On May 19, 2023, the Court of Appeals for the Second Circuit ruled in favor of defendants in a trademark matter involving unauthorized use of models’ photographs. Souza v Exotic Island Enterprises, Inc., Dkt. No. 21-2149-cv (2d Cir. May 19, 2023) (2023 WL 3556053).
Background
According to the opinion, a “gentlemen’s club” engaged a third party promotions company to create some promotional materials for the club. The promotions company used some photos posted by professional models in order to promote the club using social media posts, for the period 2014 to 2018, without obtaining permission from any of the models. When the models discovered this use, they filed a lawsuit in federal court in late 2018, claiming, among other things, violations of federal trademark law (false endorsement and false advertising) as well violations of their rights of publicity under New York law. The defendants promptly removed the photos when the models complained.
The trial court ruled for the defendants, and the Second Circuit affirmed.
The Ruling
With respect to the false endorsement claim, the Second Circuit began with the eight-factor test used in these types of claims:
(1) strength of the trademark; (2) similarity of the marks; (3) proximity of the products and their competitiveness with one another; (4) evidence that the senior user may bridge the gap by developing a product for sale in the market of the alleged infringer’s product; (5) evidence of actual consumer confusion; (6) evidence that the imitative mark was adopted in bad faith; (7) respective quality of the products; and (8) sophistication of consumers in the relevant market.
The trial court, however, focused on only three of the factors: (1) strength of mark; (5) evidence of actual consumer confusion; and (6) evidence that the imitative mark was adopted in bad faith. The Second Circuit stated that it expected trial courts in future cases to address all eight factors but in rare cases—including this one—analyzing fewer than all eight factors would be acceptable.
With respect to factor (1), the Second Circuit pointed out that “[i]n a false endorsement case like this one, the ‘mark’ in question is the identity of the purported endorser herself.” The court found that the models may have claims under other laws, but using the models’ images “creates no risk of consumer confusion as conceived under the Lanham Act.” This factor favored the defendants.
The court also found that factor (5) favored the defendants because the models produced no evidence of actual consumer confusion. Finally, with respect to factor (6), the court ruled for defendants because there was no evidence that the club asked the promotion company to provide photos of any specific person(s), but instead simply requested photos to complement the advertised event or webpage. This factor also favored the defendants.
With respect to the false advertising claim, the court began by reciting the four elements a plaintiff needs to prove: “(1) either literally or impliedly false, (2) material, (3) placed in interstate commerce, and (4) the cause of actual or likely injury to the plaintiff.” Here, however, the only issue on appeal was factor (4). In this case, the models could not show that they had suffered any “economic or reputational injury flowing directly from the deception wrought by the defendant’s advertising.” The models were not in competition with the club, nor could they show anyone refused to hire any of them as a result of this use of their photos.
Finally, with respect to the New York right of publicity claims, the court pointed out that New York has a one-year statute of limitations, based on the date of the first publication. All but two of the posts were published more than a year prior to the models filing their complaint, so the vast majority of the claims were correctly dismissed as untimely.
The Second Circuit then affirmed the district court’s refusal to exercise supplemental jurisdiction over the models’ non-time-barred right of publicity claims. The court noted that it was somewhat unusual for the district court, having ruled against the plaintiffs’ federal claim, to have exercised supplemental jurisdiction over some claims only to find them time-barred but not others that were timely. But the court found that plaintiffs had waived any such challenge.
Note
Had the models owned the copyrights in the photos at issue, this case may have had a different result.