Waving the Checkered Flag: Ninth Circuit Affirms Dismissal of Trademark Claims Arising from PlayStation Racing Games

The U.S. Court of Appeals for the Ninth Circuit this week summarily affirmed a dismissal, from two years ago, of trademark claims brought by flooring company VIRAG, S.R.L. (“Virag”) against Sony Computer Entertainment America, LLC (“Sony”).  In a three-page unpublished opinion, the appeals court held that Sony’s use of the “VIRAG” trademark as set dressing in its Gran Turismo 5 and 6 video games was protected by the First Amendment and immune from liability under federal trademark law.  The ruling’s brevity, however, should not detract from its significance.

In 2004, Virag, a global commercial flooring distributor, became a sponsor of the Rally of Monza, a Formula One auto race held in Monza, Italy.  Starting in 2006, the plaintiff’s “VIRAG” mark was displayed on a bridge over the Monza track for each race.  Virag claims that its name and trademark has not only become affiliated with its products, but also the rally. 

In its games – created to realistically depict European-style auto racing – Sony placed the “VIRAG” mark on a virtual replica of the same bridge in the virtual Monza racetrack so that the track would appear as it does in real life.  Virag claimed that this use by Sony was an infringement of its trademark that lacked artistic relevance to the games, was likely to cause consumer confusion as to Virag’s sponsorship of the games, and that caused negative customer reactions.  Sony argued that its use of the “VIRAG” mark in its games was protected by the First Amendment; the district court agreed, as did the court of appeals.

Both courts confirmed that video games constitute First Amendment-protected expression, including sports competition games like those in the Gran Turismo series, despite Virag’s attempt to characterize the games as plotless and characterless simulations undeserving of Constitutional protection.  Going a step further, the Ninth Circuit explained that, while Virag failed to argue that the games constitute lesser-protected “commercial speech,” such an argument would nonetheless fail because “the games do not merely ‘propose a commercial transaction.’”

In light of the games’ status as expressive works, both courts agreed that the test set forth in the Second Circuit’s Rogers v. Grimaldi opinion, as adopted by the Ninth Circuit in Mattel, Inc. v. MCA Records, Inc., would apply.  That test serves to balance trademark and First Amendment rights in the context of expressive works when trademarks are used either in the titles or bodies of those works.  Specifically, the federal Lanham Act (which governs trademark infringement actions) will not apply to a defendant’s use of a trademark in an expressive work unless (1) the use of the mark “has no artistic relevance to the underlying work whatsoever” or (2) it has some relevance but the use of the mark “explicitly misleads as to the source or content of the work.”  The Ninth Circuit confirmed that this test is applicable even where a trademark has not gained “independent cultural significance” so as to be an integral part of the cultural vocabulary, and where a defendant’s use of the mark conveys some other message aside from the source of the trademark.  The test, the court confirmed, is a broad one.

Looking at the game itself, the district court had concluded that realism played a central role in the racing simulations expressed by the Gran Turismo games, and so the use of Virag’s real-life trademark in the real-life spot where it appears during the races bore “at least some” artistic relevance to the games.  The Ninth Circuit, in affirming, emphasized that the amount of artistic relevance must simply exceed zero; under such a bright-line rule, courts are not put in a position to determine exactly how artistically relevant the use of the mark is – a job not particularly suited to most jurists.  The Ninth Circuit also agreed with the district court that Sony’s use of the trademark satisfied the second prong of the Rogers test in that Virag failed to allege any “explicit indication, overt claim, or explicit misstatement” by Sony that would cause consumer confusion.  Indeed, the mere use of a trademark alone (as in the case of Sony) is insufficient to make such a use misleading as contemplated by Rogers, even if consumer confusion actually occurs.

The Ninth Circuit’s opinion in this case, brief as it is, serves at least two important functions.  First, the opinion confirmed that video games like Gran Turismo do not constitute commercial speech, and are therefore not subject to any lesser protection than more traditional forms of media (presumably as long as the game is not, itself, an advertisement for a product).  Second, and even more significantly, it simultaneously reaffirms the vitality of the Rogers test as applicable to modern forms of media like video games, while perhaps opening the door to courts applying the test to the most cutting-edge technological trends like virtual and augmented reality.  The Virag decision is a win for content creators (at least on the West Coast, where many are located anyway), but also may be considered instructive for trademark owners to accurately gauge the scope of their rights and choose their battles.