When award-winning photographer Lynn Goldsmith snapped a portrait of the artist formerly known as Prince for Newsweek in 1981, she could not have predicted the cultural and legal impact the pop legend’s portrait would have. In 1984, Vanity Fair sought to license the photograph for an “artist reference” in a story about the musician. Goldsmith agreed to license a one-time use of the photograph with full attribution. Vanity Fair commissioned Andy Warhol to create a silkscreen using Goldsmith’s image and used Warhol’s piece in the magazine with attribution as promised. However, Andy Warhol would go on to create 15 additional works using the Goldsmith photograph, now known as the artist’s “Prince Series.” Although Warhol created the Prince Series nearly forty years ago and three years prior to Warhol’s death, it was not until 2016 when Condé Nast featured the “Orange Prince,” one of Warhol’s silkscreen prints, as part of its tribute to Prince’s passing that Goldsmith learned of the additional reproductions. Condé Nast paid the Andy Warhol Foundation for the Visual Arts, Inc. (“AWF”) $10,000 for the license, while Goldsmith received neither a license fee nor a source credit.

Upon failure to resolve the matter privately, AWF filed suit against Goldsmith, seeking a declaratory judgment that Warhol’s works did not infringe Goldsmith’s copyright in the original photograph, or, in the alternative, Warhol’s works constituted fair use of the subject photograph.[1] The Southern District of New York granted summary judgment to AWF on its claim of fair use, but the Second Circuit Court of Appeals reversed.

The Copyright Act motivates creativity by granting the author of an original creative work rights to reproduce their work, prepare derivatives works, and (in the case of pictorial or graphic works) display the copyrighted works publicly. This ownership interest in the creative work is balanced with the general public’s need to access the creative arts and exercise First Amendment rights. The fair use doctrine (the basis of AWF’s copyright infringement defense) allows use of a copyrighted work by persons other than the author for “purposes such as criticism, comment, news reporting, teaching . . ., scholarship, or research”[2] and is evaluated through multiple factors. On petition for writ of certiorari, AWF asked the Supreme Court to evaluate whether the Condé Nast licenses are fair use based on just the first fair use factor, “the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes.”[3] On this issue, the Supreme Court agreed with the Second Circuit that the first factor of fair use favored Goldsmith. Because AWF did not dispute that the remaining fair use factors favored Goldsmith, the Court affirmed the Second Circuit’s finding of copyright infringement.

The first factor of fair use considers the nature of and reasons for a copier’s use of an original work.[4] “The larger the difference, the more likely the . . . factor weighs in favor of fair use. The smaller the difference, the less likely.”[5] When the original and the copy share a similar purpose, there is a concern that the copy will substitute for the original. Because the copyright owner has the exclusive right to prepare derivative works of their original—that is, recasts, transformations, or adaptations of the original work—the copy must be substantially transformative to have a different purpose or character than the original and that degree of transformation must also be balanced against any commercial nature of the use.

AWF argued that the Prince Series is sufficiently transformative of Goldsmith’s original photograph because the artworks convey a different meaning or message than her photograph. Yet, because the first use factor focuses on the degree in which the infringing use has a different purpose or character, the Court ultimately sided with Goldsmith. The majority found that AWF’s licensing of the “Orange Prince” copy to Condé Nast is not a substantially different purpose than Goldsmith’s photograph. Goldsmith took the original photograph and licensed it to Newsweek for use in an article about Prince, and then similarly licensed the work to Vanity Fair in association with an article about Prince. AWF licensed the “Orange Prince” to Condé Nast for an article about Prince. “As portraits of Prince used to depict Prince in magazine stories about Prince, the original photograph and AWF’s copying use of it share substantially the same purpose,” wrote Justice Sonia Sotomayor for the majority.

The majority opinion stresses that its opinion is limited to AWF’s license to Condé Nast: “Only . . . AWF’s commercial licensing of ‘Orange Prince’ to Condé Nast, is alleged to be infringing. We limit our analysis accordingly. In particular, the Court expresses no opinion as to the creation, display, or sale of any of the original Prince Series works.”[6] A concurrence written by Justice Neil Gorsuch (joined by Justice Ketanji Brown Jackson) further argued that the subsequent use (AWF’s licensing to Condé Nast) is the relevant inquiry rather than considering the original copier’s (Andy Warhol) intent in creating the “Orange Prince.” Conversely, Justice Elena Kagan’s (joined by Justice John Robert’s) condemnatory dissent sharply criticized the majority’s purported failure to appreciate how Warhol’s work differed from Goldsmith’s photograph. The dissent specifically cited to the Court’s decision just over two years ago in Google LLC v. Oracle America, Inc., where Warhol’s works were deemed the “perfect exemplar of a ‘copying use that adds something new and different.’”[7] The majority opinion dismisses the dissent as “a false equivalence between AWF’s commercial licensing and Warhol’s original creation” which results in “a series of misstatements and exaggerations, from the dissent’s very first sentence.”[8]

Most often in fair use inquiries, the dispute focuses on a copier’s use of the copyrighted work. It is not often a court is presented with the issue of a third party’s independent use (that is, use without the involvement of the copy’s creator) of the subsequent work. The majority opinion is narrow and focuses on one specific fair use factor in the context of one specific use. The Court’s decision cautions that the motivations behind the third party’s use must be considered on their own merit, rather than allowing the use and motivations of the original work to automatically transfer to the third party’s use.

Significant also to the finding of infringement is that the remaining fair use factors—including the fourth factor, “the effect of the use upon the potential market for or value of the copyrighted work”—was admitted to favor Goldsmith. In fact, that is precisely what occurred in this matter. Throughout her career, Goldsmith regularly photographed celebrities and licensed those photographs to magazines for articles about that celebrity. Condé Nast needed a picture of Prince for its 2016 memorial article about Prince, and it licensed the “Orange Prince” from AWF instead of Goldsmith’s photograph. This use “served the same essential purpose of depicting Prince in a magazine commemorating his life and career.”[9]

Despite the pains made by the majority to limit the opinion’s reach, this decision will likely have significant ramifications for the art world, particularly art markets and licensing. While here the original artist’s use itself is unaddressed, the decision may temper a creator’s ability to market new creative works that incorporate copyrighted works. The fair use doctrine’s intent is to protect use of copyrighted works in particular contexts and has particular importance in artistic criticism and parody. Though a creator may still be able to express themselves artistically using the copyrighted work, finding a gallery or dealer willing to accept the work may prove more challenging. For those willing to accept the work, expect strong warranties and artist indemnification contract clauses.

Read the Supreme Court’s opinion here.

Special thanks to William Wildman, Loyola University New Orleans College of Law, Class of 2023, for his assistance in the researching and drafting of this post.

[1] See Andy Warhol Found. for the Visual Arts, Inc. v. Goldsmith, 382 F.Supp. 3d 312 (S.D. N.Y. 2019).

[2] 17 U.S.C. § 107.

[3] Id.

[4] Andy Warhol Found. for the Visual Arts, Inc. v. Goldsmith, 598 U.S. ___ (2023).

[5] Id.

[6] Id. at ____ (slip op. 21).

