In August, Vans, a globally-known footwear and apparel company, and MSCHF, a Brooklyn-based art collective, settled their trademark and trade dress dispute, entering an agreement that permanently enjoins and restrains MSCHF from continuing to advertise and sell its “Wavy Baby” shoes. As set out in the Consent Judgment and Permanent Injunction, Vans is the owner of various trademarks and trade dress (the “Vans Marks”), and MSCHF admits that it used versions of the Vans Marks and that such use constitutes trademark infringement. This decision follows a ruling from the Second Circuit Court of Appeals, in which the Second Circuit applied the Supreme Court’s reasoning in Jack Daniel’s v. VIP Products and found the Wavy Baby shoes were not entitled to enhanced constitutional protections under the First Amendment, despite some parodic characteristics.

The dispute arose from a collaboration between Defendant MSCHF and Michael Stevenson, who uses the stage name “Tyga,” to design, develop, and sell the “Wavy Baby” shoes, which Vans argued infringe Vans’ intellectual property rights. Specifically, in the complaint, filed April 2022, Vans argued that the Wavy Baby shoes and associated advertising infringe Vans’ trademarks and trade dress, including the trademarks and trade dress of Vans’ Old Skool shoes and packaging, as shown below.

Early in the case, the District Court for the Eastern District of New York granted Vans a temporary restraining order (TRO) and a preliminary injunction, finding that Vans established a likelihood of success on the merits of its infringement claims and demonstrated a likelihood of prevailing on the issue of consumer confusion (including by demonstrating actual confusion). The Court also found that Vans would suffer irreparable harm in the absence of a preliminary injunction and that the balance of equities weighed decidedly in Vans favor.

MSCHF’s primary argument in opposition to Vans’ motion for a TRO and preliminary injunction was that Vans would not likely succeed on the merits of its infringement claims because the Wavy Baby shoes are a parodic or artistic expression of Vans’ trademarks and trade dress and are thus protected by the First Amendment. The District Court rejected MSCHF’s arguments, finding that the Wavy Baby shoes do not meet the requirements for a successful parody, as they do not sufficiently articulate an “element of satire, ridicule, joking or amusement” that clearly indicates that the shoes are parody and that MSCHF is not connected to Vans. The Court noted that while the public has an interest in free expression, it also has a protectable interest in being free from confusion, deception, and mistake.

MSCHF appealed the District Court’s decision to the Second Circuit Court of Appeals, again advancing its argument that the Wavy Baby shoes are entitled to heightened protection under the First Amendment as parodic or artistic expression and alleging that the District Court’s preliminary injunction prohibiting MSCHF from advertising the Wavy Baby shoes amounted to an unconstitutional restraint of speech.

As explained in a prior Sunstein Insights article regarding the Jack Daniel’s v. VIP Products trademark dispute, the tension between First Amendment protection of expressive works and trademark protection of brands generated significant attention in the 2022-2023 timeframe. Multiple parties filed amicus briefs in both in the Wavy Baby case at the Second Circuit, and in the Jack Daniel’s case at the Supreme Court. Indeed, MSCHF itself filed an amicus brief with the Supreme Court in the Jack Daniels case. In supporting VIP Products, it argued that “[a]bsent a copyright, an artist can take pre-existing content, choose a medium, add their perspective, and sell their expression” and “[i]f the owners of iconic trademarks do not like the message, they may participate in the marketplace of ideas” and may respond to criticism and commentary with their own speech.

The Second Circuit stayed MSCHF’s appeal pending the Supreme Court’s consideration of Jack Daniel’s v. VIP Products. The Supreme Court held that the use of a First Amendment threshold inquiry is not appropriate when the allegedly infringing trademark is used to designate the source of the accused infringer’s own goods, even if there are some expressive qualities to the use.

After the parties submitted supplemental briefing on the impact of the Supreme’s Court decision, the Second Circuit became the first appellate court to apply the holding in Jack Daniel’s. The Second Circuit concluded that Jack Daniel’s forecloses MSCHF’s argument that the First Amendment protects Wavy Baby’s parodic message because MSCHF used Vans’ marks not just as a form of expression, but as source identifiers. Just as VIP Products used the Jack Daniel’s bottle size, distinctive shape, and black and white stylized text to evoke an image of Jack Daniel’s famous whiskey bottle, MSCHF used Van’s distortions, color scheme, side stripe, perforated sole, logo placement, and packaging to evoke an image of Vans’ shoes. The Second Circuit noted that even the MSCHF logo used on the label and heel of the shoe was styled to evoke Vans’ Old Skool logo. Because MSCHF used Vans’ trademarks to brand its own products, the Second Circuit found the use to be “quintessential trademark use” subject to the Lanham Act and the traditional likelihood-of-confusion analysis, and it affirmed the District Court’s decision.

In light of the Second Circuit’s decision, it may be unsurprising that the parties entered a settlement agreement and permanent injunction against MSCHF. While the Supreme Court in Jack Daniel’s did not eliminate use of a heightened threshold test for expressive works entitled to First Amendment protection, it made clear that using another’s trademark as a source identifier subjects the use to the standard likelihood-of-confusion analysis, regardless of whether there are some expressive or parodic aspects to the use. The impact of the Supreme Court’s decision is seen here in the resolution of the dispute between Vans and MSCHF, although the contours of the decision may continue to develop as artists and collectives continue to find new ways to express themselves.