Vans, Inc. v. MSCHF Product Studio, Inc.

22-1006
Vans, Inc. v. MSCHF Product Studio, Inc.



                                                In the
                     United States Court of Appeals
                                  For the Second Circuit
                                            ______________

                                           August Term, 2022

              (Argued: September 28, 2022 Decided: December 5, 2023)

                                           Docket No. 22-1006
                                            ______________

                                 VANS, INC., VF OUTDOOR, LLC.,

                                              Plaintiffs-Appellees,

                                                  –v.–

                                 MSCHF PRODUCT STUDIO, INC.,

                                             Defendant-Appellant.

                                            ______________

        Before:          JACOBS, CHIN, and ROBINSON, Circuit Judges.
                                      ______________

       Defendant-Appellant MSCHF Product Studio, Inc. (“MSCHF”), the creator
of the Wavy Baby sneaker, appeals from the April 29, 2022 order of the United
States District Court for the Eastern District of New York (Kuntz, J.) granting the
request by Plaintiffs-Appellees Vans, Inc., and VF Outdoor, LLC (collectively
“Vans”) for 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 argues 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; the
preliminary injunction is an unconstitutional prior restraint on MSCHF’s free
expression; the district court erred in requiring MSCHF to place its Wavy Baby
revenues in escrow; and the district court erred by failing to make a bond
determination.
       The main issues in this appeal are governed by the United States Supreme
Court’s recent decision in Jack Daniel’s Properties, Inc. v. VIP Products LLC, 

 (2023). Applying Jack Daniel’s, we conclude that Vans is likely to prevail in
arguing that MSCHF’s Wavy Baby shoes used Vans’ marks and trade dress as
source identifiers, and thus no special First Amendment protections apply to
protect MSCHF against Vans’ trademark infringement claim. As such, 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. We further conclude that the district court did not
err in requiring MSCHF to escrow its revenues from Wavy Baby sales, and that
the district court was not required to make a bond determination because MSCHF
never requested security. We therefore AFFIRM.


                                   ______________

                                 DAVID H. BERNSTEIN (Megan K. Bannigan,
                                 Debevoise & Plimpton LLP, New York, NY;
                                 William D. Patterson, Swanson, Martin & Bell,
                                 LLP, Chicago IL, on the brief), for Defendant-
                                 Appellant.

                                 LUCY JEWETT WHEATLEY, McGuire Woods LLP,
                                 Richmond, VA (Philip A. Goldstein, McGuire
                                 Woods LLP, New York, NY; Tanya L. Greene,
                                 McGuire Woods LLP, Los Angeles, CA, on the
                                 brief), for Plaintiffs-Appellees.

                                 Vivek Jayaram, Jayaram Law Group, Chicago, IL,
                                 for Amicus Curiae Daniel Arsham in Support of
                                 Defendant-Appellant.

                                          2
Ronald D. Coleman, Dhillon Law Group Inc.,
Newark, NJ, for Amici Curiae Emmanuel Perrotin,
Jean-Paul Engelen in Support of Defendant-Appellant.

Mark A. Lemley, Lex Lumina PLLC, New York,
NY, for Amici Curiae Intellectual Property Professors
in Support of Plaintiffs-Appellees.

John P. O’Herron (Zachary D. Cohen, Rachel W.
Adams, on the brief), ThompsonMcMullan, P.C.,
Richmond, VA, for Amici Curiae American Apparel &
Footwear Association, Footwear Distributors &
Retailers of America, Council of Fashion Designers of
America, Inc., and Accessories Council in Support of
Plaintiffs-Appellees.

Stanley Panikowski, DLA Piper LLP (US), San
Diego, CA (Tamar Y. Duvdevani, DLA Piper LLP
(US), New York, NY, on the brief), for Amicus Curiae
Nike, Inc., in Support of Plaintiffs-Appellees.

Vijay K. Toke, Rimon P.C., San Francisco, CA
(Martin Schwimmer, Leason Ellis LLP, White
Plains, NY; David Donahue, Fross Zelnick
Lehrman & Zissu, P.C., New York, NY, on the brief),
for Amicus Curiae International Trademark
Association in Support of neither party.

Rhett O. Millsaps II, Lex Lumina PLLC, New York,
NY (Mark P. McKenna, Christopher J. Sprigman,
Rebecca Tushnet, on the brief), for Amici Curiae
Authors Alliance, Mason Rothschild, Alfred Steiner in
Support of neither party.

 ______________



         3
PER CURIAM:


      In this case, defendant-appellant MSCHF Product Studio, Inc. (“MSCHF”),

created a sneaker, the Wavy Baby, that purported to parody the Old Skool shoe,

created and marketed by plaintiff-appellee Vans, Inc. (“Vans”), and thereby

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 one hour.

Vans, unsurprisingly, was not amused.


      The central issue in this case is whether and when an alleged infringer who

uses another’s trademarks for parodic purposes is entitled to heightened First

Amendment protections, rather than the Lanham Act’s traditional likelihood of

confusion inquiry.


      The Supreme Court recently addressed this issue in Jack Daniel’s Properties,

Inc. v. VIP Products LLC, 

 (2023). There, the Court 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.” Id. at 156 (citation omitted). Applying
                                         4
Jack Daniel’s, we conclude that no special First Amendment protections apply to

insulate MSCHF against Vans’ trademark infringement claim. 1                       As to those

trademark infringement claims, the district court did not err in concluding that

Vans is likely to prevail on the merits. We further conclude that the district court

did not err in requiring MSCHF to escrow its revenues from Wavy Baby sales, and

that the district court was not required to make a bond determination because

MSCHF never requested security. We therefore AFFIRM.


