Robinhood defeats Ice Cube's false endorsement case on second try

3 minute read

Big3 founder Ice cube at the opening weekend game at Banker's Life Fieldhouse. Mandatory Credit: Trevor Ruszkowski-USA TODAY Sports

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  • Court previously dismissed rapper's claims over newsletter in June
  • Amended allegations didn't show Robinhood implied endorsement

(Reuters) - Stock-trading app Robinhood Markets Inc escaped rapper Ice Cube's false endorsement claims on Monday after a San Francisco federal court dismissed his lawsuit for a second time, this time with prejudice.

New allegations about Robinhood's alleged misuse of Ice Cube's likeness and rap lyrics in a newsletter still failed to show that the company suggested he endorsed it, U.S. Magistrate Judge Laurel Beeler said.

False-endorsement claims require "more than alleged unauthorized use," Beeler said in the opinion.

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"The judge is wrong," Ice Cube's attorney Michael Taitelman of Freedman + Taitelman said in an email. "You cannot take people's lyrics and likeness as an endorsement without permission."

Robinhood spokesperson Jacqueline Ortiz Ramsay said in an email that the company is pleased with the decision and will "always vigorously defend its reputation against false accusations of wrongdoing."

Mitchell Langberg and Matthew McKissick of Brownstein Hyatt Farber Schreck represented the company.

Ice Cube, whose legal name is O'Shea Jackson Sr, sued Menlo Park, California-based Robinhood in March for using a picture of him in its newsletter on financial issues captioned with the line "correct yourself, before you wreck yourself" – a take on his famous rap line "check yo self before you wreck yo self" –referring to stock corrections.

The complaint called the company behind the trading app, which is known for attracting inexperienced investors and has been subject to several government investigations, "an unscrupulous and predatory conglomerate" and said he would never promote its "horrible products and services." Ice Cube in the complaint said Robinhood's use of his image and catchphrase amounted to false endorsement and violated his publicity rights under California law.

But Beeler said in June that the newsletter was "demonstrably not an advertisement," and Ice Cube lacked standing because Robinhood's use of his image and catchphrase didn't suggest he endorsed the company.

Ice Cube repleaded his false-endorsement claim in July, citing Congressional testimony and U.S. Securities and Exchange Commission filings to argue that the newsletter was meant to "lure in" users and that the use of his likeness and lyrics confused consumers.

But Beeler said Monday that the new complaint "falls for the same defect found in the original" because the newsletter didn't suggest an endorsement.

"Ice Cube is a celebrity. If the unauthorized use of his image suggested his endorsement of Robinhood, then he would suffer injury in fact," Beeler said. "But the image and phrase are not an endorsement: they illustrate a point in the newsletter about a market correction in tech stocks."

The new allegations "do not add facts that create any likelihood of consumer confusion," Beeler said.

The case is Jackson v. Robinhood Markets Inc, U.S. District Court for the Northern District of California, No. 3:21-cv-02304.

For Ice Cube: Michael Taitelman and Sean Hardy of Freedman + Taitelman

For Robinhood: Mitchell Langberg and Matthew McKissick of Brownstein Hyatt Farber Schreck

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Robinhood dodges Ice Cube's false endorsement claims

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Blake Brittain reports on intellectual property law, including patents, trademarks, copyrights and trade secrets. Reach him at blake.brittain@thomsonreuters.com