[7] Id. at ____ (dissent op. 2).

[8] Id. at ____ (slip op. 22, n. 10).

[9] Id. at ___ (slip op. 23, n. 11).

On May 10, 2023, the Texas State Senate passed H.B. 4, titled the Texas Data Privacy and Security Act (“TDPSA”), sending the bill to Governor Abbott’s desk for final signature. If signed into law, Texas will join a growing contingency of states enforcing comprehensive data privacy laws for their residents.

This alert provides answers to some general questions about the TDPSA as it is currently written. Be on the lookout for additional updates about the Act once signed by Governor Abbott.

Who will be required to comply with the TDPSA?

The TDPSA will regulate persons and entities that: (a) conduct business in Texas or produce products or services consumed by Texas residents; (b) processes or engages in the sale of personal data; and (c) is not a small business as defined by the U.S. Small Business Administration, unless the small business is involved in the sale of sensitive personal information. This applicability standard is broader than many other state privacy laws previously enacted because it does not have a revenue threshold. Rather, the applicability is based on whether the business qualifies a “small business”, which is a variable, context-specific standard, the status of which can be undone by its affiliations.

If you are a small business, but you are selling Texas residents’ sensitive personal data, the TDPSA will require you to obtain the data subject’s consent prior to sale.

Does my business process or sell personal data under the TDPSA?

“Personal data” is defined as any information that is linked or reasonably linkable to an identified or identifiable individual. If you are processing personal data, that means that your business is collecting, using, storing, disclosing, analyzing, deleting, or modifying of personal data. “Sale” means the sharing, disclosing, or transferring of personal data for monetary or other valuable consideration to a third party. We have seen, particularly in California, that “sale” can have significantly broader applications than traditional notions of what constitutes a sale, such as receipt of analytic data. It has yet to be seen whether this Act would take a similar broad approach.

What rights would be granted to Texas residents?

Texas residents could soon have certain rights related to their personal data, including rights of access, correction, deletion, portability, the right to opt out of certain processing, and the right to appeal a controller’s decision regarding a rights request. The Act could also require data minimization, processing limitations, data security, non-discrimination, third-party contracting, and data protection assessments, as well as impose certain requirements directly on entities who process data on behalf of a party that makes decisions on how that data is used.

Which other states have comprehensive privacy laws?

As of this writing, seven states have signed comprehensive data privacy laws. California was the first state with the California Consumer Privacy Act (“CCPA”), effective as of January 2020. California’s amendments to the CCPA and the Virginia’s Consumer Data Protection Act (“VCDPA”) became effective January 1, 2023. Colorado and Connecticut’s laws will go into effect on July 1, 2023, while Iowa and Indiana’s will go into effect in 2025 and 2026, respectively. Similar laws from Montana and Tennessee are also awaiting final signature.

When will the TDPSA be effective?

If signed, the TDPSA will be effective on March 1, 2024.

Who is responsible for enforcement? Is there a private right of action?

The TDPA does not contain a private right of action. Rather, all enforcement will be through the Texas Attorney General, but the AG can make a civil investigative demand following a consumer request.

What is the penalty for violations?

The penalty is $7,500 per violation plus attorney fees and investigation costs incurred by the AG.

Once the final act is signed, Kean Miller will provide additional resources regarding compliance with this Act. If you want to discuss this possible new Act in further detail, contact your privacy counsel.

Artificial Intelligence (AI) is a rapidly growing field that has the potential to revolutionize many aspects of our lives. One area where AI has already made significant inroads is in content creation. With the help of AI-powered writing assistants, businesses and individuals can generate high-quality content with minimal effort. However, there are legal concerns associated with using AI to generate content, like this blog article, which was created in part through the assistance of ChatSonic AI.

One of the primary legal concerns is related to copyright – both in terms of protecting the work generated and the concern of infringing someone else’s work. Copyright law protects original works of authorship, including literary works like blog articles. When an AI program generates a blog article, it is unclear who owns the copyright. Is it the person who programmed the AI, the AI itself, or the person who uses the AI to generate the content? This is a complex legal issue that has yet to be fully resolved. Currently, US law does not allow for copyright protection on works created solely by AI. This prohibition is currently being challenged in US Courts and will undoubtedly make its way through the appeals process over the next few years. Patent law has about a year’s head start on this issue, but the decisions have not been pro-AI. In 2022, the Federal Circuit ruled that computer programs cannot qualify as inventors under the US Patent Act. Thaler v. Vidal, 43 F.4th 1207 (Fed. Cir. 2022). It stands to reason that if a computer program cannot invent, it also cannot create a work of authorship. The owner of the AI software in Thaler recently filed a petition for a writ of certiorari asking the Supreme Court to review the Federal Circuit’s ruling. Interestingly, the same individual and computer program are behind the leading test case on the copyright side as well. But neither of these cases deals with the scenario where the AI is a co-inventor or, like this article, a co-author with a human. As such, we will not have definitive answers on ownership and protection of AI-generated works for years to come. 

Many are concerned with the potential for plagiarism. In the legal context, however, plagiarism is more properly referred to as “copyright infringement.” While AI writing assistants may be designed to generate original content, there is still a risk that the AI could inadvertently produce content that is substantially similar to existing work. This could result in accusations of plagiarism, causing reputational harm, or liability for infringement. “I didn’t know” is not likely to be a viable defense in such a claim. Most forms of infringement are strict liability torts, meaning that the owner of the infringed work does not need to prove the infringer’s intent or knowledge of infringement. Rather, the infringer’s knowledge and intent really only determine if enhanced damages may be assessed against the infringer. As such, using AI carries intrinsic risk because the user often has no way to determine the source of information or to check that the content is truly original. 

Liabilities may also arise from the publication of inaccurate information. If an AI-generated blog article contains inaccurate, misleading, or even defamatory information, who is responsible? US law does not currently allow suits against computer programs as they are neither natural nor juridical persons (i.e., entities). Furthermore, the use of AI software is typically conditioned upon the acceptance of license terms, which often pass the liability for content onto the end user of the software. In all likelihood, the poster of the content will be liable, at least under a negligence theory. 

To mitigate these legal concerns, it is important to take certain precautions when using AI to generate blog articles. First and foremost, it is essential to ensure that the AI writing assistant being used is reliable and produces high-quality, original content. It is also important to properly credit any sources used in the content generated by the AI. Another important step is to have a clear agreement in place that specifies ownership of the content generated by the AI. This can help avoid any disputes over copyright ownership down the line. It is also a good idea to have a disclaimer on any AI-generated content that clarifies that an AI program generated the content and that the user is responsible for verifying the accuracy of the information presented. Those looking for an example may look at the last line of this article. 

In conclusion, while AI-powered writing assistants can be a valuable tool for generating high-quality blog content, legal concerns must be considered. Copyright, plagiarism, and liability are all potential issues that must be addressed to ensure that the use of AI in content creation is legal and ethical. By taking the appropriate precautions, however, it is possible to harness the power of AI to create compelling and engaging blog articles while also protecting your legal interests.