                                      BACKGROUND 2


I.     Facts


       A.      Vans

       Vans is a globally known footwear and apparel company that specializes in

skateboard-friendly shoes and sneakers.                The company, founded in 1966,

originally catered to customers in Southern California. Vans became popular

among skateboarders, celebrities, and the public. One of Vans’ most recognizable

products is its “Old Skool” shoe, shown below:




1 After we heard oral argument, we held the case pending a decision by the Supreme Court in
Jack Daniel’s. After the Supreme Court ruled, the parties submitted supplemental briefing.
2 This account is drawn from the record relied upon by the district court, comprising the parties’

declarations and exhibits.


                                                5
                                Vans Old Skool Shoe

Jt. App’x at 13, 15.

      The Old Skool trade dress consists of a combination of 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. Jt. App’x at 256. It also

features a distinctive “waffle sole” design. Id. at 258. The Old Skool is one of Vans’

most popular shoes and sold for about $60 a pair. Most Old Skool shoes are black

and white, but Vans has expanded the shoes to come in a variety of colors or color

arrangements.


      Vans often collaborates with artists and celebrities to design and sell special

edition versions of its shoes, including the Old Skools.            Beyond official

collaborations, many of the rich and famous have been photographed wearing the

Vans Old Skool.        In short, the Old Skool is an iconic Vans sneaker, easily



                                          6
recognizable by both “sneakerheads” and the uninitiated. Id. at 273 (explaining

that sneakerheads are people who collect shoes to display them, but “rarely” to

wear them).


      B.      MSCHF

      MSCHF is a Brooklyn-based art collective “known as (and for) MSCHF.” Id.

at 271. MSCHF’s mission is to use artwork “to start a conversation about consumer

culture . . . by participating in consumer culture.”      Id. at 486–87.   MSCHF

recontextualizes everyday objects as a means of commenting on contemporary

society. MSCHF’s work has been displayed in museums, galleries, auction houses,

and art shows worldwide, including Phillips Auction House, Art Basel, the Design

Museum of London, and the Perrotin gallery.


      MSCHF’s works are often sold with “manifestos” that explain the work’s

commentary and are sold in “drops,” or prescribed sales periods. Recent drops

have critiqued music, the political system, consumerism, digital media,

standardized testing, holidays, and the legal system.       And often, MSCHF’s

“drops” will sell out in a day.


      MSCHF has recently focused its artistic expression on “sneakerhead

culture.” Sneakers are utilitarian objects for most, but for sneakerheads, shoes are

expressive, “collect[ed], trade[d], and display[ed] as a hobby.” Id. at 497. MSCHF
                                         7
critiques the consumerism present in sneakerhead culture, as well as sneaker

companies’ practice of collaborating with “anyone and everyone to make money.”

Id. at 352.


       C.     The Wavy Baby

       This case is about MSCHF’s sneaker drop of the “Wavy Baby” shoe,

depicted below:




                               MSCHF “Wavy Baby”


Jt. App’x at 14, 17.


       MSCHF’s co-Chief Creative Officer explained MSCHF’s conception of the

connection between Vans’ Old Skool shoe and MSCHF’s Wavy Baby in the

following manner: “The Wavy Baby concept started with a Vans Old Skool

sneaker” because no other shoe embodies the dichotomies between “niche and

                                      8
mass taste, functional and trendy, utilitarian and frivolous” as perfectly as the Old

Skool. Id. at 353. The Wavy Baby design process thus started with an image of a

classic Vans Old Skool skate shoe. Id. MSCHF used a digital filter tool to warp the

shoe into a new image, “transform[ing] the once iconic shoe into the modern,

wobbly, and unbalanced realities.” Id. at 353–54. One evident feature of the

parody is that the distortion destroys the original premise of the Old Skool’s

popularity—its utility as a skateboarding shoe due to its flat sole.


      Wavy Baby 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. Examples of the critical similarities, and distortions,

are reflected in the graphics below.


     Vans’ Trademarks/Trade Dress                   WAVY BABY Design




                                          9
Vans’ Trademarks/Trade Dress        WAVY BABY Design




                               10
       Vans’ Trademarks/Trade Dress               WAVY BABY Design




Jt. App’x at 171–72; 252–53.

       Prior to the Wavy Baby’s release, MSCHF engaged in a marketing campaign

in collaboration with musical artist Michael Stevenson, also known as Tyga. Id. at

363.   MSCHF advertised the Wavy Baby collaboration before releasing the

sneakers for sale—garnering hype and excitement through MSCHF’s website,

Instagram and YouTube accounts, and sneaker-focused platforms. Tyga also

released a music video in which he wore the Wavy Baby shoe. Id. at 377.


       Upon learning of the impending drop of the Wavy Baby shoe, Vans sent a

cease and desist letter to Tyga on April 5, 2022, and to MSCHF the following day,

putting them on notice of their claim that the Wavy Baby shoes infringed their

trademarks and trade dress. MSCHF, however, continued to promote the planned

drop and on April 18, 2022, after this suit commenced, launched the pre-planned

                                       11
one-hour drop of 4,306 Wavy Baby shoes. Customers purchased the shoes only

on MSCHF’s proprietary app for $220.


