In a recent drop of the Brooklyn art-collective MSCHF Product Studio Inc, the group founded a website where it sold racing-style shirts with registered trade marks of eight multinational corporations: Coca-Cola, Disney, Amazon, Tesla, Subway, Microsoft, Walmart and Starbucks. Sonja Hyvärinen summarises.
The group was not only purposefully selling the illegal merchandise - it made a race-game out of it. By choosing a shirt bearing one of the corporation’s logos, the buyers were guessing which corporation would be the first one to send a cease & desist (C&D) letter against MSCHF. Furthermore, the game had a price. The winners who guessed the corporation correctly were promised a hat with MSCHF’s logo on it, designed in the style of the car tire manufacturer Pirelli’s registered logo. Ultimately, the shirts were sold out quickly and Subway turned out to be the first one to send a C&D.
The “C&D Grand Prix” drop is one of the many spectacles of MSCHF that has grabbed the attention of the public. In 2021, the group got into the headlines by collaborating with rapper Lil Nas X to sell the “Satan shoes”; a pair of aftermarket Nike Air Max '97s, which were claimed to contain a drop of human blood. The stunt led Nike to sue MSCHF for, among other grounds, trade mark infringement, though the case was quickly settled. This case was well-commented on IP Watchdog.
With the C&D Grand Prix, MSCHF seems eager to provoke discussion on the power of such letters in the hands of multinational companies. The group has stated that it specifically chose the mentioned corporations because of their tendency to actively protect their intellectual property rights. As the group had already received numerous C&D letters in the past, they decided to make it into a race-game, and in doing so highlighted the tension between intellectual property rights, free speech and artistic expression.
This case is largely governed by the laws of the US, where freedom of speech in the First Amendment can be utilised as a defence to trade mark infringement. In this context, it is interesting to examine how the C&D Grand Prix would be assessed under the EU trade mark law.
In the European Union, infringement of a registered trade mark is generally based on:
- double identity of the marks and the goods/services
- likelihood of confusion with a registered trade mark and/or
- use which takes unfair advantage of, or is detrimental to, the distinctive character or the repute of a registered trade mark with a reputation.
With regards to the racing-shirts, there are grounds to argue that MSCHF’s use of the mentioned corporations’ trade marks does fall within double identity. Firstly, the signs used by MSCHF are identical to the registered signs of the mentioned corporations, as they are presented as unaltered on the racing-shirts. Secondly, most of the companies (if not presumably all of them) have registered their trade marks for clothing, and precisely for shirts, as it is common for multinational corporations, like Coca-Cola or Disney, to sell promotional clothing items under their registered trade mark in addition to using the mark for their ‘core’ business. To the extent that the infringed corporations would not have registered identical or similar products to racing-shirts, they may still claim infringement based on their reputations in their house brands. This is a powerful tool for multinational companies, as they can argue that the conduct of MSCHF takes unfair advantage of or is detrimental to the acquired reputation of their trade marks.
Although MSCHF’s actions clearly point towards trade mark infringement, it is interesting to discuss the potential limits of trade mark protection. Unlike in EU copyright law, there is no explicit exception in favour of parodies or alike in EU trade mark law. Such an exception has been discussed in the EU, however, a suggestion to include an exception in favour of use for the purposes of parody, artistic expression, criticism or comment, has been rejected (European Parliament, Committee on Legal Affairs Report A7-0031/2014).
In the light of the current EU trade mark framework, the use of another corporation’s trade mark, i.e. for parody or artistic purposes, may be permissible if it happens outside of the course of trade, as the scope of trade mark protection only covers uses in the course of trade. When it comes to the case at hand, MSCHF has sold the racing-style shirts for a profit, and in the course of this practice, the winners who placed their bets on Subway got a free hat. This would be considered as a use in the course of trade, as the CJEU has defined the concept to include uses which ‘takes place in the context of commercial activity with a view to economic advantage and not as a private matter’ (C-206/01, Arsenal, para 40).
In addition, there is a possibility that certain use of a protected trade mark may be allowed with regards to the assessment of trade marks with reputation in art 9(2)(c) EUTMR, as prohibited use only relates to use ‘without due cause’. Some types of social commentaries, parodies or artistic expressions might be regarded as due cause here, when taking account to the statements in recital 21 EUTMR. In this recital, it is stated that use of a trade mark by third parties for the purpose of artistic expression should be considered as being fair as long as it is at the same time in accordance with honest practices in industrial and commercial matters. It is also stipulated, that the trade mark regulation shall be applied in a way that it ensures full respect for fundamental rights and freedoms, in particular freedom of expression.
In the context of EU trade mark law, MSCHF would have a hard time arguing that its use of third party registered trade marks is in accordance with honest practices, as the group is knowingly selling infringing merchandise and actively inviting legal action. Even though the group has a more fundamental aim to criticise or provoke discussion of the legal power of the corporations in question, it would not be in accordance with the aims of trade mark protection if the EU trade mark framework would allow such an exploitation of protected trade marks. Despite the success in effectively grabbing the attention of the public, the acts of MSCHF would almost certainly be considered as trade mark infringement in the EU.
