E.S.S. Entertainment 2000, Inc. v. Rock Star Videos, Inc.
United States Court of Appeals for the Ninth Circuit
November 5, 2008; Cite as 06-56237

First Amendment Defense in Infringement Case

In this intellectual property case, the Court was made to decide whether or not a producer of a video game of the “Grand Theft Auto” series has a defense under the First Amendment against a trademark infringement claim.

It appears that Rockstar Games, Inc. is a wholly-owned subsidiary of Take-Two Interactive Software, Inc. which manufactures and distributes the Grand Theft Auto series video games, including the above-mentioned games. The series is known for an irreverent and sometimes crass brand of humor, gratuitous violence, sex and overall seediness.

The game allows a player to experience a version of West Coast “gangster” culture. It takes place in the virtual cities of “Los Santos”, “San Fierro”, and “Las Venturas” – Los Angeles, San Francisco and Las Vegas, respectively.

In one of its depiction of Los Angeles, it mimics East Los Angeles, “East Los Santos” in the game version, where it contains variations on the business and architecture of the real thing, including a virtual, cartoon-style strip club known as the “Pig Pen”.

ESS Entertainment here is the operator of strip club known as Play Pen which features females dancing nude. On its complaint, ESS claims that Rockstar depiction of an East Los Santos strip club called Pig Pen infringe its trademark and the trade dress associated with Play Pen.

The Play Pen’s logo consists of the words “the Play Pen” and the phrase “Totally Nude”, with a silhouette of a nude female dancer inside the stem of the first “P”.

Rockstar’s artists took some inspiration from the photographs of the Play Pen. But they also used photographs of other East Los Angeles locations to design other aspects of the Pig Pen. The Pig Pen visibly lacks certain features of Play Pen such as a stone façade, a valet stand, etc.

ESS asserted four claims against Rockstar, namely:

1. trade dress infringement and unfair competition under the Lanham Act
2. trademark infringement under the California Business and Professions Code
3. unfair competition under the California Business and Professions Code
4. unfair competition under California common law

The district court rejected Rockstar’s nominative fair use defense, but it granted summary judgment based on the First Amendment defense.

In affirming the decision of the district court, the Court of Appeals held that “unlike a traditional fair use scenario, [nominative fair use occurs when] the defendant . . . us[es] the trademarked term to describe not its own product, but the plaintiff’s.” Playboy Enters., Inc. v. Welles, 279 F.3d 796, 801 (9th Cir. 2002).

The doctrine protects those who deliberately use another’s trademark or trade dress “for the ‘purposes of comparison, criticism[,] or point of reference.’ ” Walking Mountain, 353 F.3d at 809 (alteration omitted) (quoting New Kids on the Block v. News Am. Publ’g, Inc., 971 F.2d 302, 306 (9th Cir. 1992)). In this case, however, Rockstar’s use of “Pig Pen” is not “identical to the plaintiff’s [Play Pen] mark.”

As to the issue of the First Amendment, the Court adopted the Second Circuit’s approach from Rogers v. Grimaldi, which “requires courts to construe the Lanham Act ‘to apply to artistic works only where the public interest in avoiding consumer confusion outweighs the public interest in free expression.’ ”

The Court ultimately concluded that Rockstar’s modification of ESS’s trademark is not explicitly misleading and is thus protected by the First Amendment. Since the First Amendment defense applies equally to ESS’s state law claims as to its Lanham Act claim, the Court ruled that the district court properly dismissed the entire case on Rockstar’s motion for summary judgment.