confusion to be “particularly
compelling” to outweigh the First Amendment concerns).
Although Rogers involved a dispute over a film title, lower courts adopting
Rogers have applied its test to other kinds of works but have “confined it to similar
cases, in which a trademark is used not to designate a work’s source, but solely to
perform some other expressive function.” Jack Daniel’s, 599 U.S. at 154. Courts in
this Circuit have been careful to apply Rogers to a limited category of expressive
works, including the title and cover of books and magazines, see, e.g., Rogers, 875
F.2d at 1001–02 (film title); Twin Peaks, 996 F.2d at 1379–80 (book title); Cliffs Notes,
886 F.2d at 495 (book title), and the use of trademarked products in feature films
and video games, see, e.g., Louis Vuitton Malletier S.A. v. Warner Bros. Ent. Inc., 868
F. Supp. 2d 172, 178 (S.D.N.Y. 2012) (film); AM Gen. LLC v. Activision Blizzard, Inc.,
450 F. Supp. 3d 467, 479–80 (S.D.N.Y. 2020) (video game).
C. Jack Daniel’s
The Supreme Court’s recent decision in Jack Daniel’s clarified when the
Rogers test, and its heightened First Amendment protections, does not apply: when
the allegedly infringing mark is used as a source identifier—that is, “as a
designation of source for [the alleged infringer’s] own goods.” 599 U.S. at 153.
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Jack Daniel’s is a case “about dog toys and whiskey.” Id. at 144. Respondent
VIP Products created a dog toy called “Bad Spaniels” that was designed to look
like a bottle of Jack Daniel’s whiskey, with some playful changes. See id. For
example, VIP Products changed “Jack Daniel’s” to “Bad Spaniels,” “Old No. 7
Brand Tennessee Sour Mash Whiskey” to “The Old No. 2 On Your Tennessee
Carpet,” and “40% alc. by vol. (80 proof)” to “43% poo by vol.” and “100% smelly.”
Id. at 149–50. Jack Daniel’s did not appreciate the joke.
The central question before the Supreme Court was whether the Rogers test
should have applied to Jack Daniel’s trademark infringement claims against VIP
Products, where VIP Products’ Bad Spaniels dog toy (the allegedly infringing
product) was an expressive or parodic work. 4 Though the Court acknowledged
that parodies are inherently expressive, it concluded that Rogers does not apply
when the alleged infringer uses trademarks to designate source. Id. at 153 (“[W]e
hold that [Rogers] does not [apply] when an alleged infringer uses a trademark in
the way the Lanham Act most cares about: as a designation of source for the
infringer’s own goods.”).
4Some sister circuits have adopted the Rogers test. See, e.g., Mattel, Inc. v. MCA Records, Inc., 296
F.3d 896, 902 (9th Cir. 2002) (adopting Rogers test); Westchester Media v. PLR USA Holdings, Inc.,
214 F.3d 658, 665 (5th Cir. 2000) (noting that Fifth Circuit has adopted the approach in Rogers).
The Supreme Court expressly used the Rogers test as a proxy for any threshold First
Amendment filter in the Lanham Act context. Jack Daniel’s, 599 U.S. at 153 n.1.
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The Court explained that, historically, Rogers has been confined to cases
where the trademark is not used to designate a work’s source, and instead is used
“solely to perform some other expressive function.” Id. at 154 (emphasis added).
In contrast, the use of another’s trademark that “convey[s] information (or
misinformation) about who is responsible for a product . . . ‘implicates the core
concerns of trademark law’ and creates ‘the paradigmatic infringement case.’” Id.
at 157 (alterations adopted) (citation omitted).
Moreover, the Court declined to adopt the Ninth Circuit’s holding that
Rogers applied to all “expressive work[s].” Id. at 151–52. It reasoned that such an
expansive read of Rogers would “conflict with courts’ longstanding view of
trademark law,” as “few cases would even get to the likelihood-of-confusion
inquiry if all expressive content triggered the Rogers filter.” Id. at 158–59. Because
the Court concluded that VIP Products used its Bad Spaniels “trademark and trade
dress as source identifiers of its dog toy,” it held that Rogers did not apply to Jack
Daniel’s claims of infringement. Id. at 159–61 (internal citation omitted).
