OMG Verdict Flip Exemplifies High Court’s Rogers Test Limitation

OMG Girlz’ recent $71 million win in a jury trial about dolls designed to look like the pop group’s members reveals how a 2023 Supreme Court ruling narrowing First Amendment protections for third-party trademark use is flipping the fortunes of rightsholders.

The Sept. 23 verdict provided a unique insight into the reworkings of trademark and trade dress litigation post-Jack Daniel’s Properties Inc. v. VIP Products LLC. That’s because the high court’s ruling that said using someone else’s trademark as your own source identifier isn’t constitutionally protected speech dropped a month after a different jury had cleared MGA Entertainment Inc. of OMG Girlz’ infringement claims. The Jack Daniel’s decision quickly spurred a new trial resulting in an opposite outcome.

The jury in the earlier trial was told to apply the Rogers test, which balances the unauthorized use of a trademark in an artistic work against free speech concerns. In the new trial that didn’t invoke the Rogers test, the jury went the other way, finding that MGA’s L.O.L Suprise! OMG dolls did in fact infringe OMG Girlz’ intellectual property rights.

While it might not have been the only factor in the new jury’s diverging finding, removing the Rogers test was a key difference between the two trials, said Jordan Feirman, counsel at Skadden, Arps, Slate, Meagher & Flom LLP.

“The OMG dolls case is a clear example of how the Supreme Court’s verdict led to a much more successful outcome for a plaintiff that otherwise might have been barred by First Amendment doctrine from getting relief,” Feirman said.

But the verdict also spotlights the questions that remain in the wake of last year’s Jack Daniel’s ruling, which offered little guidance as to when using another’s mark as a trademark isn’t considered potentially protected expression subject to the Rogers test.

Whether a defendant is making a trademark based on the mark at issue isn’t addressed in other factors of the traditional “likelihood of confusion” test applied in infringement suits, said Christine Farley, IP law professor at American University Washington College of Law.

Without the Rogers test, Farley said, “where does the, ‘Hey, I’ve got a First Amendment right to use these design elements that you say you own'—where does that fit in?”

“The reason to pay attention to this case is that it shows that there’s no longer a good vehicle for a First Amendment defense in a trade dress infringement case,” she added.

Murky Waters

MGA sued OMG Girlz in 2020 in the US District Court for the Central District of California after the group warned the toymaker it was infringing their rights. MGA alleged its dolls were never meant to be associated with the pop group and asked for a declaratory judgment that it hadn’t infringed any IP rights.

OMG Girlz, along with Xscape singer Tameka “Tiny” Harris and rapper Clifford “T.I.” Harris—band member Zonnique Pullins’ mother and stepfather— responded with counterclaims, saying MGA was infringing and commercially exploiting the distinctive style and visual appearance, known as trade dress, associated with the OMG Girlz name, brand, image, and style.

As that dispute proceeded through multiple trials, a separate case in the Supreme Court involving a dog chew toy shaped like a Jack Daniel’s whiskey bottle and labeled “Bad Spaniels” was also playing out. The justices found the Rogers test can’t be applied when a trademark is used without authorization as the source identifier for another producer—that is, using another’s existing trademark as a trademark.

OMG Girlz cited the June decision in its request for a new trial, insisting the Rogers test no longer applied to the case. Judge James Selna agreed, saying the main task of the jury had been to figure out if consumers would be misled about the origin of the dolls, and that there was “no doubt that under Jack Daniel’s, the Rogers test instruction should not have been given.”

Ultimately, the September jury said MGA’s dolls’ references to OMG Girlz weren’t protected by the First Amendment.

“I don’t think that the Supreme Court made this inquiry—what is a ‘use as source identification'—very clear, except for a few obvious applications, so it doesn’t surprise me that lower courts now need to struggle with those issues,” said Guy Rub, IP law professor at Temple University Beasley School of Law.

But the question of when a trade dress is source-identifying has always been “thorny,” said Matthew Sipe, an assistant professor teaching trademark law at the University of Baltimore.

The Supreme Court in the Jack Daniel’s decision “predicated application of the Rogers test on a concept that is not fully fleshed out,” Sipe said.

Farley questioned the need for a retrial at all after the high court’s ruling and said she expects MGA to appeal the verdict. While distinctive features like the hair color and unique wardrobe elements are visible in MGA’s fashion dolls, she said, “it’s not source-identifying for those dolls. The use of purple hair and tutus is not telling you this is brand information.”

Shifting Argument

Although the Supreme Court clipped the applicability of the Rogers test in the Jack Daniel’s decision, it didn’t completely dismantle it, First Amendment and IP attorney Lincoln Bandlow said.

“There’s some different advice I’m giving clients based on the Bad Spaniels case, but I don’t think anybody’s running around saying Rogers is dead in a very traditional Rogers-type setting,” Bandlow said.

Although the court found the design and look of the L.O.L Surprise! OMG dolls served a source-identifying function, instances of the artistic use of trademarks, such as featuring a branded car in a film or video game, hasn’t lost typical free-speech protections, he added.

“We could start to see more argument about what is a source identifier, and what do you do with these sort of mixed-purpose uses,” said Lauren Schweitzer, an IP litigation partner at Kirkland & Ellis LLP.

“It might be that it’s not that we are seeing a big shift away from Rogers, but a shift in where the argument is going on Rogers,” she said.

The case is: MGA Entertainment Inc. v. Clifford T.I. Harris et al, C.D. Cal., 2:20-cv-11548.