II.   District Court Proceedings

      Vans filed a complaint in United States District Court for the Eastern District

of New York on April 14, 2022, alleging six claims under state and federal law,

including a federal claim for trademark infringement under the Lanham Act. 

.


      On April 15, 2022, Vans filed a motion for a temporary restraining order and

preliminary injunction asking the district court to enjoin MSCHF from: (1)

fulfilling orders for or otherwise releasing for sale to the public any of the “Wavy

Baby” shoes, or colorful imitations or reconstructions thereof (the “Prohibited

Shoes”); (2) using Vans’ Old Skool trade dress or marks or confusingly similar

marks (collectively, the “Prohibited Marks”); (3) referring to or using any

Prohibited Marks in any advertising, marketing, or promotion; and (4) aiding any

other person or entity in taking the prohibited actions. Jt. App’x at 65, 147. Vans

attached to its motion several supporting declarations with exhibits. MSCHF

opposed the motion with numerous declarations and exhibits.

      After oral argument on April 27, 2022, the district court granted the

temporary restraining order and preliminary injunction, concluding primarily

                                         12
that because Vans had shown a significant danger of consumer confusion, Vans

would likely prevail on its trademark infringement claims; it had shown that it

would suffer irreparable harm without injunctive relief; and the balance of

hardships and public interest supported preliminary relief. Vans, Inc. v. MSCHF

Product Studio, Inc., 

, 371–73 (E.D.N.Y. 2022).


      In concluding that Vans would likely prevail on the consumer confusion

issue, the court considered the factors set forth in Polaroid Corp. v. Polarad

Electronics Corp., 

 (2d Cir. 1961). See Vans, 602 F. Supp. 3d at 367–70.

In particular, the Court concluded that MSCHF’s distortion of the Old Skool marks

and trade dress on the Wavy Baby shoes was not sufficient to dispel the consumer

confusion arising from the similarity of the marks. Id. at 368. It relied on evidence

that various consumers “misunderstood the source of the Wavy Baby shoes as a

collaboration between [Vans] and [MSCHF],” id., and admissions by MSCHF’s

own representatives that the “base” of the Wavy Baby shoe before MSCHF’s

transformation was the Vans Old Skool. Id.


      The court further concluded that the “sophistication of the buyers” factor

weighed in Vans’ favor because MSCHF advertised the Wavy Baby broadly in

conjunction with Tyga, sold the shoes directly to the general public, and shoes are

generally a common consumer item. Id. at 368–69.

                                         13
      Moreover, the court concluded that the market proximity of the Wavy Baby

shoes and Vans’ Old Skool shoes enhanced the likelihood of consumer confusion.

Id. at 369. The court rejected MSCHF’s suggestion that the Wavy Baby shoes were

not, like Old Skool shoes, intended to be worn but were instead “collectible

work[s] of art,” that were “likely to be kept in glass cases or on shelves.” Id. In

rejecting MSCHF’s claim, it pointed to statements of MSCHF’s own representative,

the quantity of shoes produced (4,306 pairs), and the fact that MSCHF held back

some shoes in case the shoes shipped were the wrong size, thereby suggesting the

Wavy Baby is to be worn. Id.


      The district court rejected MSCHF’s contention that Wavy Baby, as a parodic

work of artistic expression, was subject to special First Amendment protections

rather than the traditional likelihood of confusion test. Id. at 370–71. The court

acknowledged that courts have “accorded considerable leeway to parodists whose

expressive works aim their parodic commentary at a trademark or a trademarked

product,” but emphasized that they “have not hesitated to prevent a manufacturer

from using an alleged parody of a competitor’s mark to sell a competing product.”

Id. at 370 (quoting Harley Davidson, Inc. v. Grottanelli, 

 (2d Cir.

1999)). Moreover, the court observed that even while purporting to represent “the

original,” a successful parody must simultaneously convey “that it is not the

                                        14
original and is instead a parody.” 

 (emphasis added) (quoting Cliffs Notes, Inc.

v. Bantam Doubleday Dell Publ’g Grp., Inc., 

 (2d Cir. 1989)). The

court concluded that the Wavy Baby shoes on their face did not clearly indicate to

the ordinary observer that MSCHF is “not connected in any way with the owner

of the target trademark.” 

 at 370–71 (quoting Louis Vuitton Malletier, S.A. v. My

Other Bag, Inc., 

 (S.D.N.Y. 2016), aff’d, 

 (2d

Cir. 2016)).


      For these reasons, the district court granted Vans’ motion for a temporary

restraining order and preliminary injunction, prohibiting MSCHF from

advertising or fulfilling orders for the Wavy Baby shoes, and ordering MSCHF to

cancel any orders that had been placed for the shoes at the time of the court’s order,

and to escrow the funds received from orders that could not be reversed. MSCHF

appealed.


                                   DISCUSSION

      On appeal, MSCHF argues that the district court erred in concluding that

Vans was likely to succeed on the merits of its trademark infringement claim

because Vans’ claims are precluded by the First Amendment. For the same reason,

MSCHF argues that the district court’s injunction prohibiting Vans from

advertising the Wavy Baby shoes amounts to an unconstitutional prior restraint of
                                         15
speech. Finally, MSCHF argues that the district court erred in requiring it to

escrow all revenues from Wavy Baby sales, and in failing to require Vans to give

security.


      After considering the applicable standard of review, we consider each

argument in turn.


I.    Standard of Review

      We review a district court’s grant of a temporary restraining order (“TRO”)

or preliminary injunction for abuse of discretion. See Sunward Electronics, Inc. v.

