Overview
In the 2023 Vans vs. MSCHF decision, the Second Circuit Court of Appeals ruled in favor of Vans, a known skateboarding footwear and apparel brand, against the New York art collective MSCHF. The case centered around MSCHF’s creation and sale of the “Wavy Baby” shoe (below left), a product that was seen as a distorted version of Vans’ iconic “Old Skool” shoe (below right) The Second Circuit’s decision may have significant implications for the balance between trademark protections and artistic freedom, setting a precedent in how parody and satire are treated in the context of trademark law.
The Parties
Founded in 1966, Vans is a Californian manufacturer of skateboarding shoes and related apparel founded. Vans is most widely known for its stylish footwear, which is traditionally used by athletes in the skateboarding, surfing, BMX, and motocross communities.
MSCHF is a Brooklyn-based art collective known for creating provocative and innovative products and art projects. MSCHF’s alleged mission is to use artwork “to start a conversation about consumer culture … by participating in consumer culture.” MSCHF is known for releasing high-profile, satirical art “drops,” including modified Nike shoes inspired by Lil Nas X.
The accused “Wavy Baby” shoe at issue
MSCHF operates by creating products that are sold in “drops” – i.e., a defined sales period. Prior to this case, MSCHF began focusing on what it called the “sneakerhead culture” who for hobby collect, trade, and display their shoe collection. MSCHF began critiquing the consumerism of the sneakerhead culture including the companies that collaborate with “anyone and everyone to make money.”
MSCHF therefore began designing a shoe aimed at the sneakerhead culture. During trial, MSCHF’s co-Chief Creative Officer explained that the “Wavy Baby concept started with a Vans Old Skool sneaker” because no other shoe embodies the dichotomies between “niche and mass taste, functional and trendy, utilitarian and frivolous” as perfectly as the Old Skool. So MSCHF’s design process started with an image of a classic Vans Old Skool shoe and a digital filter tool was used to “warp” the shoe into a new image that transformed the once iconic shoe into the modern, wobbly, and unbalanced realities.
The Second Circuit Decision
Vans argued MSCHF’s “Wavy Baby” shoes infringed upon their signature “Old Skool” shoe’s trade dress, as well as, its trademarked logo. Van’s asserted its “Old Skool” shoe included a combination of protected trade dress 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.
Vans contended MSCHF’s Wavy Baby shoe closely mimicked its Old Skool design, and that MSCHF purposely distorted its trademarked design using an “exceedingly wavy” design. MSCHF responded that the Wavy Baby shoe was a parody meant to critique sneakerhead culture and consumerism. MSCHF thereby argued its design was a form of “artistic expression” protected under the First Amendment.
MSCHF’s defense stemmed from the 1989 Rogers v. Grimaldi decision where the Second Circuit ruled the traditional trademark infringement inquiry may be more narrow when the work in question is one of “artistic expression.” Detrimental to MSCHF’s defense was the 2023 U.S. Supreme Court decision in Jack Daniel’s Properties, Inc. v. VIP Products LLC which analyzed and critiqued the scope of the Rogers test. In Jack Daniels, the Supreme Court clarified the heightened First Amendment protections do not apply when the allegedly infringing mark is used as a source identifier – or designation of source – for the alleged infringer’s own goods.
Applying the guidance from Jack Daniel’s, the Second Circuit found MSCHF’s use of Vans’ trademarks function as source identifiers. The court explained that a trademark can be “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 product.’” (citing Jack Daniel’s, 599 U.S. at 156). The Second Circuit concluded that MSCHF’s argument for special First Amendment scrutiny under Rogers did not hold.
As part of the analysis, the Second Circuit applied the eight-factor likelihood-of-confusion analysis that considers factors such as the sophistication of the buyers and the potential for consumer confusion. Despite MSCHF’s claims that the Wavy Baby shoe was intended as a collector’s item rather than for wear, the court noted the evidence suggesting otherwise. For instance, the Second Circuit noted the evidence included (1) MSCHF’s broad advertising to the general public; and (2) the consumers’ misunderstanding that the Wavy Baby shoe was a collaboration between MSCHF and Vans.
The Second Circuit also did not find MSCHF’s Wavy Baby shoe possessed sufficient elements of satire or humor to differentiate it from Vans’ trademark. The court noted that while MSCHF was free to critique, it crossed a line using Vans’ trademarks to identify the accused products. Also, the Second Circuit found the Wavy Baby shoes were marketed as wearable footwear, which placed them in direct competition with Vans’ Old Skool shoes.
In the end, the Second Circuit upheld the district court’s decision, agreeing that Vans is likely to prevail on its trademark infringement claim given the likelihood of confusion regarding the source of the Wavy Baby shoes. The court therefore affirmed the preliminary injunction against MSCHF, prohibiting the sale or marketing of the Wavy Baby shoe. The court also supported the district court’s decision to require MSCHF to escrow its revenues from Wavy Baby sales. It clarified that a bond determination was unnecessary as MSCHF had not requested security.
Conclusion
This case signifies a crucial development in trademark law, especially in how the Rogers test is applied following the Supreme Court’s Jack Daniel’s decision. The decision highlights the nuanced and careful consideration required when parodying or drawing inspiration from existing trademarks, especially in commercially competitive contexts. It establishes clearer boundaries for artistic expressions that involve elements of established brands, suggesting that while freedom of expression is protected, it does not extend to actions that can mislead consumers regarding a product’s origin.
