2022 Trademark Law Summary: NFTs, Clear Branding, First Amendment | JD Supra

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2022 Trademark Law Summary: NFTs, Clear Branding, First Amendment | JD Supra


Irreplaceable Tokens and Trademark Infringement: What’s the Legal Basis?
of Nike v. StockX, LLC, Nike filed a trademark infringement lawsuit against StockX, LLC, an online sneaker reseller, in the United States District Court for the Southern District of New York in February 2022. This lawsuit is an important one to follow, as it will likely set the course for how intellectual property laws apply to non-fungible tokens (NFTs).

The breach landed on Nike’s radar when StockX launched the Vault NFT. Vault NFTs are a collection of digital tokens that allow StockX customers to purchase Vault NFTs tied to his StockX sneakers. Many of the sneakers offered by StockX are Nike sneakers. Buying and selling rare sneakers has been popular with many collectors for decades. With Vault NFT, customers can more easily buy, trade, and sell rare sneakers without having to physically own the shoes. When the customer is ready to physically own the sneakers, simply redeem the Vault NFT online and the sneakers associated with the NFT will be shipped directly to the customer’s address. Nike has challenged this process, but the company itself always allows resellers to authenticate and resell shoes. frequently purchase shoes through the StockX website.

Nike’s position on the matter is that Vault NFT is using Nike trademarks and StockX is using Nike’s goodwill to mislead customers into paying “extremely inflated prices” for sneakers. That’s what it means. His Vault NFT in question represents Nike sneakers and Nike trademarks on those sneakers without Nike’s permission. StockX maintains that this is a fair use of Nike trademarks and is no different than an e-commerce store using images and descriptions of products sold online. StockX’s overall position revolves around the claim that NFTs are not virtual products or digital sneakers. In this case, the NFT is tied to a physical product that has already been verified by StockX.

The district court will be tasked with determining whether this is an actionable trademark infringement case. The United States Court of Appeals for the Second Circuit applies the “Rogers Test” in determining when use of a trademark in a work of art is subject to litigation. or expressly mislead as to the source or content of the Work (look Rogers vs. Grimaldi)For many interested in creating their own NFTs or defending the use of their trademarks in NFTs, this ruling could have broad implications for the application of the Lanham Act to the NFT space. I have. This case is currently under investigation and is worth watching as the case progresses.

MSCHF keeps prank
The McNees IP team has teamed up with rapper Lil Nas X to track the Nike v. MSCHF lawsuit, including Nike’s trademark infringement lawsuit against MSCHF over the controversial Nike shoe remake. As Satan shoes.

After all, MSCHF Production Studio hasn’t given up on shoe remake collaborations with famous artists. Vans, Inc. filed a trademark and trade dress infringement lawsuit against her MSCHF in the United States. Vans, Inc. v. MSCHF Prod. Studio Co., Ltd. Vans’ “Jazz Stripe” trademark, “Flying-V” mark, “OFF THE WALL” mark, waffle sole mark, and Vans footbed logo were created in collaboration with the rapper MSCHF’s “Wavy Baby ” Taiga for using it on shoes.

In the Nike v. MSCHF case, the Satan shoes were the Nike Air Mac 97 shoes with the MSCHF’s satanic symbol on them, but otherwise kept the Nike branding intact. In the case of Vans, MSCHF appears to be trying to avoid direct use of the Vans trademark by changing the Vans trademark prominently displayed on the shoe. MSCHF argued that the shoes were reminiscent of Vans’ Old Skool shoes, but that distortions in the design of the shoes and their trademark made the Wavy Baby shoes sufficiently different from Vans’ Old Skool shoes. , argued that the creation of these shoes was protected by the First Amendment as a parody or artistic expression of the Vans trademark and trade dress.

US District Court for the Eastern District of New York tasked to assess whether the differences in shoes are sufficiently distinct to avoid consumer confusion and whether MSCHF’s First Amendment arguments have any merit was owed. The district court ultimately granted Vans’ motion for a temporary injunction and preliminary injunction on the grounds that the striking visual resemblance between the shoes and their respective packaging was likely to cause consumer confusion. The district court ruled that the two marks do not have to be identical and, under the Lanham Act, and because of potential consumer confusion when applying “trademark infringement Polaroid elements,” were similar. I emphasized again that you only need to Polaroid Corp. v. Polarad Electronics Corp.). Essentially, the court determined that consumers would think Vans endorsed Wavy Baby shoes because they were still recognizable as Vans shoes. Despite distorting the original mark, the alleged parody was not the original and the court was not satisfied that Wavy Baby’s shoes and packaging conveyed a satirical message, so the MSCHF’s First Amendment dismissed the article’s claim.

Here, for the second year in a row, MSCHF seems to have tried to avoid the “prank”. Vans’ trademark and trade attempts to change his dress and turn the product into his own brand were ultimately unsuccessful. It is important to remember that a trademark and trade dress do not have to be the same to constitute trademark infringement. They need only be sufficiently similar to cause consumers to confuse the origin of the goods or services or to mistakenly believe that use of the mark is endorsed by the mark’s owner. Modifying someone else’s mark to create a is a significant risk and is unlikely to help defend fair use, especially if the use of the modified mark is a commercial use.

First Amendment Beats LANHAM Act With Expressive Trademarks
In 2018, Elster applied to register the trademark “TRUMP TOO SMALL” for t-shirts, apparel and other merchandise. Elster argued that the “TRUMP TOO SMALL” mark was an expressive mark intended to convey “that some features of President Trump and his policies are small.” UPSTO) trademark examiner rejected the trademark application and, citing Section 2(c) of the Lanham Act, concluded that the trademark could not be registered. specific living individual without the individual’s written consent.” Trademark examiners further argued that this rejection did not infringe the First Amendment. For the prohibition of registration under the Lanham Act is not a restriction of speech, and even so such restrictions are permissible. It was also cited against the “TRUMP TOO SMALL” mark, which prohibits the registration of trademarks that “falsely suggest a connection to a person, whether or not they are connected.” Elster appealed the examiner’s decision to her USPTO Trademark Trial and Appeal Board (TTAB). The TTAB affirmed the examining attorney’s decision to deny registration, noting that it does not have the authority to determine the constitutionality of Section 2(c) of the Lanham Act.

On further appeal, Elster appealed this to the Federal Circuit Court of Appeals, arguing that the denial of registration was an unconstitutional restriction on political speech that violated the First Amendment. In its opinion, the court said: Re: In Elster, The main question in this case is not whether Elster is free to convey its message without the benefit of trademark registration, but rather whether Section 2(c)’s refusal “would be legal for the statement at issue here.” It was whether or not it was possible to “disadvantage” In line with recent U.S. Supreme Court decisions granting broad First Amendment rights to trademark applicants, the Federal Circuit’s opinion overturned the TTAB’s refusal, and this Section 2(c) refusal does not apply. found it to be a violation of the First Amendment. It was for a protected, controversial political speech about public figure President Donald J. Trump. The court further stated that such speech was always protected and that it could refuse such an application under Section 2(c) simply because President Trump’s name was included in the trademark application. determined that it could “chill speech from the Internet to grocery stores.” Further, the court held that First Amendment protection is not lost on the commercial nature of the speech.

The case recognizes that trademarks are not merely indicators of origin, but are also modes of expression entitled to First Amendment protection if they are intended to convey an expressive message. This is a big win for trademark applicants and owners. Such determinations provide additional guidance regarding the “registrability” of expression marks that may exercise an applicant’s First Amendment rights.

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