By Edward M. Roney, IV, Intellectual Property

The Dog Days Are Over for Jack Daniel’s – A Unanimous Supreme Court Sided with Jack Daniel’s Over a Dog Toy Maker Whose “Bad Spaniels” Toy Parodies the Famous Whiskey Brand

On June 8, 2023, brand owners breathed a sigh of relief with the Supreme Court’s unanimous ruling consistent with prior jurisprudence that potential infringers of a famous trademark are not precluded from liability by merely claiming that their infringing mark includes a parody, critique or commentary of the famous trademark, especially when the infringing mark is used as a source identifier. Jack Daniel’s Properties, Inc. v. VIP Products LLC, No. 22-148. Nor does the inclusion of parody, critique, or commentary of a famous mark automatically entitle the challenged mark to heightened First Amendment protection. The Court narrowed the contours of the Rogers test—which limits trademark liability against expressive works based on famous marks—in finding that an infringers use of a trademark as a source identifier is inappropriate even though the use represents a parody of that trademark. With humor no longer a viable defense to a trademark infringement or dilution claim, potential infringers’ use of famous marks must ensure they satisfy the likelihood of confusion inquiry to avoid liability.

Background

VIP Products sold dog toys using the trademarked shape of the Jack Daniel’s whiskey bottle while also parodying some of the bottle’s distinctive label elements such as by replacing “Jack Daniel’s” with “Bad Spaniels” and “Old No. 7 Brand Tennessee Sour Mash Whiskey” with “the Old No. 2, on your Tennessee carpet.” After Jack Daniel’s demanded that VIP Products stop selling the toy, VIP Products sought a declaratory judgment that its toy neither infringed nor diluted Jack Daniel’s trademarks. In applying the Rogers test, the Ninth Circuit found that “Bad Spaniels” qualified as an expressive work entitled to First Amendment protection as a parody.

Supreme Court’s Ruling

Courts have recognized a tension between federal trademark law codified in the Lanham Act and the First Amendment, with courts using the First Amendment to trump trademark claims. In Rogers v. Grimaldi, the Second Circuit determined that federal trademark law should be narrowed to exclude the use of expressive works based on famous marks unless the use lacks artistic relevance or directly misleads the source of the work. Many courts have adopted the resulting Rogers test to provide broad protection of expressive works based on famous marks from trademark liability. Further, courts have applied the Rogers test to a broad range of expressive works—more recently to protect realistic depictions of virtual worlds that incorporate famous trade dress.

Without deciding whether the Rogers test has merit, the Court held that the Rogers test does not apply “when an alleged infringer uses a trademark in the way the Lanham Act most cares about: as a designation of source for the infringer’s own goods.” The Court recognized that the Ninth Circuit’s interpretation of the Rogers test would “offer an escape from the likelihood of confusion inquiry and a shortcut to dismissal . . . .” Instead, the Court noted that its interpretation of the Rogers test does not change because the use of a mark has other expressive content beyond a source identifier. Indeed, the Court highlighted that its interpretation “dramatically parts ways with the Ninth Circuit, which thought that because Bad Spaniels ‘communicates a humorous message,’ it is automatically entitled to Rogers’ protection.”

However, the Court sidestepped the issue of whether the Rogers test is sound jurisprudence. The Court narrowly defined its holding that on infringement, “Rogers does not apply when the challenged use of a mark is as a mark.” Further, the Court affirmed that “[o]ver the decades, the lower courts adopting Rogers have confined it to similar cases, in which a trademark is used not to designate a work’s source, but to solely perform some other expressive function.” The Court cited with approval a number of lower federal court decisions such as the U.S. District Court for the Southern District of New York dismissing Louis Vuitton’s trademark suit against Warner Brothers since The Hangover Part II was not using Louis Vuitton as its own identifying mark.

Looking Forward

While the Rogers test has survived, the majority opinion of the Court did not take a firm stance on the Rogers test being a sound inquiry. However, Justice Gorsuch’s concurrence forewarns lower federal courts of the possibility that the Rogers test could face the Court’s scrutiny. As the validity of the Rogers test “remains for resolution another day,” lower federal courts were warned to proceed with caution. As such, these courts may reconsider the balance between federal trademark law and the First Amendment.

Justice Sotomayor’s concurrence joined by Justice Alito emphasized that courts “should treat the results of surveys with particular caution” in parody cases. Further, Justice Sotomayor opined that lower federal courts are cautioned to limit the influence of survey results on likelihood of confusion analyses because other factors “may more accurately track the experiences of actual consumers in the marketplace.” Accordingly, those litigating trademark cases should consider the implications of this warning when relying on surveys.

*Special thanks to Summer Associate Morgan Johnson for help in drafting this alert.

The contents of this publication are intended for general information only and should not be construed as legal advice or a legal opinion on specific facts and circumstances. Copyright 2024.