Far from disregarding the parodic nature of the Bad Spaniel’s toy, however,
the Supreme Court noted that “a trademark’s expressive message—particularly a
parodic one . . . — may properly figure in assessing the likelihood of confusion.”
Id. at 161; see also id. at 159 (noting that “the likelihood-of-confusion inquiry does
22
enough work to account for the interest in free expression”). This is because,
where a message of “ridicule or pointed humor” is clear, “a parody is not often
likely to create confusion” for “consumers are not so likely to think that the maker
of a mocked product is itself doing the mocking.” Id. at 161, 153; see id. at 161
(“[A]lthough VIP’s effort to ridicule Jack Daniel’s does not justify use of the Rogers
test, it may make a difference in the standard trademark analysis.”).
D. MSCHF’s Use of Vans’ Marks as Source Identifiers
The Supreme Court’s decision in Jack Daniel’s forecloses MSCHF’s argument
that Wavy Baby’s parodic message merits higher First Amendment scrutiny under
Rogers. As the Court held, even if a defendant uses a mark to parody the
trademark holder’s product, Rogers does not apply if the mark is used “‘at least in
part’ for ‘source identification.’” Id. at 156 (quoting Tommy Hilfiger Licensing, Inc.,
v. Nature Labs, LLC, 221 F. Supp. 2d 410, 414–15 (S.D.N.Y. 2002)).
Here, MSCHF used Vans’ marks in much the same way that VIP Products
used Jack Daniel’s marks—as source identifiers. As discussed above and
illustrated below, VIP Products used the Jack Daniel’s bottle size, distinctive
squared-off shape, and black and white stylized text to invoke an image of Jack
Daniel’s famous whiskey bottle.
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Jack Daniel’s, 599 U.S. 148–49.
Likewise, MSCHF’s design evoked myriad elements of the Old Skool
trademarks and trade dress. Among other things, MSCHF incorporates, with
distortions, the Old Skool black and white color scheme, the side stripe, the
perforated sole, the logo on the heel, the logo on the footbed, and the packaging.
See Part I, above. MSCHF included its own branding on the label and heel of the
Wavy Baby sneaker, just as VIP Products placed its logo on the toy’s hangtag. But
even the design of the MSCHF logo evokes the Old Skool logo. And unlike VIP
Products, MSCHF did not include a disclaimer disassociating it from Vans or Old
Skool shoes. See Jack Daniel’s, 599 U.S. at 150 (noting the dog toy included a
disclaimer that read: “This product is not affiliated with Jack Daniel Distillery”).
A trademark is used as a “source identifier” when it is used “to identify or
brand a defendant’s goods or services” or to indicate the “‘source or origin’ of a
24
product.” Id. at 156 (alterations adopted). MSCHF used Vans’ trademarks—
particularly its red and white logo—to brand its own products, which constitutes
“quintessential ‘trademark use’” subject to the Lanham Act. Id. at 155 (citation
omitted); see also Harley-Davidson, Inc. v. Grottanelli, 164 F.3d 806, 812–13
(mechanic’s use of Harley-Davidson’s bar and shield motif in his logo, despite
the “humorous[]” message, was traditional trademark use subject to the
likelihood of confusion analysis).
Moreover, although MSCHF did not purport to sell the Wavy Baby under
the Vans brand, it admitted to “start[ing]” with Vans’ marks because “[n]o other
shoe embodies the dichotomies—niche and mass taste, functional and trendy,
utilitarian and frivolous—as perfectly as the Old Skool.” Jt. App’x at 353. In
other words, MSCHF sought to benefit from the “good will” that Vans—as the
source of the Old Skool and its distinctive marks—had generated over a decades-
long period. See Jack Daniel’s, 599 U.S. at 156. Notwithstanding the Wavy Baby’s
expressive content, MSCHF used Vans’ trademarks in a source-identifying
manner. Accordingly, the district court was correct when it applied the
traditional likelihood-of-confusion test instead of applying the Rogers test.
