On Tuesday, December 5, 2023, the U.S. Court of Appeals for the Second Circuit ruled in favor of Vans, a popular manufacturer of skateboarding shoes and apparel, blocking sales of art collective MSCHF’s Wavy Baby sneakers, a purported parody of Vans’ Old Skool shoes.
Vans was founded in 1966. The Old Skool line of shoes is one of Vans’ most popular shoes. “[T]he Old Skool is an iconic Vans sneaker, easily recognizable by both ‘sneakerheads’ and the uninitiated.” MSCHF is a Brooklyn-based art collective that “recontextualizes everyday objects as a means of commenting on contemporary society.” MSCHF’s work has been displayed in prominent museums, art galleries, auctions houses, and art shows across the world. The Wavy Baby shoe started as a concept based on the Old Skool “because no other shoe embodies the dichotomies between ‘niche and mass taste, functional and trendy, utilitarian and frivolous’ as perfectly as the Old Skool.” The Wavy Baby “destroys the original premise of the Old Skool’s popularity – its utility as a skateboarding shoe due to its flat sole.” The shoe itself “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.”
Vans sent a cease and desist letter to MSCHF on April 6, 2022, after learning of the impending release of the Wavy Baby shoe. That letter put MSCHF on notice that Vans claimed the Wavy Baby shoe infringed on their trademark and trade dress. MSCHF released 4,306 pairs of the Wavy Baby shoes on April 18, 2022. Vans filed a lawsuit in the U.S. District Court for the Eastern District of New York on April 14, 2022, alleging six claims under state and federal law. Vans requested a temporary restraining order and preliminary injunction, asking the court to enjoin MSCHF from (1) fulfilling orders or selling further Wavy Baby shoes; (2) using Vans’ trade dress, trademarks, or confusingly similar marks; (3) referring to or using any prohibited trademarks in advertising, marketing, or promotion; and (4) aiding any other person or entity in taking prohibited actions. The district court granted the temporary restraining order and preliminary injunction, which MSCHF appealed to the U.S. Court of Appeals for the Second Circuit.
In its appeal, MSCHF made three arguments: (1) the district court erred in concluding that Vans was likely to succeed on the merits of its trademark infringement claim since the claims are precluded by the First Amendment; (2) the injunction prohibiting advertisement of the Wavy Baby shoes amounts to an unconstitutional prior restraint of speech; and (3) the district court erred in requiring MSCHF to escrow all revenues from sales of the Wavy Baby, and in failing to require Vans to give security.
As to MSCHF’s first argument, the three judge panel turned to the U.S. Supreme Court’s recent decision in Jack Daniel’s Properties, Inc. v. VIP Products LLC, which clarifies “when the [Rogers v. Grimaldi] test [for artistic expression], 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.'” The three judge panel ruled that the decision in Jack Daniels “forecloses MSCHF’s argument that Wavy Baby’s parodic message merits higher First Amendment scrutiny under Rogers.” The panel likened MSCHF’s use of Vans’ trademarks to VIP Products’ use of Jack Daniel’s trademarks – as source identifiers. The panel further reviewed the district court’s likelihood-of-confusion analysis. The panel “agree[d] with the district court’s assessment that Vans is likely to prevail on the issue of whether the Wavy Baby causes consumer confusion.”
As to MSCHF’s second argument, the panel found that the district court properly concluded “that sophistication of the buyers also favored Vans. MSCHF engaged in broad advertising to the ‘general public,’ and consumers of sneakers are not professional buyers.” The fact that the Wavy Baby shoe was conceived as a parody did not alter this assessment, according to the panel. The parody shoe does not deserve protection under Rogers since the Wavy Baby does not create contrast with the Old Skool such that the “message of ridicule or pointed humor comes clear.” Thus, the panel found that the district court did not err in enjoining MSCHF’s marketing and sale of the Wavy Baby shoes.
As to MSCHF’s final argument, the panel disagreed 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.” The panel cited 15 U.S.C. § 1117 to rule that “Vans is entitled to MSCHF’s profits, damages, and attorneys’ fees if it establishes trademark infringement under the Lanham Act.” The panel ultimately held that “[u]nder these circumstances [where Vans has sought an accounting but MSCHF has not established its costs of production], we cannot conclude that the district court exceeded its discretion when it ordered MSCHF to essentially freeze its revenues from the Wavy Baby.” As to the security requirement portion of the argument, the panel stated that “where the party opposing an injunction does not request security, the district court does not err in failing to order it.”
Additional Reading
Vans wins appeal in bid to ban art collective’s ‘Wavy Baby’ shoes, Reuters (December 5, 2023)
Opinion in Vans, Inc. v. MSCHF Product Studio, Inc.
Vans, Inc. v. MSCHF Product Studio, Inc. (Case No. 22-1006)
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