McDonald, 

 (2d Cir. 2004). “An abuse of discretion may be found

when the district court relies on clearly erroneous findings of fact or on an error of

law in issuing the injunction.” Cliffs Notes, 

 (citation omitted).


      Although we review a district court’s grant of a preliminary injunction for

abuse of discretion, Citigroup Glob. Mkts., Inc. v. VCG Special Opportunities Master

Fund Ltd., 

 (2d Cir. 2010), any “allegations of error in a preliminary

injunction [that] involve questions of law” are reviewed without deference. Briggs

v. Bremby, 

 (2d Cir. 2015) (citing Am. Express Fin. Advisors Inc. v.

Thorley, 

, 231 (2d Cir. 1998)).




                                          16
II.   Trademark Infringement, the First Amendment, and Wavy Baby

      To evaluate whether the district court abused its discretion in concluding

that Vans was likely to succeed on its infringement claims, we must first

determine whether Wavy Baby is subject to trademark law’s traditional

likelihood of confusion analysis or whether it is an expressive work entitled to

heightened First Amendment scrutiny under Rogers v. Grimaldi, 

 (2d

Cir. 1989). We begin with an overview of the two frameworks before addressing

the Supreme Court’s recent guidance in Jack Daniel’s, applying the lessons of that

decision to this case, and evaluating the district court’s application of the Polaroid

factors.


      A.     The Lanham Act

      The Lanham Act defines a trademark as “any word, name, symbol, or

device, or any combination thereof” that a manufacturer uses to distinguish the

manufacturer’s goods from those manufactured or sold by others and to “indicate

the source of the goods.” 

. As the Jack Daniel’s Court observed, a

trademark “enables customers to select ‘the goods and services that they wish to

purchase, as well as those they want to avoid.’” Jack Daniel’s, 599 U.S. at 146

(quoting Matal v. Tam, 

 (2017)). A trademark holder “derive[s]

significant value from its marks” because such marks “ensure that the producer

                                          17
itself—and not some ‘imitating competitor’—will reap the financial rewards

associated with the product’s good reputation.” 

 (citing Qualitex Co. v. Jacobson

Prods. Co., 

 (1995)).


      To prevail on a trademark infringement claim under the Lanham Act, the

plaintiff must show that: (1) plaintiff owns a valid protectable mark; and (2)

defendant’s use of a similar mark is likely to cause consumer confusion as to the

origin or association of the goods or services. See Christian Louboutin S.A. v. Yves

Saint Laurent Am. Holdings, 

, 216–17 (2d Cir. 2012). MSCHF does not

challenge the district court’s conclusion that Vans owns valid and protectable

marks in its Old Skool shoes; in any case, Vans’ marks are registered, which is

prima facie evidence that they are valid and protectable. See Matal v. Tam, 

, 226–27 (2017). Accordingly, the focus of our inquiry on appeal is the second

prong: likelihood of consumer confusion.


      This Court applies the eight-factor test identified in Polaroid, 

,

to assess the likelihood that an allegedly infringing product will create consumer




                                          18
confusion. 3 The eight factors are: (1) strength of the trademark; (2) similarity

between the two marks; (3) proximity of the products and their competitiveness

with one another; (4) likelihood the prior owner may “bridge the gap” in the

markets for their products; (5) evidence of actual consumer confusion; (6) the

defendant’s good faith in adopting its imitative mark; (7) quality of the defendant’s

product compared with the plaintiff’s product; and (8) sophistication of the

buyers. 

 Collectively, these factors establish whether the allegedly infringing

product creates consumer confusion.


       B.      The Rogers Test

       The traditional infringement inquiry may be applied more narrowly if the

allegedly infringing good or service is a work of “artistic expression.” See Rogers,

. In Rogers, this Court held that the Lanham Act should not apply

to “artistic works” as long as the defendant’s use of the mark is (1) artistically

relevant to the work, and (2) not “explicitly misleading” as to the source or content

of the work. 

; see also Twin Peaks Prods., Inc. v. Publ’ns Int’l, Ltd, 996 F.2d


3Other circuits apply balancing tests that are substantially the same. See, e.g., Louis Vuitton
Malletier S.A. v. Haute Diggity Dog, LLC, 

, 259–63 (4th Cir. 2007) (applying the
Pizzeria Uno factors as articulated in Pizzeria Uno Corp. v Temple, 

 (4th Cir.
1984)); Brookfield Commc’ns, Inc. v. West Coast Ent. Corp., 

 (9th Cir. 1999)
(applying the Sleekcraft factors as articulated in AMF Inc. v. Sleekcraft Boats, 

, 348–49
(9th Cir. 1979)).



                                                 19
1366, 1379 (2d Cir. 1993) (requiring the likelihood of confusion to be “particularly

compelling” to outweigh the First Amendment concerns).


       Although Rogers involved a dispute over a film title, lower courts adopting

Rogers have applied its test to other kinds of works but have “confined it to similar

cases, in which a trademark is used not to designate a work’s source, but solely to

perform some other expressive function.” Jack Daniel’s, 599 U.S. at 154. Courts in

this Circuit have been careful to apply Rogers to a limited category of expressive

works, including the title and cover of books and magazines, see, e.g., Rogers, 875

F.2d at 1001–02 (film title); Twin Peaks, 996 F.2d at 1379–80 (book title); Cliffs Notes,

 (book title), and the use of trademarked products in feature films

and video games, see, e.g., Louis Vuitton Malletier S.A. v. Warner Bros. Ent. Inc., 

 (S.D.N.Y. 2012) (film); AM Gen. LLC v. Activision Blizzard, Inc.,

, 479–80 (S.D.N.Y. 2020) (video game).