25
E. Application of the Polaroid Factors
Having determined that the district court did not err in declining to apply
the Rogers test in evaluating Vans’ claims, we consider whether the district court
erred in its conduct of the traditional likelihood-of-confusion analysis. 5 We review
the district court’s overall likelihood-of-confusion determination without
deference. “[I]nsofar as the determination of whether one of the Polaroid factors
favors one party or another involves a legal judgment—which it often does—” we
review that determination without deference to the district court. Souza v. Exotic
Island Enterprises, 68 F.4th 99, 109 (2d Cir. 2023) (alteration adopted). And we
review the district court’s factual findings for clear error. See RiseandShine Corp. v.
PepsiCo, Inc., 41 F.4th 112, 119 (2d Cir. 2022).
We agree with the district court’s assessment that Vans is likely to prevail
on the issue of whether the Wavy Baby causes consumer confusion. Like the
district court, we consider the factors identified in Polaroid in considering whether
MSCHF’s Wavy Baby is likely to cause consumer confusion as to the source of the
shoe. Polaroid, 287 F.2d at 495.
5We disagree with Vans’ argument that the likelihood-of-confusion analysis is not before us.
See Vans FRAP 28(j) Letter (June 20, 2023) at 1–2. Although the core of MSCHF’s argument on
appeal is that the district court erred in failing to apply Rogers, part of MSCHF’s opening brief
challenges the district court’s Polaroid analysis. See Appellant Br. at 42–60. Although its
argument has evolved slightly post-Jack Daniel’s, it was adequately preserved.
26
The strength of the marks at issue supports Vans. MSCHF expressly chose
the Old Skool marks and dress because it was the “most iconic, prototypical” skate
shoe there is, as conceded by MSCHF’s co-Chief Creative Officer. Jt. App’x at 353,
¶ 24.
The similarity of the marks presents a closer question, as the marks on Wavy
Baby, while derived from the Old Skool shoes, are distorted. But MSCHF’s
creative officer, Lukas Bentel, admitted that the Wavy Baby sneaker design
intentionally evoked an image of Vans’ Old Skool sneaker. See S. App’x at 8–9
(“Yes, [Vans Old Skools] are the anchor of the shoe . . . .“); see also Harley-Davidson,
164 F.3d at 812–13 (concluding, in part, because defendant “admits that his use of
[Harley Davidson’s] bar-and-shield logo purposefully suggests an association
with Harley,” such use was impermissible under the Lanham Act. (internal
quotation marks omitted)).
This admission is embodied in the Wavy Baby design: the Wavy Baby
features a combination of elements (e.g., a three-tiered appearance, textured toe
box, visible stitching, and red tags on the back), which are placed relative to one
another such that the Wavy Baby’s appearance evokes Vans’ Old Skool sneaker.
27
Plus, context matters. Though Vans has never warped its design in the same
“liquified” or “microwaved” manner as MSCHF’s work with the Wavy Baby,6
Vans has previously created special editions of its Old Skool sneaker often
collaborating in launching the sneakers with celebrities and high-profile brands
including Marc Jacobs, Supreme, Stussy, Kenzo, The North Face, and Disney. Jt.
App’x at 257–58, ¶ 12.
The admittedly mimicked features of the Wavy Baby, combined with Vans’
history of collaborating with artists and other brands, support our conclusion that
the “similarity” factor favors Vans.
In considering competitive proximity, we are concerned with “‘whether and
to what extent the two products compete with each other’ and ‘the nature of the
products themselves and the structure of the relevant market.’” Morningside Grp.
