The US Supreme Court rejected First Amendment defenses raised by the maker of whiskey bottle-shaped dog chew toys branded BAD SPANIELS based on claims of trademark infringement and dilution of JACK DANIEL’S marks.

Factual Background

This case involves trademark infringement and dilution claims brought by Jack Daniel’s Properties, Inc. (Jack Daniel’s) against VIP Products LLC (VIP) regarding its chewable dog toy that was designed to resemble a bottle of Jack Daniel’s whiskey. The Jack Daniel’s and VIP products and stylized labels are depicted side-by-side below:

The dog chew toy displayed a label with “Bad Spaniels” in place of “Jack Daniel’s.” The phrase “Old No. 7 Brand Tennessee Sour Mash Whiskey” was replaced with the phrase “The Old No. 2 On Your Tennessee Carpet.” Jack Daniel’s owns numerous trademark registrations, including the word mark JACK DANIEL’S as well as various design marks for the label.

Jack Daniel’s demanded that VIP stop selling its BAD SPANIELS product. In response, VIP filed a lawsuit seeking declaratory relief that its BAD SPANIELS mark did not constitute trademark infringement or dilution to the JACK DANIEL’S brand. In its lawsuit, VIP claimed to be the owner of the BAD SPANIELS trademark and trade dress for its dog chew toy. As discussed below, this statement came back to bite VIP when the case was brought before the Supreme Court. Jack Daniel’s counterclaimed for trademark infringement and dilution.

VIP sought summary judgment against Jack Daniel’s counterclaim by arguing that VIP’s BAD SPANIELS mark was a parody of the JACK DANIEL’S mark and therefore qualified for fair use protection under the First Amendment. At trial, the district court held in favor of Jack Daniel’s, finding that consumers were likely to be confused as to the source of the VIP dog toy (i.e., trademark infringement), and that the VIP dog toy diluted the strength of Jack Daniel’s trademark rights by associating the Jack Daniel’s product with “canine excrement.” VIP Products LLC v. Jack Daniel’s Properties, Inc., 291 F.Supp.3d 891, 903-905 (D Ariz. 2018).

This decision was reversed on appeal by the US Court of Appeals for the Ninth Circuit, which held that there was no infringement since VIP’s product was shielded by the First Amendment under the seminal Rogers v. Grimaldi test (or Rogers test), which protects “expressive works” under the First Amendment. In the Ninth Circuit’s view, the VIP dog toy, despite being a commercial product, qualified for Rogers’ protection as an expressive work because of its “humorous message.” VIP Products LLC v. Jack Daniel’s Properties, Inc., 953 F.3d 1170, 1175-1176 (9th Cir. 2020).

Under the Rogers test, trademark infringement claims against uses associated with expressive works must be dismissed unless the plaintiff can show that the challenged use either “has no artistic relevance to the underlying work whatsoever, or, […] explicitly misleads as to the source or the content of the work.” Rogers v. Grimaldi, 875 F.2d 994, 999 (2d Cir. 1989). On the question of trademark dilution, the Ninth Circuit held that the Lanham Act’s exception for the “noncommercial use” of another party’s mark shielded VIP from liability. VIP Products LLC v. Jack Daniel’s Properties, Inc., 953 F.3d at 1176 (citing 15 U.S.C. §1125(c)(3)(C)).

The Ninth Circuit found that use of a mark can be “noncommercial” even when it involved selling a product if such use was “to convey a humorous message” such as a parody in this case. Id. (citing Nissan Motor Co. v. Nissan Comput. Corp., 378 F.3d 1002, 1017 (9th Cir. 2004)).

Jack Daniel’s petitioned the Supreme Court to reject the Ninth Circuit’s reasoning and hold that (i) the Ninth Circuit applied the Rogers test in error by defining too broadly the notion of an “expressive work” and (ii) that the noncommercial use exception to dilution liability does not apply to commercial trademark uses simply because they involve parody.

Supreme Court’s Decision

The Supreme Court unanimously agreed with Jack Daniel’s by vacating and remanding the Ninth Circuit’s decision. On the infringement issue, the Court held that the Ninth Circuit misinterpreted the applicability of the Rogers test. Specifically, the Court held that the test only applies to cases involving “non-trademark uses” or, more specifically, when the plaintiff’s mark is used not to designate source, “but solely to perform some other expressive function.” See Jack Daniel’s Properties, Inc. v. VIP Products LLC, No. 22-148, 2023 WL 3872519 at *2, 7 (U.S. June 8, 2023) (citing Mattel, Inc. v. MCA Records, Inc., 296 F. 3d 894, 901) (use of the Barbie name in a band’s song “Barbie Girl” was “not [as] a source identifier”).

By contrast, when the defendant’s use is “at least in part” source-identifying, which the Court found to be the case with the VIP dog toy, the Rogers test is inapplicable as a defense to likelihood of confusion claims. Jack Daniel’s Properties, Inc., 2023 WL 3872519 at *2. In this regard, the Court cited VIP’s statements at the trial level acknowledging its ownership of the BAD SPANIELS trademark and trade dress for its dog chew toy. The Court emphasized that “VIP conceded that it used the Bad Spaniels trademark and trade dress as source identifiers” and that “[VIP] thus represented in this very suit that the [BAD SPANIELS] mark and [trade] dress, although not registered, are used to ‘identify and distinguish [VIP’s] goods’ and to ‘indicate [their] source.’” Id. at *2, 9 (citing 15 U.S.C. §1127).

As to Jack Daniel’s dilution claim, the Court rejected the Ninth Circuit’s expansive reading of the noncommercial use exception, holding that the use of another party’s mark in a commercial and trademark (i.e., source identifying) manner is not protected from liability on this basis simply because it involves some amount of parody. Here, the Court noted that the noncommercial use defense “does not shield parody, criticism, or commentary when an alleged diluter uses a mark as a designation of source for its own goods.” Jack Daniel’s Properties, Inc., 2023 WL 3872519 at *2.

Accordingly, the case was remanded to the district court to answer the likelihood of confusion question.

Future Implications of the Supreme Court’s Decision

In stressing that its opinion is narrow, the Court stated “[w]e do not decide whether the Rogers test is ever appropriate, or how far the ‘noncommercial use’ exclusion goes.” Id. at *11. As such, it remains to be seen how the Rogers test and the noncommercial use exception will be applied by lower courts going forward. However, in the present case, the Court’s holding provides some helpful guidelines as follows:

On infringement, we hold only that Rogers does not apply when the challenged use of a mark is as a mark. On dilution, we hold only that the noncommercial exclusion does not shield parody or other commentary when its use of a mark is similarly source-identifying. It is no coincidence that both our holdings turn on whether the use of a mark is serving a source-designation function. The Lanham Act makes that fact crucial, in its effort to ensure that consumers can tell where goods come from.

Id. at *11.

Brand owners and trademark practitioners alike would be wise to monitor the future application of the Court’s holding as well as the result of this case on remand.

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