      C.     Jack Daniel’s

      The Supreme Court’s recent decision in Jack Daniel’s clarified when the

Rogers test, 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.” 599 U.S. at 153.




                                           20
       Jack Daniel’s is a case “about dog toys and whiskey.” Id. at 144. Respondent

VIP Products created a dog toy called “Bad Spaniels” that was designed to look

like a bottle of Jack Daniel’s whiskey, with some playful changes. See id. For

example, VIP Products changed “Jack Daniel’s” to “Bad Spaniels,” “Old No. 7

Brand Tennessee Sour Mash Whiskey” to “The Old No. 2 On Your Tennessee

Carpet,” and “40% alc. by vol. (80 proof)” to “43% poo by vol.” and “100% smelly.”

Id. at 149–50. Jack Daniel’s did not appreciate the joke.


       The central question before the Supreme Court was whether the Rogers test

should have applied to Jack Daniel’s trademark infringement claims against VIP

Products, where VIP Products’ Bad Spaniels dog toy (the allegedly infringing

product) was an expressive or parodic work. 4 Though the Court acknowledged

that parodies are inherently expressive, it concluded that Rogers does not apply

when the alleged infringer uses trademarks to designate source. Id. at 153 (“[W]e

hold that [Rogers] does not [apply] when an alleged infringer uses a trademark in

the way the Lanham Act most cares about: as a designation of source for the

infringer’s own goods.”).


4Some sister circuits have adopted the Rogers test. See, e.g., Mattel, Inc. v. MCA Records, Inc., 

, 902 (9th Cir. 2002) (adopting Rogers test); Westchester Media v. PLR USA Holdings, Inc.,

 (5th Cir. 2000) (noting that Fifth Circuit has adopted the approach in Rogers).
The Supreme Court expressly used the Rogers test as a proxy for any threshold First
Amendment filter in the Lanham Act context. Jack Daniel’s, 599 U.S. at 153 n.1.


                                                 21
      The Court explained that, historically, Rogers has been confined to cases

where the trademark is not used to designate a work’s source, and instead is used

“solely to perform some other expressive function.” Id. at 154 (emphasis added).

In contrast, the use of another’s trademark that “convey[s] information (or

misinformation) about who is responsible for a product . . . ‘implicates the core

concerns of trademark law’ and creates ‘the paradigmatic infringement case.’” Id.

at 157 (alterations adopted) (citation omitted).

      Moreover, the Court declined to adopt the Ninth Circuit’s holding that

Rogers applied to all “expressive work[s].” Id. at 151–52. It reasoned that such an

expansive read of Rogers would “conflict with courts’ longstanding view of

trademark law,” as “few cases would even get to the likelihood-of-confusion

inquiry if all expressive content triggered the Rogers filter.” Id. at 158–59. Because

the Court concluded that VIP Products used its Bad Spaniels “trademark and trade

dress as source identifiers of its dog toy,” it held that Rogers did not apply to Jack

Daniel’s claims of infringement. Id. at 159–61 (internal citation omitted).

      Far from disregarding the parodic nature of the Bad Spaniel’s toy, however,

the Supreme Court noted that “a trademark’s expressive message—particularly a

parodic one . . . — may properly figure in assessing the likelihood of confusion.”

Id. at 161; see also id. at 159 (noting that “the likelihood-of-confusion inquiry does


                                         22
enough work to account for the interest in free expression”). This is because,

where a message of “ridicule or pointed humor” is clear, “a parody is not often

likely to create confusion” for “consumers are not so likely to think that the maker

of a mocked product is itself doing the mocking.” Id. at 161, 153; see id. at 161

(“[A]lthough VIP’s effort to ridicule Jack Daniel’s does not justify use of the Rogers

test, it may make a difference in the standard trademark analysis.”).


      D.     MSCHF’s Use of Vans’ Marks as Source Identifiers

      The Supreme Court’s decision in Jack Daniel’s forecloses MSCHF’s argument

that Wavy Baby’s parodic message merits higher First Amendment scrutiny under

Rogers.    As the Court held, even if a defendant uses a mark to parody the

trademark holder’s product, Rogers does not apply if the mark is used “‘at least in

part’ for ‘source identification.’” Id. at 156 (quoting Tommy Hilfiger Licensing, Inc.,

v. Nature Labs, LLC, 

, 414–15 (S.D.N.Y. 2002)).


      Here, MSCHF used Vans’ marks in much the same way that VIP Products

used Jack Daniel’s marks—as source identifiers.           As discussed above and

illustrated below, VIP Products used the Jack Daniel’s bottle size, distinctive

squared-off shape, and black and white stylized text to invoke an image of Jack

Daniel’s famous whiskey bottle.




                                          23
Jack Daniel’s, 599 U.S. 148–49.


      Likewise, MSCHF’s design evoked myriad elements of the Old Skool

trademarks and trade dress. Among other things, MSCHF incorporates, with

distortions, 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.

See Part I, above. MSCHF included its own branding on the label and heel of the

Wavy Baby sneaker, just as VIP Products placed its logo on the toy’s hangtag. But

even the design of the MSCHF logo evokes the Old Skool logo. And unlike VIP

Products, MSCHF did not include a disclaimer disassociating it from Vans or Old

Skool shoes. See Jack Daniel’s, 599 U.S. at 150 (noting the dog toy included a

disclaimer that read: “This product is not affiliated with Jack Daniel Distillery”).