Ltd. v. Morningside Capital Grp., 182 F.3d 133, 140 (2d Cir. 1999) (quoting Cadbury
Beverages, Inc. v. Cott Corp., 73 F.3d 474, 480 (2d Cir. 1996)). “Among the
considerations germane to the structure of the market are the class of customers to
whom the goods are sold, the manner in which the products are advertised, and
the channels through which the goods are sold.” Cadbury Beverages, 73 F.3d at 480.
6MSCHF describes the Wavy Baby as a “‘liquified’ version of a classic skate shoe silhouette.” Jt.
App’x at 501.
28
The district court did not clearly err in rejecting MSCHF’s factual claim that
the Wavy Baby is a work of art meant to be displayed rather than a pair of sneakers
meant to be worn. Although it is hard to see why some people would wear the
Wavy Baby as a functional shoe, we owe that finding deference. Many people are
martyrs to fashion and dress to excite comment.
Considering the Wavy Baby as a wearable sneaker, we agree with the
district court that the shoes are relatively proximate. MSCHF advertised the Wavy
Baby as a wearable piece of footwear in promotional social media posts and in the
promotional music video featuring Tyga. Vans’ own Old Skool limited releases
are often sold on the same secondary platforms as those that sell Wavy Baby shoes
to sneakerheads. Jt. App’x at 854. And where the Wavy Baby sold 4,306 units as
a limited-edition collaboration with Tyga at $220 per pair, Vans offers special
editions of its Old Skool sneakers made in collaboration with celebrities or artists,
sometimes selling for $180 per pair, and often selling a limited edition of 4,000
units. Id. at 785, 813, 893. Because we conclude that the products are competitively
proximate, we need not consider whether Vans may “bridge the gap” by
developing a product in MSCHF’s market.
The district court did not clearly err in finding actual evidence of consumer
confusion, and we conclude as a matter of law that this factor favors Vans. The
29
district court relied on evidence in the record that customers were actually
confused. For example, it pointed to comments made on a sneaker-centric podcast
with guest appearance by MSCHF’s chief creative officer, Lukas Bentel. Bentel
acknowledged the host’s comment that “[e]veryone [the host has] spoken to
about” the Wavy Baby agrees that if a person saw someone wearing Wavy Baby
sneakers on the street, “they’d say they’re wearing a pair of Vans.” Vans, 602 F.
Supp. 3d at 368; Complex Sneakers Podcast Recording at 31:16–33:46.
It may be true that consumers who purchase the Wavy Baby shoes directly
from MSCHF and receive the accompanying “manifesto” explaining the genesis
of the shoes may not be confused. But the Lanham Act protects against several
categories of consumer confusion, “including point-of-sale confusion . . . initial
interest confusion, . . . and post-sale confusion.” Louis Vuitton Malletier v. Burlington
Coat Factory Warehouse Corp., 426 F.3d 532, 537 n.2 (2d Cir. 2005) (emphases in
original) (internal citations omitted); see also Lois Sportswear, U.S.A., Inc. v. Levi
Strauss & Co., 799 F.2d 867, 872–73 (2d Cir. 1986) (explaining that “post-sale
confusion would involve consumers seeing appellant’s [product] outside of the
retail store, perhaps being worn by a passer-by” and that “in this post-sale context
appellants’ labels, most of which having been long since discarded, will be of no
help”). The comments relied upon by the district court demonstrate both initial
30
and post-sale confusion. The district court’s factual finding of actual consumer
confusion was not clearly erroneous, and its conclusion that this factor favors Vans
was legally correct.
The district court’s finding that the Wavy Baby sneakers are lower quality
shoes is not clearly erroneous, though we do not embrace the district court’s legal
conclusion that this factor favors Vans. In comparing the quality of MSCHF’s
product to that of the Old Skool sneaker, the district court found “particular
deficiencies” in the Wavy Baby sneakers that demonstrated a lower quality shoe.
Vans, 602 F. Supp. 3d at 369. The Wavy Baby’s stylized bottom may create
instability where a skate shoe should be stable—a fact that is conceded by MSCHF.
