On June 8, 2023, the Supreme Court issued a unanimous decision in Jack Daniel’s Properties, Inc. v. VIP Products LLC, 599 U.S. ---, 2023 WL 3872519, reversing VIP Products’ victory in a trademark case against Jack Daniel’s, and remanding to the Arizona District Court for further proceedings.
What You Need to Know
- The Ninth Circuit previously found (in VIP Products LLC v. Jack Daniel’s Properties, Inc., 953 F.3d 1170(9th Cir. 2020)) that VIP Products’ sales of a dog toy resembling Jack Daniel’s whiskey bottle was a permissible ‘fair use’ of trademarks under the First Amendment.
- The Supreme Court disagreed, holding that the Rogers test for First Amendment ‘fair use’ is only applicable in a small number of cases, cases that do not involve the use of another’s trademark “as a designation of source for the infringer’s own goods…”.
When Chris Stapleton sings “You’re as sweet as Tennessee Whiskey…” we all know what he’s talking about, even though he never mentions the particular whiskey by name[1]. The Jack Daniel’s brand of whiskey, which is made in a dry county in Tennessee, has a large and devoted following. And there is little doubt that some of those followers are dog owners. So when a company called VIP Products put out a squeaky dog toy resembling the Jack Daniel’s bottle, what were people to assume? That Jack Daniel’s licensed the dog toy? Or, that the toy was an unlicensed parody? Believe it or not, this issue made it all the way to the Supreme Court.
The dispute began back in 2014, when VIP Products introduced the ‘Bad Spaniels’ dog toy. As you might expect, a cease and desist letter from Jack Daniel’s soon followed. After that, the parties were in litigation in Federal District Court in Arizona (where VIP Products is based). After a 2017 bench trial, the District Court found in favor of Jack Daniel’s, and held that consumers were likely to be confused about the source of the dog toy. ‘Likelihood of confusion’ is the touchstone of trademark infringement, and so the Court found that VIP Products had infringed upon Jack Daniel’s trademark rights.
VIP Products appealed the decision to the Court of Appeals for the Ninth Circuit. The Ninth Circuit reversed, finding that the dog toy was an “expressive work” that must be examined under the standard set forth in Rogers v. Grimaldi[2]. Rogers is a 1989 decision that stands for the proposition that expressive works like books, movies and television shows should be able to use trademarks freely (in accordance with the First Amendment), so long as there is some relationship to the story being told. The Ninth Circuit directed the District Court to consider Rogers on remand. Under Rogers, Jack Daniel’s had to prove either: (a) that the use of its trademarks in the dog toy had “no artistic relevance” to the product, or, (b) if it had some artistic relevance, that use of the marks “explicitly misleads” consumers. Jack Daniel’s could not prove either, and the District Court thus entered summary judgment for VIP Products. Jack Daniel’s appealed to the Ninth Circuit, and the Ninth Circuit affirmed the judgment in favor of VIP Products. Jack Daniel’s then appealed to the Supreme Court.
Writing for a unanimous Court, Justice Kagan reversed and remanded the case, essentially holding that the District Court got it right the first time[3]. The Court’s key advice: “When an alleged infringer uses a trademark as a designation of source for the infringer’s own goods, the Rogers test does not apply.” Put simply, the Court held that Rogers has no relevance when an alleged infringer is using another’s mark in connection with a commercial product (like a dog toy), as opposed to an artistic work (like a movie). The Court noted, however, that “VIP uses the [Jack Daniel’s] marks…in an effort to ‘parody’ or ‘make fun’ of Jack Daniel’s…[a]nd that kind of message matters in assessing confusion because consumers are not so likely to think that the maker of a mocked product is itself doing the mocking.” So, on remand, the District Court will need to look at the issue of confusion through the lens of parody. Notably, Jack Daniel’s was successful in proving confusion during the 2017 bench trial, with the District Court holding that the parody defense could not save VIP Products.
So what are the key takeaways from this case? The biggest is the narrowing of the First Amendment defense. Since 1989, the federal courts have been expanding the concept of trademark fair use under Rogers. The Court made clear that Rogers only applies to a very small class of cases – ones where the product accused of infringement is itself an artistic work. In Rogers, the product was a movie loosely based on the lives of Fred Astaire and Ginger Rogers. Here, the product is dog toy. The Court stated when an alleged infringer uses another’s mark “as a designation of source for the infringer’s own goods” then Rogers (and the First Amendment protections it provides) do not apply. What this means is that a First Amendment defense will likely not succeed in future cases where the product accused of trademark infringement is a commercial product, as opposed to an artistic one.
Another interesting aspect of this case is the Court’s commentary on the use of survey evidence in trademark cases. The Court remanded for Jack Daniel’s to show that consumers are likely to be confused into believing that the ‘Bad Spaniels’ dog toy was affiliated with or sponsored by them. This would typically be done through consumer survey evidence. But Jack Daniel’s already proved confusion when they prevailed in the District Court in 2017, a point the Supreme Court noted (“The District Court found, based largely on survey evidence, that consumers were likely to be confused about the source of the Bad Spaniels toy.”). So why not just reverse and direct a finding for Jack Daniel’s? Well, the Court clearly wanted the District Court to consider the concept of parody more carefully when assessing likelihood of confusion (“But a trademark’s expressive message—particularly a parodic one, as VIP asserts—may properly figure in assessing the likelihood of confusion.”). Justice Sotomayor’s concurrence also warns lower courts about placing too much emphasis on surveys, and notes that surveys often don’t take into account the impact of parody on the consumer. So the Court’s message to the District Court was ‘look at everything again, and don’t place too much emphasis on consumer surveys.’
It is also interesting that Justice Kagan wrote the opinion here, with Justice Sotomayor writing a strong concurrence. Not more than a month ago these two Justices were at odds with one another over the result in the Warhol case[4], which dealt with fair use in the copyright arena. Justice Kagan was pretty vocal in her support of artists and their right to use prior works in Warhol, whereas Justice Sotomayor was not. Here, Justice Kagan is going in the opposite direction – she is saying that a dog toy is not the same artistically as a motion picture, and therefore doesn’t deserve the same fair use protections, and she is probably right. That said, both decisions indicate a strong preference of the Court to protect intellectual property rights (both Lynn Goldsmith’s and Jack Daniel’s).
On remand, the Arizona District Court will need to determine what a consumer is more likely to assume – that the ‘Bad Spaniels’ dog toy is a parody, or that it is a licensed Jack Daniel’s product. While this might seem like a straightforward inquiry, opinions amongst dog owners, attorneys, and everyone else, are varied. The court may want to listen to a little Chris Stapleton, and enjoy some “Tennessee Whiskey,” while struggling to find the right outcome.
[1] Credit to the writer of “Tennessee Whiskey,” David Allan Coe, and George Jones, who made the song famous over forty (40) years ago.
[2] Rogers v. Grimaldi, 875 F. 2d 994 (2d Cir. 1989).
[3] You can read the entire Supreme Court decision here.
[4] See Andy Warhol Foundation for the Visual Arts, Inc. v. Goldsmith, 143 S.Ct. 1258 (2023), holding that Andy Warhol infringed photographer Lynn Goldsmith’s copyright in creating a painting of Prince.
