AM General LLC v. Activision Blizzard, Inc.

1. Introduction

In AM General LLC (“AMG”) v. Activision Blizzard, Inc. (“Activision”) (17 Civ. 8644),[1] decided on March 31, 2020, AM General, the manufacturer of the Humvee military vehicle, filed a lawsuit against Blizzard, the publisher of the popular "Call of Duty" video game series. AMG alleged that Activision's use of the Humvee brand and likeness in several installments of the game without authorization constituted trademark infringement, false advertising, and unfair competition under the Lanham Act.[2] The Humvee vehicles were depicted in the games to enhance the military realism of the gameplay. Activision defended its use of the Humvee vehicles, asserting that it was protected by the First Amendment under the principle of artistic expression. They argued that the vehicles’ presence in the game was crucial to maintaining the game’s authentic portrayal of modern warfare, and thus, they should be shielded from liability.

2. Key Elements of Trademark Infringement in U.S. Law

The resolution of the AMG v. Activision case hinges on balancing[3] two key legal principles:

I- The protection of intellectual property rights under the Lanham Act.

II- The safeguarding of artistic freedom as provided by the First Amendment. This balance is assessed using the Rogers test, named after the Rogers v. Grimaldi case.[4]

In Rogers v. Grimaldi, the court determined that when it comes to conflicts between trademark rights and freedom of expression, trademarks should not take precedence if their use holds artistic relevance to the work, unless it causes consumer confusion. Essentially, if a trademark is used for creative purposes and does not suggest that the trademark owner is associated with the work, it does not violate the owner's rights. This determination is further guided by the application of the Polaroid factors.

2.1 Artistic Relevance to the Work

The first consideration in determining whether freedom of expression takes precedence over a trademark is the artistic relevance of the trademark's use. The New York court found that the inclusion of Humvee vehicles in Call of Duty clearly holds artistic significance. The court reasoned that in a game simulating modern military combat, incorporating real-world military vehicles enhances the sense of realism.

Relying on reasoning from similar cases, the court determined that the use of the AMG trademark satisfies the first criterion of the Rogers test, as it allows players to experience the game as if they were part of an elite military unit, thereby boosting the game's realism.[5] The court further concluded that any reasonable juror would agree that the presence of Humvees in the game adds at least some level of artistic value.

2.2 Polaroid Factors

The second step in evaluating the conflict between freedom of expression and trademark rights involves applying an 8-factor test, known as the Polaroid factors, which originated from the Polaroid Corp. v. Polarad Electronics Corp. case.[6] This test examines the following elements:

1) The strength of the trademark;

2) The similarity between the two marks;

3) The relatedness or proximity of the products;

4) The likelihood that the original trademark owner would expand into the same market as the junior user;

5) The potential for consumer confusion between the marks;

6) The defendant’s good faith in using the mark;

7) The quality of the defendant’s products;

8) The level of sophistication of the consumers making the purchases.

2.2.1 Court's Analysis in Evaluating the Polaroid Factors

The similarity of the marks was examined in light of the argument that "if marks are used for different purposes and presented differently to the public, even when involving the same product, they are considered dissimilar and not problematic." In this case, the court concluded:

i. That AMG's goal was to sell vehicles to military customers.

ii. While Activision's goal was to develop video games that recreate a military setting for consumers.

Regarding the proximity of the products, which refers to whether the products might compete in the same market, AMG claimed it also licensed the use of Humvee images as part of its business. However, the court dismissed this argument, reasoning that the proximity of products should be based on "the core purpose of the business, not a peripheral one."[7]

The assessment of good faith focuses on whether the defendant used the mark with the intent to exploit the plaintiff’s reputation or cause potential confusion. The court found that AMG failed to demonstrate that Activision acted in bad faith when including Humvees in Call of Duty.[8]

When considering consumer sophistication, the court highlighted that AMG's customers, militaries around the world, are not buying Call of Duty, just as Call of Duty players are not purchasing Humvees. The court likened this situation to moviegoers, who are generally savvy enough to understand that a brand's brief and occasional appearance in a film does not imply sponsorship. It concluded that video game players should be viewed as equally discerning.[9]

2.3 Rogers Test Assessment

The court based its ruling on uncontested facts, including that the vehicles shown in Call of Duty match what real soldiers would expect to see in the time and place depicted in the game, and that Humvees are commonly used in military operations worldwide. As realism was a key artistic objective of the game, the inclusion of real-world vehicles clearly served that purpose. The presence of Humvees was deemed essential to the game's experience, as the vehicles enhanced the artistic intent by enabling player interaction with the virtual environment.

As a result, the court determined that Activision successfully refuted AMG's claim that “the use of Humvees was a blatant and improper exploitation of their reputation rather than an integral part of the game and its creators' artistic vision.” The court was also not persuaded that the use of Humvees was driven purely by financial motives rather than artistic ones. Thus, the court concluded that there was no trademark infringement.

3. Conclusion

The AMG v. Activision case illustrates a balance between trademark rights and artistic expression in U.S. intellectual property law. The court ultimately ruled in favor of Activision, holding that the depiction of Humvees in the Call of Duty video game series was an integral part of the game's artistic expression and served the purpose of enhancing realism. The court's decision was based on the Rogers test, which grants priority to artistic relevance over trademark claims, provided the use does not mislead consumers or imply false association.

The court's evaluation of the Polaroid factors further supported this conclusion, particularly the distinctions between the goals of AMG and Activision. While AMG's primary business is selling vehicles to military customers, Activision's use of Humvees was tied to the creation of a realistic military simulation within its video games. The court emphasized that the two parties operated in entirely different markets, diminishing the likelihood of consumer confusion.

This case sets an important precedent for the use of trademarks in artistic works, particularly in the context of video games. It reinforces the notion that trademarks can be incorporated into artistic works when they contribute to the overall artistic purpose, without infringing upon the intellectual property rights of trademark holders.

[1] https://casetext.com/case/am-gen-llc-v-activision-blizzard-inc

[2] 15 U.S.C. Sec. 1051 et seq.

[3] “The balance [between trademark interest and First Amendment speech interests] will normally not support application of the [Lanham] Act unless [the use of the trademark] has no artistic relevance to the work, or, if it has some artistic relevance, unless [the use of the trademark] explicitly misleads as to the source or the content of the work.”

[4] Rogers v. Grimaldi, 875 F.2d 994 (2d Cir. 1989). In: AMG v. Activision, 17 Civ. 8644 (GBD) (S.D.N.Y. 2020), p. 7.

[5] AMG v. Activision, 17 Civ. 8644 (GBD) (S.D.N.Y. 2020), p. 11–12.

[6] Polaroid Corp. v. Polarad Electronics Corp., 287 F.2d 492, 495 (2d Cir. 1961).

[7] AMG v. Activision, 17 Civ. 8644 (GBD) (S.D.N.Y. 2020), p. 13.

[8] ibid p.14-16.

[9] ibid p.16-19.