USCA Ninth Circuit, November 5, 2008

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The U.S. Court of Appeals for the Ninth Circuit held that Rockstar Games, Inc., a producer of the video game Grand Theft Auto: San Andreas (“San Andreas”), had a First Amendment defense against claims of federal and California state law trademark infringement by the owner of a strip club called the Play Pen.

The Grand Theft Auto video game series takes place in various cartoon-like cities modeled after real American urban areas. San Andreas includes the city “Los Santos,” based on Los Angeles. The video game artists took reference photographs of Los Angeles and changed the images to create a fictional city that “lampooned the seedy underbelly of Los Angeles and the people, businesses and places that comprise it.” East Los Santos includes a virtual, cartoon-style strip club known as the Pig Pen, loosely based on the Play Pen strip club, operated by E.S.S. Entertainment 2000, Inc. (“ESS”).

The court held that Rockstar did not have a defense under the nominative fair use doctrine, which protects those who deliberately use another’s trademark or trade dress for the purposes of comparison, criticism, or point of reference. The district court held and Ninth Circuit agreed that the doctrine was not applicable because Rockstar did not use the exact trademarked logo to describe ESS’s strip club. Rockstar’s use of Pig Pen was not identical to the Play Pen mark and its goal in designing the Pig Pen was not to comment on the Play Pen. However, the court held that Rockstar’s use of ESS’s trademark was protected by the First Amendment. An artistic work’s use of a trademark that otherwise would violate the Lanham Act is not actionable (1) unless the use of the mark has no artistic relevance to the underlying work whatsoever, or (2) if it has some artistic relevance, unless it explicitly misleads as to the source of the content of the work. This test has been extended to apply to the use of a trademark in the body of the work, as opposed to just in the title of the work.

The first prong requires that the level of relevance merely must be above zero. Here, creating a critical mass of the business and buildings, including the Play Pen, is relevant to Rockstar’s artistic goal to develop a cartoon-style parody of East Los Angeles. The second prong looks to whether the game would confuse its players into thinking the Play Pen is behind the Pig Pen or sponsors the video game. Since a reasonable consumer would not think a company that owns a strip club also produces a technologically sophisticated video game like San Andreas, the court concluded that Rockstar’s modification of ESS’s trademark is not explicitly misleading and is thus protected by the First Amendment.