Disclaimer: To be clear, this article was generated using the assistance of an AI program. A human has reviewed, revised, supplemented, and rewritten parts of this content. By doing so, an article that may have otherwise taken an hour and a half to write took about 45 minutes. Nevertheless, as with all blog articles, the reader is responsible for verifying the information presented and should not rely upon this article as providing any legal advice. 

On June 15, 2022, Governor John Bel Edwards signed into law Act No. 425, S.B. 426, named the “Allen Toussaint Legacy Act.”[1] The Act is named after the late Allen Toussaint, a famous New Orleans musician, songwriter, and producer. Toussaint was known for hits such as “Java,” “Fortune Teller,” “Southern Nights,” “Working in the Coal Mine” and “Mother-in-Law.”

After seeing drink koozies featuring Toussaint’s image sold by vendors outside of the Jazz Fest months after the artist died, Tim Kappel, an entertainment law professor at the Loyola University New Orleans, began pushing for a bill protecting the right to publicity in Louisiana.[2] Before the Act, despite the clear commercial benefit from products featuring Toussaint and other New Orleans legends like Fats Domino and Professor Longhair, the deceased musicians’ estates received no benefit from the sales nor had any power to stop the commercialization.

Act No. 425

The right of publicity is not a new concept in the United States. New York and California are leading examples of the right of publicity, particularly because those states are dense with famous individuals, who are more likely to be affected by right of publicity laws. For example, in the 1990s, the Ninth Circuit U.S. Court of Appeals found Vanna White could seek damages from Samsung for an advertisement involving a futuristic female robot turning the letters on a game show board.[3] Although the advertisement did not mention Vanna White by name, or use her actual image, the court held Samsung may have violated the law by “attempt[ing] to capitalize on White’s fame to enhance their fortune.”[4]

Act 425 creates a property right in the use of Louisiana residents’ identity for commercial purposes. The Act prohibits third party commercial use of an individual’s identity in Louisiana without written consent from the individual or the individual’s authorized representative or, if the individual is deceased, by more than 50% of the authorized representatives currently holding the right to commercialize. The Act defines an “individual” as “a living natural person domiciled in Louisiana or a deceased natural person who was domiciled in Louisiana at the time of the individual’s death.” “Identity” includes “an individual’s name, voice, signature, photograph, image, likeness, or digital replica.”

Violations can carry hefty penalties. Successful plaintiffs may recover the greater of $1,000 and the actual damages in compensatory damages, and (to the extent not duplicative of compensatory damages) payment of all profits earned from the violation. Similar to copyright infringement claims, plaintiffs must only prove the gross revenue attributable to the unauthorized use, and the defendant must prove any deductible expenses. A court may also award attorneys’ fees, costs, and expenses to the successful party, as well as equitable relief (e.g., injunctions or temporary restraining orders).

The Act carves out several exceptions, which include the “fair use” exceptions found in the Copyright Act, first amendment exceptions, and protections for works of creative expression. The Act also provides exceptions for advertisers, publishers, speakers, and others who passively transmit or distribute the commercialized material created by the third party.

The granted rights are not perpetual. Termination occurs either: (a) after 3 consecutive years of non-use by the authorized representative after the individual’s death; or (b) 50 years after the individual’s death. The Act is retroactive and will apply to individuals who died on or before the effective date of August 1, 2022. However, the Act will not apply to any alleged violations committed before August 1, 2022; also exempt are works created before this time, even if they are republished or distributed after that date. Any claim under the Act must be filed within 2 years of the alleged violation.

Future Considerations

Several interesting issues arise in response to this passage. Although Louisiana may not be dense with popstars and movie stars like New York, Louisiana does have its fair share of talented athletes. Considering the NCAA’s recent move toward permitting college athletes to profit off their name, image, and likeness, this Act will be instrumental in restricting commercialization of the Louisiana-domiciled athletes to only those authorized by the athlete themselves.

But the Act is not limited to persons in the public eye. It applies to any person domiciled in Louisiana or a deceased person that was domiciled in Louisiana at the time of death. Ordinary persons captured in videos that later go viral on social media often find their likeness plastered onto commercial products. The Act could provide some avenue to capture the monies made off of their “15 minutes of fame.” However, the Act does not provide for statutory damages and attorney fees are within the discretion of the court, which may complicate or discourage recovery by persons with limited means against unprofitable violations.

Legal scholars have expressed concern about defining identity as a property right that is “heritable, licensable, assignable, and transferrable.” Professor Jennifer Rothman at the University of Pennsylvania Carey Law School identified problematic potential for parents’ ability to transfer their children’s identity to third parties, as well as record labels, movie producers, sports leagues, and others who may pressure young, aspiring athletes and performers to assign rights to them in perpetuity.[5] Professor Rothman also questions whether identity being a property right could incur property-based liabilities. The Act specifically prohibits its property rights being subject to a security interest, material property distribution, or debt collection. However, other liabilities could compel commercialization against an individual or heir’s wishes.

Concluding Remarks

Commercialization of individual identities presents a compelling new right for Louisiana residents. How the Act operates in practice remains to be seen. The opportunity to “sign your name away” may be profitable in the short term, but could have long-standing implications if an exclusive license omits favorable termination or sunset clauses. Potential commercial licensees should further ensure that they actually have the right to make commercial use of an individual’s likeness—even if that person is an employee, a student, or has signed a general photograph release.

[1] https://legis.la.gov/legis/ViewDocument.aspx?d=1289308.

[2] James A. Smith, “An Allen Toussaint law? Attempting to ban koozies, unlicensed merchandise using likeness”, The Advocate (April 30, 2019) (available at https://www.theadvocate.com/baton_rouge/news/politics/legislature/article_5ec7233c-6bab-11e9-8279-fb05c40acaea.html).

[3] White v. Samsung Elecs. Am., Inc., 971 F.2d 1395 (9th Cir.1992), as amended (Aug. 19, 1992).

[4] Id. at 1396.

[5] Jennifer E. Rothman, “Louisiana’s Allen Toussaint Legacy Act Heads to Governor’s Desk”, Rothman’s Roadmap to the Right of Publicity (Jun. 6, 2022) (https://rightofpublicityroadmap.com/news_commentary/louisianas-allen-toussaint-legacy-act-heads-to-governors-desk/).

Steven Thaler filed an application for copyright registration in a two-dimensional image entitled “Creativity Machine”.  In his application, Thaler stated that the work “was autonomously created by a computer algorithm running on a machine”.  The Review Board of the United States Copyright Office (“Board”) denied the application stating it lacked human authorship necessary to support a copyright claim.  He filed a request for reconsideration arguing the human authorship requirement is unconstitutional.

In its ruling of February 14, 2022, the Board upheld its prior decision stating that this work lacked the required human authorship necessary to sustain a claim in copyright.  The Board noted court decisions limiting copyright protection to creations by human authors.  Further it cited the Compendium of U.S. Copyright Office Practices, which has long mandated human authorship for registration.  The Board stated, “After reviewing the statutory text, judicial precedent, and longstanding Copyright Office practice, the Board again concludes that human authorship is a prerequisite to copyright protection in the United States and that the Work therefore cannot be registered”.  It concluded that Thaler cited no case law or other precedent that would undermine the Office’s construction of the Copyright Act.