     A trademark is 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



                                         24
product.” Id. at 156 (alterations adopted). MSCHF used Vans’ trademarks—

particularly its red and white logo—to brand its own products, which constitutes

“quintessential ‘trademark use’” subject to the Lanham Act. Id. at 155 (citation

omitted); see also Harley-Davidson, Inc. v. Grottanelli, 

, 812–13

(mechanic’s use of Harley-Davidson’s bar and shield motif in his logo, despite

the “humorous[]” message, was traditional trademark use subject to the

likelihood of confusion analysis).


      Moreover, although MSCHF did not purport to sell the Wavy Baby under

the Vans brand, it admitted to “start[ing]” with Vans’ marks because “[n]o other

shoe embodies the dichotomies—niche and mass taste, functional and trendy,

utilitarian and frivolous—as perfectly as the Old Skool.” Jt. App’x at 353. In

other words, MSCHF sought to benefit from the “good will” that Vans—as the

source of the Old Skool and its distinctive marks—had generated over a decades-

long period. See Jack Daniel’s, 599 U.S. at 156. Notwithstanding the Wavy Baby’s

expressive content, MSCHF used Vans’ trademarks in a source-identifying

manner. Accordingly, the district court was correct when it applied the

traditional likelihood-of-confusion test instead of applying the Rogers test.




                                          25
       E.      Application of the Polaroid Factors

       Having determined that the district court did not err in declining to apply

the Rogers test in evaluating Vans’ claims, we consider whether the district court

erred in its conduct of the traditional likelihood-of-confusion analysis. 5 We review

the district court’s overall likelihood-of-confusion determination without

deference. “[I]nsofar as the determination of whether one of the Polaroid factors

favors one party or another involves a legal judgment—which it often does—” we

review that determination without deference to the district court. Souza v. Exotic

Island Enterprises, 

 (2d Cir. 2023) (alteration adopted). And we

review the district court’s factual findings for clear error. See RiseandShine Corp. v.

PepsiCo, Inc., 

 (2d Cir. 2022).


       We agree with the district court’s assessment that Vans is likely to prevail

on the issue of whether the Wavy Baby causes consumer confusion. Like the

district court, we consider the factors identified in Polaroid in considering whether

MSCHF’s Wavy Baby is likely to cause consumer confusion as to the source of the

shoe. Polaroid, 

.



5We disagree with Vans’ argument that the likelihood-of-confusion analysis is not before us.
See Vans FRAP 28(j) Letter (June 20, 2023) at 1–2. Although the core of MSCHF’s argument on
appeal is that the district court erred in failing to apply Rogers, part of MSCHF’s opening brief
challenges the district court’s Polaroid analysis. See Appellant Br. at 42–60. Although its
argument has evolved slightly post-Jack Daniel’s, it was adequately preserved.

                                                26
        The strength of the marks at issue supports Vans. MSCHF expressly chose

the Old Skool marks and dress because it was the “most iconic, prototypical” skate

shoe there is, as conceded by MSCHF’s co-Chief Creative Officer. Jt. App’x at 353,

¶ 24.


        The similarity of the marks presents a closer question, as the marks on Wavy

Baby, while derived from the Old Skool shoes, are distorted. But MSCHF’s

creative officer, Lukas Bentel, admitted that the Wavy Baby sneaker design

intentionally evoked an image of Vans’ Old Skool sneaker. See S. App’x at 8–9

(“Yes, [Vans Old Skools] are the anchor of the shoe . . . .“); see also Harley-Davidson,

164 F.3d at 812–13 (concluding, in part, because defendant “admits that his use of

[Harley Davidson’s] bar-and-shield logo purposefully suggests an association

with Harley,” such use was impermissible under the Lanham Act. (internal

quotation marks omitted)).


        This admission is embodied in the Wavy Baby design: the Wavy Baby

features a combination of elements (e.g., a three-tiered appearance, textured toe

box, visible stitching, and red tags on the back), which are placed relative to one

another such that the Wavy Baby’s appearance evokes Vans’ Old Skool sneaker.




                                          27
       Plus, context matters. Though Vans has never warped its design in the same

“liquified” or “microwaved” manner as MSCHF’s work with the Wavy Baby,6

Vans has previously created special editions of its Old Skool sneaker often

collaborating in launching the sneakers with celebrities and high-profile brands

including Marc Jacobs, Supreme, Stussy, Kenzo, The North Face, and Disney. Jt.

App’x at 257–58, ¶ 12.


       The admittedly mimicked features of the Wavy Baby, combined with Vans’

history of collaborating with artists and other brands, support our conclusion that

the “similarity” factor favors Vans.


       In considering competitive proximity, we are concerned with “‘whether and

to what extent the two products compete with each other’ and ‘the nature of the

products themselves and the structure of the relevant market.’” Morningside Grp.

Ltd. v. Morningside Capital Grp., 

 (2d Cir. 1999) (quoting Cadbury

Beverages, Inc. v. Cott Corp., 

 (2d Cir. 1996)).                 “Among the

considerations germane to the structure of the market are the class of customers to

whom the goods are sold, the manner in which the products are advertised, and

the channels through which the goods are sold.” Cadbury Beverages, 

.



6MSCHF describes the Wavy Baby as a “‘liquified’ version of a classic skate shoe silhouette.” Jt.
App’x at 501.