See id. at 368 (“[I]f you put them on and walked around, you’ll see this is not the
greatest foot-feeling shoe.”); see also Jt. App’x at 286 (MSCHF acknowledging itself
that “[i]t is difficult to walk in Wavy Baby for long distances . . . and they cannot
safely be worn to walk down stairs”); Jt. App’x at 362 (“[T]hey cannot be worn as
an actual sneaker.”); Jt. App’x at 501–02 (“We took a functional, iconic skate shoe
and made it a non-functional—or at least ‘non-functional’ relative to the ways
sneakers traditionally function.”). The district court’s finding that the Wavy Baby
is a lower quality skate shoe is not clearly erroneous.
31
We are skeptical, however, that the Wavy Baby’s inferior quality as a skate
shoe weighs in favor of Vans. The Wavy Baby’s primary purpose is to convey a
message or fashion statement rather than to serve as a functional shoe. It seems
unlikely that consumers would expect the Wavy Baby—a shoe with an obviously
uneven sole—to be as comfortable or functional as the Old Skool. But even if the
district court erred by weighing this factor in Vans’ favor, this one factor does not
change our conclusion that Vans is likely to prevail on the merits of its trademark
infringement claim. Accord Nabisco, Inc. v. Warner-Lambert Co., 220 F.3d 43, 46 (2d
Cir. 2000) (“The evaluation of the Polaroid factors is not a mechanical process where
the party with the greatest number of factors weighing in its favor wins. Rather,
a court should focus on the ultimate question of whether consumers are likely to
be confused.” (citation omitted)).
Finally, the district court was correct to conclude that sophistication of the
buyers also favored Vans. MSCHF engaged in broad advertising to the “general
public,” and customers of sneakers are not professional buyers. 7
The fact that the Wavy Baby was conceived as a parody does not change
that assessment. The Wavy Baby is a parody, just not one entitled to protection
7The district court made no finding with respect to MSCHF’s good faith and we do not rely on
this factor in our own Polaroid analysis.
32
under Rogers. As noted above, to succeed, a parody must create contrasts with the
subject of the parody so that the “message of ridicule or pointed humor comes
clear.” Jack Daniel’s, 599 U.S. at 161. If that is done, “a parody is not often likely to
create confusion.” Id. But if a parodic use of protected marks and trade dress
leaves confusion as to the source of a product, the parody has not “succeeded” for
purposes of the Lanham Act, and the infringement is unlawful.
For these reasons, we conclude that the Wavy Baby does create a likelihood
of consumer confusion, and the district court correctly concluded that Vans is
likely to prevail on the merits. It did not exceed its discretion by enjoining
MSCHF’s marketing and sale of the Wavy Baby. 8
8 MSCHF’s opening brief also argues that the district court’s injunction was an unconstitutional
prior restraint on MSCHF’s expression. Generally, if a product is found to infringe, preliminary
injunctions under the Lanham Act are not considered prior restraints. See Dallas Cowboys
Cheerleaders, Inc. v. Pussycat Cinema, Ltd., 604 F.2d 200, 206 (2d Cir. 1979) (holding that an
injunction pursuant to the Lanham Act was not a prior restraint because trademark
infringement implicated property rights, not speech rights); see also Dr. Seuss Enterprises, L.P. v.
Penguin Books USA, Inc., 109 F.3d 1394 (9th Cir. 1997) (upholding a preliminary injunction even
for noncommercial speech); Deceptive Commercial Speech, 6 McCarthy on Trademarks and
Unfair Competition § 31:142 (5th ed.) (“[T]he prior restraint prohibition does not apply to most
trademark preliminary injunctions. . . .”). MSCHF’s argument that the preliminary injunction
was an unlawful prior restraint piggybacks on its argument that the district court’s assessment
of Vans’ likelihood of prevailing on the merits failed to properly account for First Amendment
concerns, and thus fails for the same reasons.