Dr. Keith Bell published a book in 1982 entitled Winning Isn’t Normal which provides strategies for success in athletics. He markets the books through online retailers and his own website. One of the passages in the book that is well known is entitled the WIN Passage. He offers merchandise, including t-shirts and posters, that display the WIN Passage. The WIN Passage is subject to a separate copyright registration and he offers licenses for its use.

In December 2017, Chisholm Trail High School’s softball team and color guard posted the WIN Passage to their Twitter accounts. The posts credited Bell as the author but did not include a copyright watermark that Bell imprints on his digital reproductions of the WIN Passage. The school district did not seek his permission before publishing the tweets. Bell discovered the tweets through online searches.

Bell waited almost a year to notify the school that two of its social media accounts had infringed the copyright. The school district removed both posts and told Bell it was a “teachable moment”. After settlement negotiations broke down, Bell sued for copyright infringement. The school district invoked the fair use defense and moved to dismiss the claim for failure to state a claim. The district court granted the motion to dismiss and awarded attorney’s fees to the school district.

The Fifth Circuit addressed the fair use defense noting it balances protecting an author’s work and permitting others to reference them in cultural conversation. While the overarching goal of a copyright is to stimulate intellectual activity for public good, courts have recognized a limited privilege of use by others in a reasonable manner without the owner’s consent. Congress codified the fair use doctrine in the Copyright Act of 1976 and listed four factors to be considered in applying the doctrine, namely (1) the purpose and character of the use, including whether such use is commercial in nature or for nonprofit educational purposes: (2) the nature of the copyrighted work; (3) the amount and substantiality of the portion used in relation to the work as a whole; and (4) the effect of the use upon the potential market for or value of the work.

Analyzing these factors, the Fifth Circuit concluded the school’s use was in good faith. The use was not commercial as nothing indicated that the school district profited from posting a one-page excerpt from the book. These tweets only served to inspire students to strive for success. Bell argued that the tweets could indirectly benefit the school district by bolstering the professional reputation of its athletic department. However, the court found that the tweets did not tout the success of these programs and were not intended to motivate donors to contribute to the programs. Bell did not argue he lost revenue due to the school’s use of the passage but claimed the use could reduce the incentive to purchase Winning Isn’t Normal or related merchandise; however, the Court noted that the tweets did not reproduce a substantial portion of the work so as to make available a substitute for the original work. Bell failed to allege a substantial adverse impact on a legitimate market for his copyrighted work.

Finally, the Fifth Circuit found that the district court did not abuse its discretion in awarding attorney’s fees to the school district. It noted that Bell has a long history of suing public institutions and non-profit organizations over de minimis uses of his work. Bell was unable to identify any actual financial injury associated with that use and brought suit anyway. The court said that attorney’s fees were an appropriate deterrent to Bell and other copyright holders.

The Trademark Modernization Act of 2020 (“TMA”) becomes effective on December 27, 2021 and makes several important amendments to federal trademark law (the Lanham Act) intended to modernize trademark application examinations and clean house of trademark registrations for marks not used in commerce. USPTO announced on December 21, 2021, that it has created a new Petition for Expungement or Reexamination form to be used in TMA actions. In preparation for the go-live, we reshare our prior article on the metes and bounds of these actions.

Ex Parte Challenges to Current Trademark Registrations

A significant impetus for the TMA was comments during a 2019 hearing before the House Subcommittee on Courts, Intellectual Property, and the Internet concerning “clutter” and “deadwood” on the United States Patent and Trademark Office (“USPTO”) trademark registers. As of July 18, 2019, the USPTO trademark register comprised approximately 2.4 million registrations.[1]  As testified by Commissioner for Trademarks Mary Boney Denison, the USPTO had seen an increase in trademark applications or registration maintenance filings that contained false or misleading claims and information, particularly with regard to specimens of use.[2] Trademark applicants are required to submit evidence with their applications that the applied-for trademark is actually being used in commerce in the class of goods or services listed on their respective application. Trademark owners are required to regularly submit similar evidence to maintain their registrations. Commissioner Denison testified that the USPTO has increasingly received fake or digitally altered specimens that do not actually show use of the mark in commerce as required by the Lanham Act.[3] These false submissions, as well as excessive registrations for marks no longer in use, limit the usefulness of Trademark Register and significantly increase trademark clearance costs.

The TMA seeks to address these issues through two new ex parte proceedings. The first mechanism, an ex parte reexamination, permits third parties to challenge use-based registrations where the trademark owner swore that the marks were used in commerce, either in the application itself or in a statement of use. This mechanism allows the USPTO to reexamine the accuracy of the applicant’s claim of use at the time the averment was made. The second mechanism primarily targets foreign applications that claim use under Lanham Act section 44(e) or 66(a)—which allows foreign applicants to bypass submitting a statement of use in lieu of providing evidence of trademark registration in another country—and allows challenges to marks that have never been used in commerce. These proceedings can each be initiated by submitting testimony or evidence establishing a prima facie case of non-use, or the Director of the USPTO may determine on his or her own initiative that a prima facie case of nonuse exists. The registrant will then have the opportunity to respond to the alleged prima facie case. The registration will then either be cancelled, subject to the registrant’s right of appeal to the Trademark Trial and Appeal Board, or confirmed valid. A validity decision will preclude all further ex parte challenges to the registration.

These ex parte mechanisms add renewed focus to the Lanham Act’s requirement of “use” for trademark rights. The Lanham Act requires “bona fide use of a trademark in the ordinary course of trade.” For goods, that can include consistently placing the trademark on the product or its packaging, labels, or tags or, if it is impractical to use on the product itself, invoices and documents associated with the sale of the goods. For services, use can include advertising in connection with actual offers for the services.[4] Given these new mechanisms and an increase in fraudulent applications, USPTO trademark examiners may more strictly scrutinize specimens of use for compliance with trademark use requirements. To avoid unnecessary delays in trademark applications, applicants should take care to ensure specimens meet the requirements of the Trademark Manual of Examining Procedure (“TMEP”) and that their use actually qualifies as trademark use. Experience intellectual property counsel can help clients navigate the TMEP and trademark application procedures.

Changes to Trademark Registration Examination Procedures

The Lanham Act currently requires trademark applicants to respond to office actions issued during the examination within 6 months. The TMA now allows the USPTO increased flexibility to set shorter response deadlines. Specifically, the USPTO can, through regulations, set shorter response periods between 60 days to 6 months, provided applicants can receive extensions of time to respond up to the standard 6 months. Much like extensions of time granted by the USPTO for patent applications, any such extension requests will incur additional fees.

Formalization of the Informal Protest Procedure

Though not a formal process, the USPTO has long allowed third parties to submit evidence regarding registrability of a mark during examination of a trademark application. Section 3 of the TMA now formalizes that process by: (1) expressly allowing third party evidence submissions; (2) setting requirements that the submission include identification of the grounds for refusal to which the submission relates; and (3) authorizing the USPTO to charge a fee for the submission. The USPTO is required to act on that submission within two months of its filing. The decision on the submission is final, but the applicant may raise any issue regarding the grounds for refusal in the application or any other proceeding.