                                               28
      The district court did not clearly err in rejecting MSCHF’s factual claim that

the Wavy Baby is a work of art meant to be displayed rather than a pair of sneakers

meant to be worn. Although it is hard to see why some people would wear the

Wavy Baby as a functional shoe, we owe that finding deference. Many people are

martyrs to fashion and dress to excite comment.


      Considering the Wavy Baby as a wearable sneaker, we agree with the

district court that the shoes are relatively proximate. MSCHF advertised the Wavy

Baby as a wearable piece of footwear in promotional social media posts and in the

promotional music video featuring Tyga. Vans’ own Old Skool limited releases

are often sold on the same secondary platforms as those that sell Wavy Baby shoes

to sneakerheads. Jt. App’x at 854. And where the Wavy Baby sold 4,306 units as

a limited-edition collaboration with Tyga at $220 per pair, Vans offers special

editions of its Old Skool sneakers made in collaboration with celebrities or artists,

sometimes selling for $180 per pair, and often selling a limited edition of 4,000

units. Id. at 785, 813, 893. Because we conclude that the products are competitively

proximate, we need not consider whether Vans may “bridge the gap” by

developing a product in MSCHF’s market.


      The district court did not clearly err in finding actual evidence of consumer

confusion, and we conclude as a matter of law that this factor favors Vans. The

                                         29
district court relied on evidence in the record that customers were actually

confused. For example, it pointed to comments made on a sneaker-centric podcast

with guest appearance by MSCHF’s chief creative officer, Lukas Bentel. Bentel

acknowledged the host’s comment that “[e]veryone [the host has] spoken to

about” the Wavy Baby agrees that if a person saw someone wearing Wavy Baby

sneakers on the street, “they’d say they’re wearing a pair of Vans.” Vans, 

; Complex Sneakers Podcast Recording at 31:16–33:46.


      It may be true that consumers who purchase the Wavy Baby shoes directly

from MSCHF and receive the accompanying “manifesto” explaining the genesis

of the shoes may not be confused. But the Lanham Act protects against several

categories of consumer confusion, “including point-of-sale confusion . . . initial

interest confusion, . . . and post-sale confusion.” Louis Vuitton Malletier v. Burlington

Coat Factory Warehouse Corp., 

, 537 n.2 (2d Cir. 2005) (emphases in

original) (internal citations omitted); see also Lois Sportswear, U.S.A., Inc. v. Levi

Strauss & Co., 

, 872–73 (2d Cir. 1986) (explaining that “post-sale

confusion would involve consumers seeing appellant’s [product] outside of the

retail store, perhaps being worn by a passer-by” and that “in this post-sale context

appellants’ labels, most of which having been long since discarded, will be of no

help”). The comments relied upon by the district court demonstrate both initial

                                           30
and post-sale confusion. The district court’s factual finding of actual consumer

confusion was not clearly erroneous, and its conclusion that this factor favors Vans

was legally correct.


      The district court’s finding that the Wavy Baby sneakers are lower quality

shoes is not clearly erroneous, though we do not embrace the district court’s legal

conclusion that this factor favors Vans. In comparing the quality of MSCHF’s

product to that of the Old Skool sneaker, the district court found “particular

deficiencies” in the Wavy Baby sneakers that demonstrated a lower quality shoe.

Vans, 

. The Wavy Baby’s stylized bottom may create

instability where a skate shoe should be stable—a fact that is conceded by MSCHF.

See 

 (“[I]f you put them on and walked around, you’ll see this is not the

greatest foot-feeling shoe.”); see also Jt. App’x at 286 (MSCHF acknowledging itself

that “[i]t is difficult to walk in Wavy Baby for long distances . . . and they cannot

safely be worn to walk down stairs”); Jt. App’x at 362 (“[T]hey cannot be worn as

an actual sneaker.”); Jt. App’x at 501–02 (“We took a functional, iconic skate shoe

and made it a non-functional—or at least ‘non-functional’ relative to the ways

sneakers traditionally function.”). The district court’s finding that the Wavy Baby

is a lower quality skate shoe is not clearly erroneous.




                                         31
       We are skeptical, however, that the Wavy Baby’s inferior quality as a skate

shoe weighs in favor of Vans. The Wavy Baby’s primary purpose is to convey a

message or fashion statement rather than to serve as a functional shoe. It seems

unlikely that consumers would expect the Wavy Baby—a shoe with an obviously

uneven sole—to be as comfortable or functional as the Old Skool. But even if the

district court erred by weighing this factor in Vans’ favor, this one factor does not

change our conclusion that Vans is likely to prevail on the merits of its trademark

infringement claim. Accord Nabisco, Inc. v. Warner-Lambert Co., 

 (2d

Cir. 2000) (“The evaluation of the Polaroid factors is not a mechanical process where

the party with the greatest number of factors weighing in its favor wins. Rather,

a court should focus on the ultimate question of whether consumers are likely to

be confused.” (citation omitted)).


       Finally, the district court was correct to conclude that sophistication of the

buyers also favored Vans. MSCHF engaged in broad advertising to the “general

public,” and customers of sneakers are not professional buyers. 7


       The fact that the Wavy Baby was conceived as a parody does not change

that assessment. The Wavy Baby is a parody, just not one entitled to protection


7The district court made no finding with respect to MSCHF’s good faith and we do not rely on
this factor in our own Polaroid analysis.


