Court leans on Bad Spaniels in Vans’ 'Wavy Baby' row

Appeals court says it's bound by the precedent set in Jack Daniel’s landmark win at SCOTUS | Art collective insists that its footwear product is a parody and comments on the consumerism inherent in ‘sneakerhead’ culture.

Footwear brand Vans has won its latest showdown with New York-based art collective MSCHF at an appeals court, on the back of the US Supreme Court’s watershed ruling in the case known colloquially as Bad Spaniels.

Delivering its decision yesterday, December 5, the US Court of Appeals for the Second Circuit held that it was bound by the precedent set in Jack Daniel’s Properties v VIP Products (2023).

In that dispute, the US’ highest court unanimously reversed a lower court’s decision that a dog toy version of a Jack Daniel’s bottle did not infringe the whiskey brand’s trademarks because it was a parody.

Similar arguments

The appeals court noted that Vans’ dispute with MHSCF tackles a similar issue to the one in Jack Daniel’s—whether and when an alleged infringer who uses another’s trademarks for parodic purposes is entitled to heightened First Amendment protections.

Vans’ dispute with MSCHF arose when the art collective created a sneaker, the ‘Wavy Baby’, which appeared to parody Vans’ ‘Old Skool’ shoe and 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 just one hour.

Free expression

As the appeal court noted: “Vans, unsurprisingly, was not amused” by this development and promptly sued.

The US District Court for the Eastern District of New York found in favour of Vans, granting 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 argued 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

Adding that the preliminary injunction is an unconstitutional prior restraint on its free expression, the art collective insisted that the district court also erred in requiring MSCHF to place its Wavy Baby revenues in escrow, and by failing to make a bond determination.

However, the  appeals court yesterday insisted that the main issues in this appeal were governed by the precedent set in Jack Daniel’s.

“The Supreme Court’s ruling 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,” said the court.

No special protections

“Applying Jack Daniel’s, we conclude that no special First Amendment protections apply to insulate MSCHF against Vans’ trademark infringement claim,” it added.

The court also opined that 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.

The ruling marks another setback for the art collective, which became embroiled in a legal battle with Nike over its ‘Satan Shoes’—customised Nike trainers sold by MSCHF that feature prominent satanic imagery.

In 2021, the collective agreed to launch a voluntary recall of the shoes—as well as their previous customised Nike ‘Jesus Shoes’—and buy them back for their original retail price.

More recently, MSCHF led a coalition of artists and free speech advocates in filing an amicus brief in the MetaBirkins case, calling for a clear and objective First Amendment filter to circumvent the complex “likelihood of confusion” test in trademark cases involving expressive works.

The petitioners referred to Bad Spaniels, arguing that some of the court’s findings supported its arguments demanding greater protection for artists who wished the parody or comment on brands.

Noting that the US Supreme Court upheld the freedom of expression test set in Rogers v Grimaldi (1989), the petition held that the continued application of this type of test was “essential for balancing trademark owners’ rights with the artistic freedom to depict and comment on brands”.

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