Presumption of Irreparable Harm for Trademark Infringement Plaintiffs

The primary goal of most trademark infringement litigation is to stop the infringing behavior, typically through injunctions. Section 6 of the TMA provides that a “plaintiff seeking an injunction shall be entitled to a rebuttable presumption of irreparable harm.” This language codifies a standard that most courts had applied to establish harm before the U.S. Supreme Court’s 2006 decision in eBay v. MercExchange, LLC.[5] In eBay, the Supreme Court held that patent owners were no different than any other litigant seeking equitable relief, so those owners must demonstrate irreparable harm to be entitled to a permanent injunction. Several courts then applied eBay’s holding by extension to trademark owners, finding they also must demonstrate irreparable harm for an injunction to be warranted.[6] Some courts, like the Fifth Circuit, have struggled in their application of eBay to trademark infringement disputes, leading to confusion and disagreement among lower district courts.[7] The eBay decision thus ultimately led to a circuit split on whether the rule presuming irreparable harm remained valid in Lanham Act cases.[8]

The TMA makes clear that trademark infringement plaintiffs are entitled to the presumption that they will be irreparably harmed if the infringer is allowed to continue use of the infringing trademark. Section 6(b) further confirms the retroactivity of this presumption, stating that Section 6’s amendment “shall not be construed to mean that a plaintiff seeking an injunction was not entitled to a presumption of irreparable harm before the date of enactment of this Act.” This change increases the likelihood that trademark infringement plaintiffs will be awarded preliminary and permanent injunctive relief, decreasing overall litigation costs and evidentiary burdens on plaintiffs.

The Trademark Modernization Act of 2020 addresses a grab-bag of challenging trademark issues that together provide additional protections for trademark owners and, ultimately, consumers. Trademark owners seeking to register their marks will soon have expedited procedures to tackle fraudulent or “deadwood” registrations that block their trademark applications. The Act further resolves a circuit split for awarding an injunction, easing the burden on trademark owners to show harm. While the ultimate effect of the TMA remains to be seen, these changes should empower trademark holders with additional tools to combat problematic registrations and ease litigation burdens.

******************************************************************************************************************************************************************************************************************

[1] Statement of the Commissioner for Trademarks Mary Boney Denison before the United States House Subcommittee on Courts, Intellectual Property, and the Internet Committee on the Judiciary, Jul. 18, 2019 (available at https://www.uspto.gov/about-us/news-updates/statement-commissioner-trademarks-mary-boney-denison-united-states-house_).

[2] Id.

[3] Id.

[4] Services must actually be offered in connection with the advertisement to qualify as “use.” Couture v. Playdom, Inc., 778 F.3d 1379 (Fed. Cir. 2015).

[5] 547 U.S. 388 (2006).

[6] See Peter J. Karol, Trademark’s eBay Problem, 26 Fordham Intell. Prop. Media & Ent. L.J. 625, 636–653 (2016) (available at https://ir.lawnet.fordham.edu/cgi/viewcontent.cgi?article=1623&context=iplj); Mark A. Lemley, Did eBay Irreparably Injury Trademark Law?, 92 Notre Dame L. Rev. 1795 (2017) . See also Gene Quinn, “Why eBay v. MercExchange Should, But Won’t, Be Overruled”, IPWatchdog.com (Feb. 16, 2020) (https://www.ipwatchdog.com/2020/02/16/ebay-v-mercexchange-wont-overruled/id=118929/).

[7] See Karol, supra n. 5 at 646–47.

[8] Testimony of Douglas A. Rettew, “Fraudulent Trademarks: How They Undermine the Trademark System and Harm American Consumers and Businesses” at p. 13, Hearing Before the Senate Committee on the Judiciary, Subcommittee on Intellectual Property (Dec. 3, 2019) (available at https://www.judiciary.senate.gov/imo/media/doc/Rettew%20Testimony.pdf).

Each year, millions of dollars in counterfeit goods enter the U.S. According to the Organization for Economic Co-Operation and Development, the international trade of counterfeit and pirated goods amounted to as much as $509 billion in 2016.[1] From 2003 through 2018, the number of seizures of infringing goods by the U.S. Customs and Border Protection (CBP) and U.S. Immigration and Customs Enforcement (ICE) increased from 6,500 to 33,810, while the domestic value of seized merchandise – as measured by manufacturer’s suggested retail price of the legitimate good – increased from $94 million in 2003 to $1.4 billion in 2018.[2]

A company holding intellectual property rights can take proactive measures to protect itself against the importation of counterfeit and pirated goods into the U.S. Registering intellectual property rights with the CBP is proving to be one of the most efficient and cost-effective measures to protect intellectual property rights and block the importation of infringing goods

CBP is the primary federal agency responsible for securing America’s borders, and its mandate includes the protection of U.S. intellectual property rights. Per federal regulations, CBP has the authority to detain, seize, forfeit, and ultimately destroy merchandise seeking entry into the United States if the same is in violation to a trademark or copyright that have been registered with the U.S. Patent and Trademark Office (USPTO) or the U.S. Copyright Office (USCOP) as well as subsequentially registered with CBP. CBP also has authority to intercept goods that are covered by an exclusion order issued by the U.S. International Trade Commission.[3]

The process to register a trademark and/or copyright with CBP’s e-Recordation system is relatively simple and inexpensive. The owner of the rights or its agent submits the application for the “U.S. Customs & Border Protection e-Recordation Program”[4] along with the applicable filing fees. The e-Recordation fee for federally registered trademarks is $190 per International Class of Goods. The recordation must be renewed concurrently with the renewal of the trademark at the USPTO. The fee for e-Recordation of copyright is also $190 per copyright, but the recordation must be renewed every 20 years. The renewal fees are currently $80 per trademark/copyright.

In addition to registering the trademark and/or copyright, a recordation holder can also partner with CBP to maximize efficiency in identifying and preventing the entry of infringing goods. For example, a recordation holder can develop a product identification guide to aid CBP in identifying genuine merchandise and distinguishing it from infringing goods. Further, a recordation holder can deliver in-person product identification training to CBP personnel in the field and can also deliver live-online training to CBP personnel that introduces the brand and describes their intellectual property rights. Finally, a recordation holder can partner with the Centers of Excellence and Expertise for additional training and enforcement opportunities.

The registration of trademarks and copyrights through CBP’s e-Recordation system is one of the most proactive measures for a company to protect its intellectual property rights from international competition. For assistance and guidance navigating through the CBP’s e-Registration system, or on how to protect your intellectual property, please contact Devin Ricci and Stephen Hanemann.

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[1] Combating Trafficking in Counterfeit and Pirated Goods: Report to the President of the United States, DHS 1, 8 (2020) https://www.dhs.gov/sites/default/files/publications/20_0124_plcy_counterfeit-pirated-goods-report_01.pdf.

[2] Id.

