Mattel, Inc. v. MCA Records, Inc.

Citations: 296 F.3d 894; 2002 Daily Journal DAR 8297; 63 U.S.P.Q. 2d (BNA) 1715; 2002 Cal. Daily Op. Serv. 6617; 2002 U.S. App. LEXIS 14821; 2002 WL 1628504Docket: 98-56453, 98-56577

Court: Court of Appeals for the Ninth Circuit; July 24, 2002; Federal Appellate Court

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Mattel, Inc. filed a lawsuit against MCA Records, Inc. and associated entities over the song "Barbie Girl" by the Danish band Aqua, claiming trademark infringement and dilution under the Lanham Act. The song featured a member impersonating Barbie, which led to significant commercial success and reached Top 40 music charts, much to Mattel's dismay. MCA challenged the district court's jurisdiction regarding the foreign defendants and counterclaimed for defamation based on statements made by Mattel during the lawsuit. The district court ruled in favor of Mattel, asserting jurisdiction over the foreign defendants and granting summary judgment on Mattel's trademark claims while also siding with Mattel on MCA's defamation claim. The case was heard by the Ninth Circuit, with judges including Kozinski, Nelson, and Brunetti.

Mattel is appealing a district court's decision that the song "Barbie Girl" constitutes a parody of Barbie and qualifies as nominative fair use, asserting that MCA's use of the term "Barbie" does not confuse consumers regarding Mattel's affiliation nor dilutes the Barbie trademark. Additionally, the court ruled that Mattel cannot pursue an unfair competition claim under the Paris Convention. MCA has cross-appealed regarding the summary judgment on its defamation claim and the court's jurisdictional rulings.

The foreign defendants, affiliated with Universal Music Group, engaged in cross-licensing agreements and coordinated the distribution of the "Barbie Girl" song in the U.S., specifically targeting California, where Mattel is headquartered. The court found that Mattel's trademark claims were directly linked to the defendants' actions aimed at California, justifying the assertion of specific personal jurisdiction over them.

Furthermore, the court ruled that the global sales of the "Aquarium" album sufficiently impacted American foreign commerce, resulting in monetary injury to Mattel, which is more closely related to U.S. interests than to those of other nations. As such, the district court appropriately exercised extraterritorial jurisdiction under the Lanham Act.

The excerpt also emphasizes that trademarks serve to identify the source of goods or services and prevent consumer deception. While trademarks are intended to avoid marketplace confusion, some have transcended their original purpose and become part of public discourse, thereby acquiring expressive value that may extend beyond trademark law.

The likelihood-of-confusion test balances trademark owners' rights with public expressive interests, particularly when a mark has taken on broader meanings beyond identifying a source, such as "aspirin" or "Rolls Royce." Trademark rights do not grant an owner the authority to suppress unauthorized uses of their mark when such uses are part of a communicative message rather than a source identifier. In the case of the song "Barbie Girl," the title and lyrics reference Barbie and Ken, conveying a message about the song's content rather than identifying the producer. The song critiques the values associated with Barbie, emphasizing parody and commentary. This situation contrasts with cases where trademarks are used solely for attention without critical commentary, such as in the Dr. Seuss example, where the use did not provide substantive critique. Parodic works targeting the subject of a trademark receive more First Amendment protection than those that merely use the trademark to attract attention without commentary.

The Second Circuit's interpretation of the Lanham Act emphasizes that it applies to artistic works only when the public interest in preventing consumer confusion outweighs the interest in free expression. This principle was established in *Rogers v. Grimaldi*, where actress Ginger Rogers challenged the film *Ginger and Fred*, arguing that its title falsely implied her association with the movie. Although she had a valid point regarding the names, the court distinguished between artistic titles and commercial product names, asserting that titles are meant to promote the work rather than identify its creator.

The court noted that consumers do not expect artistic titles to indicate the origin of the work in the same way they expect product names to do so. It concluded that a title would only violate the Lanham Act if it had no artistic relevance to the work or if it explicitly misled consumers regarding the source or content. Following this analysis, the court determined that MCA's use of "Barbie" in a song title was not trademark infringement because the title was relevant to the song and did not misleadingly suggest Mattel's involvement. 

Additionally, the court indicated that it did not need to address whether MCA's use constituted nominative fair use because the first prong of the Rogers test was satisfied. Mattel also claimed that MCA's song diluted the Barbie mark under the Federal Trademark Dilution Act, arguing that it diminished the mark's distinctiveness and tarnished it due to the song's inappropriateness for young girls.

"Dilution" is defined as the reduction of a trademark's value when it is used to identify various products, which can weaken the "commercial magnetism" of the mark. Examples include inappropriate associations with distinct brands like Tylenol being linked to snowboards or Harry Potter to dry cleaners, leading to a loss of uniqueness. Unlike trademark infringement, dilution occurs even when consumers are not confused about the product's source, as the mark begins to represent multiple products rather than a single brand. The dilution injury arises from the appropriation of the substantial investment made in the trademark.

Originally a state law concept, dilution gained national recognition with the 1996 amendment to the Lanham Act through the Federal Trademark Dilution Act (FTDA), which protects owners of famous marks from commercial uses that dilute their distinctiveness after the mark has gained fame. Dilutive uses are generally prohibited unless they fit into one of three statutory exemptions: comparative advertising, news reporting and commentary, or noncommercial use.

