In Jack Daniel’s v. Bad Spaniels Trademark Case, Supreme Court Holds Parody Products on a Short Leash

June 12, 2023

–Client Alert

In Jack Daniel’s v. Bad Spaniels Trademark Case, Supreme Court Holds Parody Products on a Short Leash

Sullivan Client Alert

On June 8, 2023, in Jack Daniel’s Properties, Inc. v. VIP Products LLC, the U.S. Supreme Court ruled that the First Amendment does not provide a first line of defense for parody products using third-party trademarks as source-identifiers for a producer’s own goods. Instead, such use is subject to the traditional “likelihood of confusion” analysis—even in cases where that use is expressive. Similarly, the non-commercial use exception to dilution liability under the Lanham Act does not give parody, criticism, or commentary a get-out-of-jail-free card when an alleged diluter uses the mark as an indicator of source for its own goods.

Background

The case centered around a dispute between Jack Daniel’s Properties, Inc., renowned for its whiskey brand, and VIP Products, LLC, a company that sells dog toys parodying famous beverage bottles. Among the toys in VIP’s “Silly Squeakers” product line were “Fluffball Cinnamon Whiskey” (a parody of Fireball) and “Smella Arpaw” (a parody of Stella Artois).

At issue in this case was a toy that imitated the Jack Daniel’s whiskey bottle, replacing the brand name with “Bad Spaniels” and altering the text for parodic effect, such as “the Old No. 2 on your Tennessee Carpet” instead of “the Old No. 7 Brand Tennessee Sour Mash Whiskey.” The toy also incorporated other humorous elements reminiscent of the whiskey bottle, such as the wording “43% poo by vol.” and “100% smelly.”

Procedural History

In 2014, after receiving a cease and desist letter from Jack Daniel’s, VIP filed an action in the U.S. District Court for the District of Arizona seeking a declaration that its dog toy did not infringe or dilute Jack Daniel’s trademarks. Jack Daniel’s countersued for trademark and trade dress infringement and dilution. The court ruled in favor of Jack Daniel’s, holding that VIP had infringed Jack Daniel’s trademarks and trade dress and diluted Jack Daniel’s famous brand by tarnishment.

On appeal, the Ninth Circuit vacated the district court’s judgement on infringement and reversed as to dilution.

On the issue of infringement, the court stated that the lower court should have applied the “Rogers test,” derived from Rogers v. Grimaldi, a 1989 Second Circuit decision, rather than a traditional likelihood of confusion analysis. The Rogers test provides heightened First Amendment protection to expressive works. To establish infringement under Rogers, a trademark owner must show that the alleged infringer’s use of the mark is either (1) not artistically relevant to the underlying work, or (2) explicitly misleading as to the source or content of the work. Here, the court determined that by virtue of its humorous message, the Bad Spaniels dog toy was an expressive work eligible for the Rogers analysis.

On the issue of dilution, the court concluded that the toy’s expressive nature constituted “non-commercial use” of Jack Daniel’s marks. Therefore, the court held that the toy did not create an association that harmed the reputation of the marks, and it found VIP not liable for dilution.

On remand, the district court found Jack Daniel’s could not meet the Rogers test and ruled for VIP. The Ninth Circuit affirmed, and Jack Daniel’s appealed the decision to the Supreme Court.

Supreme Court Decision

In a unanimous decision, the Supreme Court ruled that the First Amendment does not shield VIP’s dog toys from liability for trademark infringement and dilution. The Court held that the Rogers test does not apply when an alleged infringer uses a trademark as a designation of source for its own goods. The mere fact that the mark includes an expressive element—such as the Bad Spaniels parody of Jack Daniel’s—does not exempt it from the likelihood of confusion analysis. As Justice Kagan made clear, Rogers does not insulate “from ordinary trademark scrutiny the use of trademarks as trademarks.” The Court was careful to note that Rogers remains intact as it applies to titles of expressive works.

As for dilution, the Court held that the Ninth Circuit’s interpretation that an expressive use is a non-commercial use was too broad. The Court noted that the other exception to the dilution provision of the Lanham Act, the “fair use” exception, provides that parody, criticism, and commentary qualify as fair use, but only if the alleged diluter does not use the trademark as a designator of source for their own goods. To interpret the non-commercial use exception as applying to parody regardless of its use as an indicator of source would render the fair use exception superfluous, contrary to the legislative intent of the statute.

Comments

The Court reaffirmed that likelihood of confusion is the touchstone for evaluating trademark infringement claims. This decision should not be read as an absolute bar to the sale and marketing of parody products. Instead, it ensures that these products will be subject to a standard likelihood of confusion analysis. The parodic nature of the mark is a factor in assessing likelihood of confusion, and a successful parody might survive the analysis if its message is clear. Consumers may not be so confused as to think “that the maker of a mocked product is itself doing the mocking.” This being said, in the aftermath of this case, brand owners have a clearer path to bring claims against parodies using their marks as source identifiers.

Importantly, the Court left in place the Rogers test for its original purpose. Creators still have wide latitude to use third-party marks in titles of expressive works like films, television shows and books. The unanimous opinion of the Court, however, means that sellers of parody products that use third-party trademarks as designators of source for their own goods may find they are barking up the wrong tree.

* * *

The case is Jack Daniel’s Properties, Inc. v. VIP Products LLC, No. 22-148 (U.S. June 8, 2023). The opinion is available here.

If you have any questions or would like to discuss this Client Alert, please contact one of the lawyers listed above or any member of Sullivan’s Trademark Group.

Michael S. Palmisciano

Michael S. Palmisciano

In Jack Daniel’s v. Bad Spaniels Trademark Case, Supreme Court Holds Parody Products on a Short Leash

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