[3] Intellectual Property Rights Enforcement: How Businesses Can Partner with CBP to Protect their Rights, CBP 1, 2 (2020), https://www.cbp.gov/sites/default/files/assets/documents/2017-Jan/ipr_guide.pdf; see also Devin Ricci & Mary Gimber, Using the International Trade Commission to Stop the Importation of Infringing Goods, Kean Miller Intell. Prop. Blog (April 19, 2021), https://www.intellectualproperty.law/2021/04/using-the-international-trade-commission-to-stop-the-importation-of-infringing-goods/

[4] The applications for the e-Recordation Program can currently be found at https://iprr.cbp.gov/.

The United States International Trade Commission (“ITC”) is a quasi-judicial federal agency with broad investigative responsibilities on matters of international trade. An increasingly popular function of the ITC is serving as an alternate forum to litigate intellectual property disputes arising under Section 337 of the Tariff Act of 1930, as amended (19 U.S.C. § 1337), commonly referred to as a “Section 337 investigation.” Section 337 vests the ITC with authority to investigate and issue decisions involving importation of articles that constitute unfair competition, which includes the importation of articles infringing on a valid patent, trademark, or copyright. While the ITC can institute a Section 337 investigation on its own initiative, the ITC is quickly becoming a popular forum for U.S. companies asserting claims of patent infringement.

It is easy to see why companies are turning to the ITC over a traditional district court litigation. Section 337 investigations are assigned to an Administrative Law Judge (“ALJ”) that oversees the entirety of the proceeding, beginning once the ITC’s investigation begins. Compared to district court litigation, which can (and often does) drag on for years, a trial-like hearing in ITC proceedings generally occurs within one year from the IP owner’s complaint of unfair competition. In addition to an expedited result, ITC proceedings have a broader reach on infringers as the jurisdiction is in rem, which means jurisdiction is tied to the article, opposed to where the entity conducts business. Therefore, a patent holder does not need to argue personal jurisdiction or be concerned over venue issues. However, the ITC only has the power to grant injunctive relief, generally in the form of an Exclusion Order as discussed below, and the ITC cannot award damages.

The ITC shares several common characteristics of district court litigation. For example, discovery and motion practice is still subject to the Federal Rules of Civil Procedure. After the parties conduct discovery, evidentiary hearings, and post-hearing briefing, the ALJ issues an Initial Determination, which details all the contested issues and elements of the Section 337 violation. The Initial Determination issued by the ALJ can then be reviewed by the ITC, allowing the ITC to adopt or reject the ALJ’s findings. The ITC’s review is most often prompted by a party petitioning for the Initial Determination to be reviewed, although the ITC can also conduct a review of any Initial Determination as it sees fit. If a party petitions the ITC to review the ALJ’s Initial Determination but the ITC declines to conduct such review, the ALJ’s Initial Determination becomes a Final Determination. During the pendency of the ITC proceeding, the allegedly infringing goods may still be imported into the United States upon the posting of a bond determined by the ITC.

If the Final Determination includes a finding of infringement, the ITC has the power to issue an Exclusion Order, either Limited (“LEO”) or General (“GEO”). The issuance of an exclusion order can be compared to injunctive relief in district court litigation, although the ITC’s Exclusion Orders are often more powerful and prevent the infringing articles from entering the United States. A LEO excludes the importation of infringing goods by the infringing party named in the Section 337 investigation. A GEO, however, provides for the widespread exclusion of the importation of infringing goods regardless of the importing party’s identity or involvement in the Section 337 investigation. The orders are provided to U.S. Customs and Border Protection (i.e., “Customs”), which is tasked with the enforcement of these Exclusion Orders and preventing the importation of infringing goods into the U.S. Exclusion Orders are prospective in nature, however, and do not impact the use or sale of goods that are already in the United States.

Due to the ITC’s ability to more swiftly stop infringers than district courts and its ability to proceed in rem, it is no surprise that Section 337 investigations have become increasingly popular over the years among IP owners seeking international relief. For those involved in the international trade business, the increasing popularity of Section 337 may seem daunting and unduly burdensome. But they are less onerous than resorting to the District Courts. Moreover, through strategic planning and proactive measures, the burdens faced by international or foreign traders can be lessened or avoided altogether. Our next article will discuss proactive measures that can be taken with Customs to block the importation of infringing items with and without first obtaining an order from the ITC.

This post is also available as a podcast:


Wearable art or a devilish rip-off? That’s the question posed by a recent collaborative release by art cooperative MSCHF Product Studio and musician Lil Nas X – the limited edition “Satan Shoes.” The Satan Shoes are constructed from Nike Air Max 97 shoes and feature a black and red motif, a pentagram charm on the laces, and the writing “Luke 10:18” which refers to the biblical verse “I saw Satan fall like lightening from heaven.” The shoes also contain red ink in the soles and a drop of human blood, which was provided by MSCHF team members.[1] The shoes, priced at $1,018, sold out in minutes and are individually numbered from 1 to 666, as is common with copies of artistic works. The collaboration came after the release of Lil Nas X’s music video for his song “Montero (Call Me by Your Name)”, which features several biblical motifs and includes the musician gyrating on Satan. Both the music video and the Satan Shoes have generated significant controversy on social media, including Tweets from individuals boycotting Nike over perceived involvement with the shoes, which feature the Nike Swoosh prominently on the side and tongue of the shoe.

Nike put out a statement confirming it is not involved with the shoes, and filed a lawsuit against MSCHF on claims of trademark infringement and trademark dilution. Pointing to the upheaval on social media about the shoes, Nike claims that there is significant confusion in the marketplace that Nike is involved with or endorsed the Satan Shoes.[2] Nike also petitioned the Eastern District Court in New York for a preliminary injunction and restraining order, halting further sales and shipments of the shoes.[3] The Court granted the restraining order, finding that Nike had shown a sufficient likelihood of success on some of its claims and a likelihood of irreparable harm.[4] MSCHF, which has been described previously by The New York Times, as the “Banksy of the Internet”,[5] does not dispute that it used Nike’s mark. Rather, it believes that its use is excusable because it was used in an artistic context.

MSCHF defines itself as “a conceptual art collective known for interventions that engage fashion, art, tech, and capitalism in various, often unexpected, mediums.”[6] And indeed, consistent with their mission, MSCHF has previously put out similar art-shoe projects involving “involuntary collaborations” with brands. These projects have included the “Birkinstock”, Birkenstock style sandals that are made using refashioned Hermes Birkin bags and the “Jesus Shoe”, a natural foil to the controversial Satan Shoe. The Jesus Shoe, which sold for $3,000 a pair, were also created from Nike Air Max 97 trainers, and contained holy water from the River Jordan in the soles. The laces featured a gold crucifix charm on the shoe and the verse Matthew 14:25 stitched on the side, which reads: “And in the fourth watch of the night he came to them, walking on the sea.” The Jesus Shoes, created in 2019, were intended by MSCHF to comment on the absurdity of collaboration culture.[7] Specifically, MSCHF states: “As a manifested speculative artwork, Jesus Shoes conflates celebrity collab culture and brand worship with religious worship into a limited edition line of art objects.”[8] And despite the presence of the Nike Swoosh on the Jesus Shoes and Nike’s lack of involvement, as well as public backlash against the shoes, Nike did not take any adverse action against MSCHF or the Jesus Shoes in 2019.