                                            32
under Rogers. As noted above, to succeed, a parody must create contrasts with the

subject of the parody so that the “message of ridicule or pointed humor comes

clear.” Jack Daniel’s, 599 U.S. at 161. If that is done, “a parody is not often likely to

create confusion.” Id. But if a parodic use of protected marks and trade dress

leaves confusion as to the source of a product, the parody has not “succeeded” for

purposes of the Lanham Act, and the infringement is unlawful.


       For these reasons, we conclude that the Wavy Baby does create a likelihood

of consumer confusion, and the district court correctly concluded that Vans is

likely to prevail on the merits. It did not exceed its discretion by enjoining

MSCHF’s marketing and sale of the Wavy Baby. 8



8 MSCHF’s opening brief also argues that the district court’s injunction was an unconstitutional
prior restraint on MSCHF’s expression. Generally, if a product is found to infringe, preliminary
injunctions under the Lanham Act are not considered prior restraints. See Dallas Cowboys
Cheerleaders, Inc. v. Pussycat Cinema, Ltd., 

 (2d Cir. 1979) (holding that an
injunction pursuant to the Lanham Act was not a prior restraint because trademark
infringement implicated property rights, not speech rights); see also Dr. Seuss Enterprises, L.P. v.
Penguin Books USA, Inc., 

 (9th Cir. 1997) (upholding a preliminary injunction even
for noncommercial speech); Deceptive Commercial Speech, 6 McCarthy on Trademarks and
Unfair Competition § 31:142 (5th ed.) (“[T]he prior restraint prohibition does not apply to most
trademark preliminary injunctions. . . .”). MSCHF’s argument that the preliminary injunction
was an unlawful prior restraint piggybacks on its argument that the district court’s assessment
of Vans’ likelihood of prevailing on the merits failed to properly account for First Amendment
concerns, and thus fails for the same reasons.




                                                33
III.   Escrow Order

       MSCHF argues that the district court exceeded its discretion in ordering it

to escrow all of its revenues from the Wavy Baby sales it had completed.

Specifically, the district court ordered MSCHF, for any purchase that could not be

reversed and/or cancelled, to escrow “any funds received from all orders taken to

date for the Prohibited Shoes so that, if Vans prevails in this action, [MSCHF] may

return those funds to customers who ordered [MSCHF’s] Prohibited Shoes under

the mistaken belief that Vans was the source of the shoes or otherwise approved

or sponsored the shoes.” Vans, 

. MSCHF contends 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.


       We disagree. Under 

, Vans is entitled to MSCHF’s profits,

damages, and attorneys’ fees if it establishes trademark infringement under the

Lanham Act. In assessing profits, the plaintiff is required to prove the defendant’s

sales only; the defendant must prove all elements of cost or deduction claimed.

See 

(a). And, this Court has held that “district courts have the

authority to issue a prejudgment asset restraint injunction in favor of plaintiffs




                                        34
seeking an accounting against allegedly infringing defendants in Lanham Act

cases.” Gucci Am., Inc. v. Weixing Li, 

 (2d Cir. 2014).


      In this case, Vans has sought an accounting. Moreover, MSCHF has not

established its costs of production.      Under these circumstances, we cannot

conclude that the district court exceeded its discretion when it ordered MSCHF to

essentially freeze its revenues from the Wavy Baby. We express no opinion as to

the propriety of the ultimate relief the district court suggested in its order—

refunds to consumers—and uphold the district court’s order without prejudice to

MSCHF’s ability to renew its arguments before the district court on remand.


IV.   Bond Determination

      MSCHF’s final claim is that the district court erred under Fed. R. Civ. P. 65(c)

by failing to either require Vans to post security or to find, expressly, that no

security was required. Vans argues that MSCHF waived this challenge by failing

to seek a bond determination before the district court.


      Under Rule 65(c), before issuing a preliminary injunction, the court must

order the moving party to provide a security (“post bond”) in an amount the court

determines would cover damages sustained in the event a party has been

wrongfully enjoined. See Fed. R. Civ. P. 65(c) (“The court may issue a preliminary

injunction or a temporary restraining order only if the movant gives security in an
                                          35
amount that the court considers proper to pay the costs and damages sustained by

any party found to have been wrongfully enjoined or restrained.”).


      But where the party opposing an injunction does not request security, the

district court does not err in failing to order it. See Clarkson Co., Ltd. v. Shaheen, 

 (2d Cir. 1976). In Clarkson we ruled that, “[b]ecause no request for a

bond was ever made in the district court, and because, under Fed. R. Civ. P. 65,

the amount of any bond to be given upon the issuance of a preliminary injunction

rests within the sound discretion of the trial court, . . . the district court may

dispense with the filing of a bond.” 

 (internal citations omitted).


      We reject MSCHF’s suggestion that our decision in Corning Inc. v. PicVue

Electronics., Ltd., 

 (2d Cir. 2004), overrules or limits our holding in

Clarkson. In Corning, we said, “While it might have been within the discretion of

the district court to decide that, under the circumstances, no security was required,

. . . the district court was required to make this determination before it entered the

preliminary injunction.” 

 (internal citation omitted). Nothing in Corning

suggests that its holding applies even if the enjoined party never requested security.

Accordingly, we conclude the district court did not err in failing to require security

from Vans. Nothing in our analysis precludes MSCHF from seeking security

pursuant to Fed. R. Civ. P. 65(c) in the district court.

                                           36
                                CONCLUSION

      For the reasons discussed above, we AFFIRM the district court’s grant of

the preliminary injunction and the temporary restraining order.




                                       37