33
III. Escrow Order
MSCHF argues that the district court exceeded its discretion in ordering it
to escrow all of its revenues from the Wavy Baby sales it had completed.
Specifically, the district court ordered MSCHF, for any purchase that could not be
reversed and/or cancelled, to escrow “any funds received from all orders taken to
date for the Prohibited Shoes so that, if Vans prevails in this action, [MSCHF] may
return those funds to customers who ordered [MSCHF’s] Prohibited Shoes under
the mistaken belief that Vans was the source of the shoes or otherwise approved
or sponsored the shoes.” Vans, 602 F. Supp. 3d at 373. MSCHF contends that an
order to escrow net profits might make sense if necessary to ensure the availability
of funds to provide the plaintiff’s requested equitable relief, but not an order to
escrow gross revenues.
We disagree. Under 15 U.S.C. § 1117, Vans is entitled to MSCHF’s profits,
damages, and attorneys’ fees if it establishes trademark infringement under the
Lanham Act. In assessing profits, the plaintiff is required to prove the defendant’s
sales only; the defendant must prove all elements of cost or deduction claimed.
See 15 U.S.C. § 1117(a). And, this Court has held that “district courts have the
authority to issue a prejudgment asset restraint injunction in favor of plaintiffs
34
seeking an accounting against allegedly infringing defendants in Lanham Act
cases.” Gucci Am., Inc. v. Weixing Li, 768 F.3d 122, 132 (2d Cir. 2014).
In this case, Vans has sought an accounting. Moreover, MSCHF has not
established its costs of production. Under these circumstances, we cannot
conclude that the district court exceeded its discretion when it ordered MSCHF to
essentially freeze its revenues from the Wavy Baby. We express no opinion as to
the propriety of the ultimate relief the district court suggested in its order—
refunds to consumers—and uphold the district court’s order without prejudice to
MSCHF’s ability to renew its arguments before the district court on remand.
IV. Bond Determination
MSCHF’s final claim is that the district court erred under Fed. R. Civ. P. 65(c)
by failing to either require Vans to post security or to find, expressly, that no
security was required. Vans argues that MSCHF waived this challenge by failing
to seek a bond determination before the district court.
Under Rule 65(c), before issuing a preliminary injunction, the court must
order the moving party to provide a security (“post bond”) in an amount the court
determines would cover damages sustained in the event a party has been
wrongfully enjoined. See Fed. R. Civ. P. 65(c) (“The court may issue a preliminary
injunction or a temporary restraining order only if the movant gives security in an
35
amount that the court considers proper to pay the costs and damages sustained by
any party found to have been wrongfully enjoined or restrained.”).
But where the party opposing an injunction does not request security, the
district court does not err in failing to order it. See Clarkson Co., Ltd. v. Shaheen, 544
F.2d 624, 632 (2d Cir. 1976). In Clarkson we ruled that, “[b]ecause no request for a
bond was ever made in the district court, and because, under Fed. R. Civ. P. 65,
the amount of any bond to be given upon the issuance of a preliminary injunction
rests within the sound discretion of the trial court, . . . the district court may
dispense with the filing of a bond.” Id. (internal citations omitted).
We reject MSCHF’s suggestion that our decision in Corning Inc. v. PicVue
Electronics., Ltd., 365 F.3d 156 (2d Cir. 2004), overrules or limits our holding in
Clarkson. In Corning, we said, “While it might have been within the discretion of
the district court to decide that, under the circumstances, no security was required,
. . . the district court was required to make this determination before it entered the
preliminary injunction.” Id. at 158 (internal citation omitted). Nothing in Corning
suggests that its holding applies even if the enjoined party never requested security.
Accordingly, we conclude the district court did not err in failing to require security
from Vans. Nothing in our analysis precludes MSCHF from seeking security
pursuant to Fed. R. Civ. P. 65(c) in the district court.
36
CONCLUSION
For the reasons discussed above, we AFFIRM the district court’s grant of
the preliminary injunction and the temporary restraining order.
37