MSCHF again argues for the Satan Shoes, which also incorporate the Nike Swoosh (albeit more prominently than the Jesus Shoe), that a necessary part of art is to create inside of the real world; “We believe it is better to make art that participates directly in its subject matter. It is stronger to do a thing, than to talk about a thing. MSCHF makes artworks that live directly in the systems they critique, instead of hiding inside white-walled galleries.”[9] Indeed, MSCHF believes itself to be using the Nike Swoosh to make an artistic statement rather than in a consumer context, and that the Nike Swoosh contributes to the overall artistic message.[10] MSCHF is a regular creator of pieces using consumer items, with its first release being “The Persistence of Chaos”, which comprised a 2008 Windows laptop loaded with six malware programs that had purportedly caused millions in damage worldwide. Earlier this year, MSCHF released “Axe No. 5”, a limited run perfume that mixed Axe Body Spray and Chanel No. 5 perfume.[11] While the quality of the artwork may be debatable in certain circles, it is undeniable that these works are seen at least by their creator as art intended to inspire social commentary and discussion, making it unsurprising that it is seeking artistic exemption from infringement in the present dispute. MSCHF specifically argues that its products are not commercial products, but instead a limited run of individually numbered works of art sold to discerning, sophisticated purchasers.[12]

Regardless of ultimate ideologies and feelings brought about by the Satan Shoes, these shoes present an interesting opportunity to explore the collision between trademark law and the First Amendment. To the chagrin of some trademark holders, the First Amendment does provide leeway for creative use of trademarks in an artistic context, even when that use may result in a likelihood of consumer confusion.

Trademark Infringement and the First Amendment

For many years the courts grappled with how to reconcile the First Amendment’s freedom of speech protections with the Lanham Act’s policy of preventing consumer confusion and deception; however, many courts have since settled on some version of the test first introduced by the Second Circuit in Rogers v. Grimaldi.[13] The goal of the Rogers test is to limit the application of the Lanham Act to expressive works where “the public interest in avoiding consumer confusion outweighs the public interest in free expression.”[14] Thus, the First Amendment and Lanham Act tolerate some levels of likelihood of confusion as to not chill protected expressive speech. Under the Rogers test, the use of another’s mark in an expressive work will not be actionable under the Lanham Act unless it “has no artistic relevance to the underlying work whatsoever, or if it has some artistic relevance, unless [it] explicitly misleads as to the source or content of the work.”[15] These factors are not a rigid test to be applied mechanically, but instead a balancing test that recognizes that the trademark rights of the senior user and the public’s right to not be confused must be carefully weighed against the artistic license granted to the junior user.[16]

The first consideration, “artistic relevance”, is a factual issue that evaluates the relevance of the mark to the overall work as a whole. This degree of relevance is purposefully low—above zero—to avoid forcing judges to make what are essentially subjective judgments about the mark’s intrinsic artistic value in the context of an expressive work.[17] Thus, courts have been extremely liberal in finding artistic relevance, and very few cases have found no artistic relevance.[18] For this reason, it is highly likely the Court would find the Satan Shoes to be using the Nike Swoosh in an artistically relevant way.

The second factor, “explicitly misleading” requires a plaintiff to prove that the mark’s use expressly and obviously misleads as to the source of the work. “Explicitly mislead” requires more than a finding of a likelihood of confusion. The Second Circuit has emphasized that the “finding of the likelihood of confusion must be particularly compelling to outweigh the First Amendment interest recognized in Rogers.”[19] The Ninth Circuit has cautioned that the “explicitly misleads” requires proof that the content, packaging, or advertising of the accused work clearly conveys the message that the plaintiff is affiliated with the work. This factor would be harder for MSCHF to fight against. The Satan Shoes do alter the Nike Air Max 97 shoes, but they do so in a manner similar to other collaborations Nike has done with other artists and entities.[20] With that said, several courts, including the Second Circuit, have issued decisions implying that “explicitly misleading” may require overt and express misstatements by the alleged infringer and not merely use of the mark.[21] MSCHF has never claimed any involvement or collaboration with Nike, and has consistently stated that its collaboration partner for the Satan Shoes is Lil Nas X and not Nike.

Since the Rogers factors were introduced over 30 years ago, other courts have also introduced additional considerations when evaluating artistic works in the context of a trademark infringement dispute. These considerations were collected by the US District Court in Colorado in Stouffer v. National Geographic Partners, LLC and include:

  • Whether the senior and junior users of the mark identify the same or similar kind of goods and services.
  • To what extent the junior user added his or her own expressive content to the work beyond the mark itself.
  • Whether the timing of the junior user’s use of the mark suggests a motive to capitalize on the popularity of the senior user’s mark.
  • In what way, if any, the mark is artistically related to the underlying work, service or product.
  • Statements made by the junior user to the public that suggest a non-artistic purpose.
  • Statements made or conduct engaged in in private by the junior user that suggests a non-artistic purpose.[22]

Each of these factors and others could be considered by the Court in addition to the Rogers test in efforts to balance Nike’s rights in its trademarks against MSCHF’s rights in creative expression.

Trademark Dilution and the First Amendment

What is also concerning to Nike is trademark dilution. Under the Trademark Dilution Revision Act, owners of distinctive famous are entitled to injunctions where a junior user’s use of the famous mark causes dilution by blurring or tarnishing the mark, regardless of any actual or likely confusion, of competition, or any actual economic injury.[23] Nike has established in prior cases that the Nike Swoosh is famous,[24] so the larger question is whether the Satan Shoes are likely to tarnish the Nike Swoosh and whether that risk of tarnishment is so great that it outweighs MSCHF’s creative expression rights. Courts have frequently enjoined the tarnishment of a mark through association with unsavory or scandalous goods, persons, or services.[25] Nike argues in its Complaint that the Satan Shoes are causing dilution by tarnishment by associating the Nike Swoosh with satanic symbols and imagery.

A straightforward application of dilution laws may lead to the conclusion that the Satan Shoes tarnish the Nike Swoosh, despite MSCHF’s claimed noncommercial use (which is exempted from dilution laws). But the First Amendment issues further influence this analysis, particularly after the Supreme Court’s 2017 decision in Matal v. Tam.[26] In Tam, the Court evaluated the constitutionality of the disparagement clause in federal trademark law after an Asian-American musical group named “The Slants” was refused trademark registration because the name was disparaging to those of Asian descent. The eight justices[27] unanimously agreed that the law violated the free speech clause of the First Amendment because the government was discriminating against certain trademarks based upon viewpoint and was targeting offensive expression with the intent of discouraging its use.