The Barbie mark qualifies as a famous and distinctive mark under the FTDA, and its commercial success confirms this status. MCA's use of the Barbie mark in the Barbie Girl song constitutes "commercial use in commerce," as it involves selling products that bear the mark without authorization. The popularity of the song has led to a dilution of the Barbie mark, as it now evokes both the doll and the song, thereby blurring its distinctiveness. The analysis then shifts to the applicability of the FTDA's exemptions, determining that only the noncommercial use exemption needs to be examined.

The "noncommercial use" exemption presents a conflict with the requirement that junior use must be a "commercial use in commerce" to be considered dilutive. If both terms were interpreted identically, it would invalidate one of the three statutory exemptions, as a dilutive use could not simultaneously be noncommercial. Such a narrow interpretation would raise constitutional issues by limiting First Amendment protections for dilutive speech, except in cases of comparative advertising and news reporting. This poses significant problems since the primary remedy for dilution is an injunction, and trademark law faces similar First Amendment tensions, particularly when marks serve an expressive function.

Trademark law offers protection only against uses likely to cause consumer confusion, whereas dilution law aims to prevent association with unrelated goods or services, leading to broader injunctions that can affect various industries. Additionally, trademark injunctions are grounded in consumer protection to prevent fraud, aligning with First Amendment principles that do not shield commercial fraud. Conversely, dilution does not necessitate proof of consumer confusion, making its injunctions less anchored in First Amendment considerations and focused solely on protecting the mark's distinctiveness, which is a less compelling interest.

Legislative history of the FTDA indicates that the "noncommercial use" exemption should refer to speech that is fully protected under the Constitution, such as parodies. When a statute's interpretation leads to absurd or potentially unconstitutional outcomes, it is appropriate to consult legislative history for clarity.

The legislative history of the Federal Trademark Dilution Act (FTDA) indicates that its sponsors were cognizant of potential conflicts with the First Amendment, particularly regarding injunctions against protected speech. Both House and Senate sponsors explicitly stated that the law would not hinder noncommercial expression, including parody and satire. The House Judiciary Committee's report affirmed that the FTDA would not threaten noncommercial expression as defined by courts. The bill's section-by-section analysis suggested reliance on a "noncommercial use" exemption to mitigate First Amendment concerns, aligning with existing case law that protects artistic and expressive speech involving famous marks.

The determination of whether "Barbie Girl" falls under this exemption involves evaluating its status as commercial speech using established First Amendment jurisprudence. Commercial speech is primarily defined as speech that proposes a commercial transaction. If speech exceeds this scope, it receives full First Amendment protection. An example provided is the case of Hoffman v. Capital Cities/ABC, where a magazine article featuring digitally altered images of actors was deemed to serve a commercial purpose but was still protected under the First Amendment due to its expressive content, humor, and editorial commentary.

Barbie Girl is deemed not purely commercial speech, thus qualifying for full protection under the FTDA due to its satirical commentary on the Barbie image and cultural values. MCA's use of the Barbie mark in the song, including the title, falls under the noncommercial use exemption. Mattel contends that the district court wrongly granted summary judgment for foreign defendants regarding its unfair competition claim based on the Paris Convention, specifically Article 10bis, which mandates effective protection against unfair competition for nationals of Union countries. Mattel argues that Article 10bis establishes a federal cause of action for international unfair competition disputes and that Section 44 of the Lanham Act extends these protections to U.S. nationals. The case Toho Co. v. Sears illustrates that while Section 44(b) provides benefits to foreign nationals under trademark treaties, it does not create a general federal law of unfair competition. Instead, protections under subsection 44(h) are aligned with the specific treaty provisions, allowing foreign nationals equal treatment in unfair competition claims. Subsection 44(i) similarly extends these benefits to U.S. citizens but does not create additional federal causes of action beyond those established by existing treaties.

The Paris Convention does not establish substantive law regarding unfair competition among signatory countries but mandates national treatment, ensuring foreign nationals receive the same legal protections as domestic citizens. Consequently, a foreign national, such as Mattel, is entitled to the same effective protection against unfair competition as an American. Therefore, Mattel can pursue claims under the Lanham Act for trademark infringement or false designation of origin, and state law claims for unfair competition, but it lacks a federal cause of action for unfair competition itself. The treaty's provision for national treatment does not extend greater protections against foreign nationals than against U.S. nationals. 

Following the initiation of legal action, tensions escalated between Mattel and MCA, with public statements exchanged. Mattel criticized MCA's characterization of the song "Barbie Girl" as a social commentary, likening it to a robbery. In response, MCA filed a defamation counterclaim based on Mattel's statements. However, the language used by Mattel is deemed nonactionable rhetorical hyperbole, commonly used in disputes over intellectual property. The court advises both parties to temper their remarks. The judgment is affirmed.

The excerpt includes lyrics from the song "Barbie Girl" by Aqua, featuring a playful exchange between characters Barbie and Ken, emphasizing themes of fantasy, playfulness, and companionship. The song's chorus highlights Barbie's idealized lifestyle and the notion of being a "dolly" within a glamorous, plastic world. 

The legal notes discuss the likelihood-of-confusion test relevant to Mattel's claims of unfair competition and the history of anti-dilution statutes, noting that the first such law was enacted in Massachusetts in 1947. It mentions the pending Supreme Court decision on whether a famous mark owner must demonstrate economic injury for dilution claims. The text confirms that evidence of blurring was sufficient for the court's ruling, thus sidestepping the issue of whether the song tarnished the Barbie mark. Additionally, it outlines the provisions of the Federal Trademark Dilution Act (FTDA), indicating that damages require proof of willful intent to dilute. The interpretation of the noncommercial use exemption is discussed, emphasizing potential First Amendment conflicts in cases involving commercial speech, although this particular issue is not addressed in the current context.