Trademarks protect against consumer confusion. But the First Amendment protects speech even when it may result in some confusion. When these two principles intersect, trademark holders may be surprised to find that the First Amendment often wins. In three March 31 decisions, courts sided with First Amendment freedom of expression over commercial claims alleging violation of trademark and publicity rights.
AM General LLC v. Activision Blizzard, Inc. (S.D.N.Y. March 31, 2020): A federal district court in New York recently held that videogame maker, Activision Blizzard, Inc., can depict AM General’s vehicle—known as the “Humvee”—in its “Call of Duty” videogame without infringing upon the trademark rights of the military vehicle’s manufacturer. A federal judge ruled that use of the Humvees in the video game was warranted, as Activision’s goal was to create a realistic experience for its players. The New York court applied what is referred to as the Rogers test. Originally developed to balance the rights of authors of expressive works against persons’ rights to control use of their names in titles of such works, the two-prong test formulated in Rogers v. Grimaldi asks two questions to determine whether a Lanham Act claim brought against an expressive work outweighs a First Amendment defense: (1) Does the work’s use of a trademark or personal likeness have some artistic relationship to the work, and (2) does that use explicitly mislead consumers?
Considering the first prong, the court held that Activision’s use of Humvees in its Call of Duty games had artistic relevance. The court explained that “[f]eaturing actual vehicles used by military operations around the world in video games about simulated modern warfare surely evokes a sense of realism and lifelikeness to the player.” As to the second prong, the court held that Activision’s use of Humvees was not explicitly misleading. The court further noted that “an artistically relevant use will outweigh a moderate risk of confusion where the contested user offers a ‘persuasive explanation’” why the use was integral to the artistic expression rather than a willful attempt to trade on the mark holder’s goodwill. In this case, enhancement of the game’s realism is a sufficient explanation.
The court also found that plaintiff failed to demonstrate a likelihood of confusion in connection with its trade dress infringement claim. To successfully bring a claim for trade dress infringement involving the appearance of a product, a party must allege that (1) the claimed trade dress is non-functional, (2) the claimed trade dress has acquired distinctiveness as a source-indicating brand, and (3) there is a likelihood of confusion between the plaintiff’s goods and the defendant’s. The court held that “[g]iven the improbability of confusion between a vehicle and a video game—or, in the case of the contested toys, between a plastic figurine and a full-blown military machine” the likelihood of confusion prong was not met. This part of the court’s analysis is troubling, since the likelihood of confusion the Lanham Act seeks to avoid is not confusion between products but confusion as to source, sponsorship, or affiliation—that is, confusion not between AMG’s vehicles and Activision Blizzard’s animated replicas, but as to whether AMG was affiliated with Activision Blizzard, or sponsored or endorsed the “Call of Duty” computer game.
The court also found that AMG failed demonstrate a valid claim for trademark dilution. AMG failed to show that the presence of Humvees in the video game would “tarnish or blur” the Humvee trademarks. The court stated that “to the extent that any dilution might occur, it must be tolerated in the interest of maintaining broad opportunities for expression.” Click here for the full opinion.
Pellegrino v. Epic Games, Inc., No. 19-1806 (E.D. Pa. March 31, 2020): On the same day, a federal district court in Pennsylvania dismissed all but one of a handful of claims professional saxophonist Pellegrino brought against a videogame maker’s replication of his dance moves as an “emote” in its “Fortnite Battle Royale” game. Unless Pellegrino’s sole remaining claim for false endorsement succeeds, Epic Games is free to use the “Phone It In” dance move Pellegrino performed in a 2017Google Pixel 2 phone commercial. Pellegrino claimed that Epic Games misappropriated his likeness by using his “signature move” in the video game without his consent. The court applied the Transformative Use Test, under which “the First Amendment protections enjoyed by an expressive work will outweigh a celebrity plaintiff’s interests in his likeness if the product containing the celebrity’s likeness is so transformed that it has become primarily the defendant’s own expression rather than the celebrity’s likeness.” The court held that the videogame’s depiction is transformative because the digital avatars don’t look like Pellegrino and perform different functions, as they are warriors and not musicians. Thus, the First Amendment bars Pellegrino’s right of publicity claim.
Additionally, Pellegrino claimed false designation of origin on the theory that Epic Games created the false impression that Epic created the plaintiff’s “signature move.” Pellegrino’s claim failed because “a claim that concerns the origin of an idea embodied in a tangible good is governed by copyright law, not the Lanham Act” and plaintiff had no copyright to assert.
Pellegrino bases his remaining claim for false endorsement on the allegation that Epic Games used his signature dance move to generate income by creating the false impression that Pellegrino endorsed the video game. Pellegrino, however, is unlikely to succeed on the outstanding claim, as he must meet the difficult standard of the Rogers Test by showing that the replicated dance move has “no artistic relevance to the underlying work” or “explicitly misleads as to the source” of the work. However, as we’ve noted before, a series of cases have denied First Amendment protection to videogame producers who use avatars of real athletes, so that outcome is not preordained. See the full opinion here.
VIP Products v. Jack Daniel’s Properties (Ninth Circuit, March 31, 2020): While the above two decisions are from trial courts (and thus may be appealed), the Ninth Circuit Court of Appeals the same day reversed a trial court verdict favoring trademark rights over First Amendment protections. VIP Products made a doggy toy called “Bad Spaniels Silly Squeaker” that resembled a bottle of Jack Daniel’s Old No. 7 Black Label Tennessee Whiskey, but with a humorous label that had the phrase “the Old No. 2, on your Tennessee Carpet.” When Jack Daniel’s threatened to sue, VIP sought a declaration that its dog toy did not infringe the Jack Daniel’s trademarks or trade dress. After a four-day trial, the trial court found that the dog toy did infringe Jack Daniel’s trademarks and trade dress and tarnished Jack Daniel’s famous trademarks, and enjoined VIP from continuing to sell the toy.
Reversing, the Ninth Circuit held the dog toy to be an “expressive work” entitled to First Amendment protection, and remanded to the trial court to require Jack Daniel’s to prove either that the defendant’s use of the mark is not relevant to the underlying work or explicitly misleads consumers as to the source or content of the work (i.e., the Rogers test). The Ninth Circuit further held that VIP’s use of the Jack Daniel’s trademark and trade dress was “noncommercial,” and thus could not dilute by tarnishment.
Ironically, the US Supreme Court has held in a number of recent decisions that trademarks themselves are speech entitled to protection. As noted in the original Rogers decision, it would be ironic if, in the name of the First Amendment, courts refuse to recognize the rights of mark holders to protect their creative works against infringement by others. Nonetheless, trademark law concerns itself with protecting consumers against confusion, not with protecting the creativity of trademark owners, so mark holders need to tread carefully when seeking to prevent another’s use of the mark in a manner that makes an expressive comment rather than engaging in commercial competition.