While scholars have long mused that dilution laws may run contrary to the First Amendment, the Tam decision and other recent jurisprudence have raised the question among legal commentators as to whether dilution laws could be overturned or found unconstitutional.[28] Prior to Tam, courts had generally avoided First Amendment scrutiny of trademark laws, arguing that intellectual property laws regulate commercial conduct and not speech.[29] The Federal Circuit en banc decision in In re Tam recognized this hesitation, conceding that “courts have been slow to appreciate the expressive power of trademarks.”[30] For Tam, the Asian-American band specifically picked the name “The Slants” in an act of reclamation of the derogatory term and was expressive speech. Recognizing that modern trademarks operate in socially significant ways, which can often go beyond just the products or services the mark holder offers, ultimately results in the question of how far trademark law will bend to accommodate expressive speech.[31]

Because famous marks are more likely to be appropriated for an expressive purpose, dilution is brought into sharp focus. As observed by Professor Robert Denicola more than 30 years before Tam, famous marks have particular utility in expressive works:

Famous trademarks offer a particularly powerful means of conjuring up the image of their owners, and thus become an important, perhaps at times indispensable, part of the public vocabulary.  Rules restricting the use of well-known trademarks may therefore restrict the communication of ideas. When this occurs, the confrontation between trademark protection and free speech can no longer be ignored. . . . Since a trademark may frequently be the most effective means of focusing attention on the trademark owner or its product, the recognition of exclusive rights encompassing such use would permit the stifling of unwelcome discussion. Though other means of communication may be available, trademark use often offers opportunities unmatched by more conventional methods of expression.[32]

MSCHF has not specifically stated why it chose Nike shoes specifically for the Jesus Shoes or Satan Shoes, but given Nike’s immense brand value, topping the Brand Finance “most valuable apparel companies” for 7 years,[33] there is certainly a probability that the choice to use Nike shoes specifically was distinctly related to MSCHF’s artistic message.

For the time being, it looks like these questions will go unanswered. On April 8, 2021, Nike and MSCHF announced that they had reached a settlement. As part of the settlement, MSCHF has agreed to a voluntary recall and will buy back any Satan Shoes and Jesus Shoes for the original retail price. MSCHF’s attorney indicated that they are pleased with the settlement and feel that the publicity the case brought to MSCHF and its artistic works achieved the artistic purpose of the Satan Shoes and Jesus Shoes.[34] Settling the case will allow MSCHF to focus on new artistic works, the next of which is scheduled to drop on April 12, 2021.[35] Whether any buyers of the Satan Shoes or Jesus Shoes will take MSCHF upon their refund offer remains to be seen.

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[1] Bryan Peitsch, “Nike Sues over Unauthorized ‘Satan Shoes’”, The New York Times (last updated April 9, 2021) (https://www.nytimes.com/2021/03/28/style/nike-satan-shoes-lil-Nas-x.html).

[2] Id.

[3] Bill Donahue, “Nike Wins Restraining Order on Lil Nas X ‘Satan Shoes’”, Law360.com (Apr. 1, 2021) (https://www.law360.com/articles/1371374/nike-wins-restraining-order-on-lil-nas-x-satan-shoes-).

[4] Order, Nike, Case No. 1:12-cv-019679-EK-PK (E.D.N.Y. Apr. 1, 2021).

[5] Sanam Yar, “The Story of MSCHF, a Very Modern . . . Business?”, The New York Times (updated Mar. 30, 2021) (available at https://www.nytimes.com/2020/01/30/style/MSCHF-sneakers-culture.html).

[6] Satan Shoe Statement, MSCHF.com (Apr. 1, 2021) (https://mschf.xyz/statement.pdf).

[7] Stephanie Dube Dwilson, “’Satan Shoes’ with Drops of Blood Announced by Company Behind ‘Jesus Shoes’”, Heavy, Inc. (Mar. 29, 2021) (https://heavy.com/news/nike-satan-shoes/). Heavy.com

[8] Satan Shoe Statement, MSCHF.com (Apr. 1, 2021) (https://mschf.xyz/statement.pdf).

[9] Id.

[10] Id.

[11] “Axe No. 5”, MSCHF (https://axenumbercensored.com/).

[12] MSCHF specifically argues that its purchasers could only obtain the shoes through MSCHF’s proprietary app, and who would be already familiar with the nature of MSCHF’s works and approach to art. Letter from MSCHF Counsel (Mar. 31, 2021) (available at https://www.documentcloud.org/documents/20536836-nike_v_mschf_defendant_letter).

[13] 6 McCarthy on Trademarks and Unfair Competition § 31.1440 (5th ed.).

[14] Rogers v. Grimaldi, 875 F.2d 994, 999 (2d Cir. 1989).

[15] Id. at 999.

[16] 6 McCarthy § 31:144.50

[17] Id.

[18] Lynn M. Jordan & David M. Kelly, “Another Decade of Rogers v. Grimaldi: Continuing to Balance the Lanham Act with the First Amendment Rights of Creators of Artistic Works,” 109 TMR 833, 838 (September-October 2019).

[19] 6 McCarthy § 31:144.50.

[20] See Nike News – Collaborations (last accessed Apr. 7, 2021) (https://news.nike.com/collaborations).

[21] Jordan, 109 TMR at 852.

[22] 400 F.Supp.2d 1161, 1179 (D. Colo. 2019).

[23] 15 U.S.C. § 1125(c)(1).

[24] See e.g., Nike, Inc. v. Nikepal Intern., Inc., 2007 WL 2782030 (E.D. Ca. Sept. 18, 2007); Nike Inc. v. Variety Wholesalers, Inc., 274 F.Supp. 2d 1352 (S.D. Ga. 2003).

[25] Anheuser-Busch, Inc. v. Balducci Publications, 28 F.3d 769, 777 (8th Cir. 1994).

[26] 137 S. Ct. 1744 (2017).

[27] Justice Neil Gorsuch did not participate in the consideration or decision.

[28] Lisa P. Ramsey, “Free Speech Challenges to Trademark Law After Matal v. Tam”, 56 Hous. L. Rev. 401 (2018); Sara Gold, “Does Dilution ‘Dilute’ the First Amendment?: Trademark Dilution and the Right to Free Speech after Tam and Brunetti”, 59 IDEA: L. Rev. Franklin Pierce Center for Intell. Prop. 483, 489 (2019) (student work).

[29] Alfred C. Yen, “Choosing the Consequences of Tam and Brunetti”, 16 Chi.-Kent J. Intell. Prop. 396,

[30] 137 S. Ct. 1744 (2017).

[31] Giulio Ernesto Yaquinto, “The Social Significance of Modern Trademarks: Authorizing the Appropriation of Marks as Source Identifiers for Expressive Works”, 95 Tex. L. Rev. 739 (Feb. 2017) (student work).

[32] Robert C. Denicola, “Trademarks as Speech: Constitutional Implications of the Emerging Rationales for the Protection of Trade Symbols,” 1982 Wis. L. Rev. 158, 195–197

[33] “Nike Tops Brand Finance’s Most Valuable Brands List, Rolex Claims ‘Strongest’ Title”, TheFashionLaw.com (Apr. 8, 2021) (https://www.thefashionlaw.com/nike-tops-brand-finances-of-most-valuable-brands-rolex-claims-strongest-title/).

[34] Hannah Albarazi, “Nike Resolves Bad Blood with Lil Nas X ‘Satan Shoes’ Seller”, Law360.com (Apr. 8, 2021).

[35] MSCHF (https://mschf.xyz/).