Schiff Hardin LLP
posted on: Saturday, March 8, 2014
Civil Rights / Communications, Media & Internet / Constitutional Law / Intellectual Property / Litigation / Trial Practice
7th Circuit (incl. bankruptcy)
A recent decision by the United States Court of Appeals for the Seventh Circuit in Jordan v. Jewel Food Stores, Inc., No. 12-1992 (Feb. 19, 2014), ruled in favor of Michael Jordan by finding that Jewel's ad, "congratulating" Michael Jordan on his induction into the Basketball Hall of Fame, was in fact commercial speech and not entitled to heightened protection under the First Amendment.
In 2009, in commemoration of Michael Jordan's induction into the Basketball Hall of Fame, Time, Inc. published a special issue of Sports Illustrated Presents, devoted to the career of Michael Jordan. Time offered advertising space to Jewel in exchange for its agreement to display and sell the magazine in its chain of Jewel-Osco grocery stores. Jewel's full page ad appeared on the inside back cover of the issue and was styled as a congratulatory message to Jordan. But the ad also prominently featured Jewel's trademarks, including its logo and marketing slogan, and even embedded its slogan, "Good things are just around the corner," within the congratulatory message.After publication, Jordan filed suit against Jewel alleging federal Lanham Act violations as well as violations of the Illinois Right of Publicity Act, the Illinois deceptive practices statute, and common-law unfair competition. Jewel claimed it could not be liable for misappropriating Jordan's identity because its ad was non-commercial speech entitled to First Amendment protection.
Although commercial speech is protected under the First Amendment, it can be regulated to a greater degree than non-commercial speech. Supreme Court precedent provides general "guideposts" regarding what constitutes commercial speech, beginning with the most basic type of commercial speech, speech that proposes a commercial transaction. Courts also consider "whether: 1) the speech is an advertisement; 2) the speech refers to a specific product; and 3) the speaker has an economic motivation for the speech." United States v. Benson, 561 F.3d 718, 725 (7th Cir. 2009).
The district court granted summary judgment in favor of Jewel, holding that Jewel's congratulatory ad was non-commercial speech, protected by the First Amendment. The court reasoned that Jewel's use of its logo and marketing slogan in its ad did not constitute commercial speech because Jewel's ad did not identify or offer to sell any products. Jordan's legal team at Schiff Hardin appealed the district court's decision and was successful in obtaining a reversal from the Seventh Circuit.
Emphasizing the importance of both content and context, the Seventh Circuit held that Jewel's ad, which it described as a form of "image advertising," was commercial because it was aimed at promoting the Jewel-Osco brand. Context was deemed especially important because modern commercial advertising "occupies diverse media, draws on a limitless array of imaginative techniques" and "frequently relies on subtle cues." The ad's use of Jewel's logo and marketing slogan, figuring prominently in stylized form in the middle of the page, sent the message that the goal of the ad was not simply to congratulate Michael Jordan, but to use Jordan's reputation and valuable identity to enhance the Jewel-Osco brand and promote brand loyalty among potential customers.
The Seventh Circuit explained that commercial speech is not limited to speech that "does no more than propose a commercial transaction" as Jewel had argued. Instead, it confirmed that the "commercial-speech category is not limited to speech that directly or indirectly proposes a commercial transaction."
Thus, the Seventh Circuit rejected the idea that the ad was only commercial if it promoted a particular product. "To say that the ad is non-commercial because it lacks an outright sales pitch is to artificially distinguish between product advertising and image advertising." The Seventh Circuit reasoned that classifying "image advertising" "as constitutionally immune non-commercial speech would permit advertisers to misappropriate the identity of athletes and other celebrities with impunity."
The Seventh Circuit concluded that the ad could only be classified as commercial speech because of its obvious underlying goal, to capitalize on Michael Jordan's value for Jewel's commercial benefit. The Seventh Circuit noted that, as a famous athlete, Jordan "understandably guards the use of his identity very closely," and as a "highly sought after celebrity endorser ... continues to reap the economic value of his reputation." It was clear that "Jewel had something to gain by conspicuously joining the chorus of congratulations on the much-anticipated occasion of Jordan's induction."
Finally, the Seventh Circuit also addressed the "inextricably intertwined" doctrine. This doctrine holds that when commercial and non-commercial speech are "inextricably intertwined," the speech will be considered as a whole. If the speech overall is characterized as non-commercial, both the commercial and non-commercial aspects are protected by the First Amendment. The Seventh Circuit emphasized that this doctrine only applies where it is "legally or practically impossible for the speaker to separate" the commercial and non-commercial elements. The fact that both elements are combined into a whole is insufficient. Instead, the combination of commercial and non-commercial messages must be compelled by "law of man or nature." Jewel's ad was an example of a voluntary combination of elements, and the Seventh Circuit held that nothing compelled Jewel to combine commercial and non-commercial speech in the same advertisement, certainly not any laws of nature or man.
This decision is an important victory for celebrities, famous athletes, and public figures who want to protect their identities from misappropriation and choose what brands they want to be associated with. The Seventh Circuit recognized that a "contrary holding would have sweeping and troublesome implications for athletes, actors, celebrities, and other trademark holders seeking to protect the use of their identities or marks." An affirmation of the district court's holding would have paved the way for advertisers to easily use celebrity identities and brands for their own commercial benefit by designing ads for brand promotion and avoiding reference to a specific product. This would have substantially diminished the level of control a celebrity or public figure has over his or her own image and branding under the law.