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  • Writer's pictureDavid Baker

SCOTUS misplaces sense of humor

Court rules for Jack Daniels in “parody” dog toy trademark infringement case

Everyone loves dogs, right? Many folks enjoy a well-aged whisky. And everyone loves a good joke. So, why wasn’t the Supreme Court laughing when a dog toy parodied Jack Daniels whisky and wound up being sued for trademark infringement? The problem was that the parody went too far. It used the joke as a source identifier, which as any good trademark attorney knows is a real no-no when it comes to trademarks.

In Jack Daniels Properties, Inc. v. VIP Products LLC, (slip. op. No. 22-148, June 8, 2023), the U. S. Supreme Court (“SCOTUS”) recently reversed the Ninth Circuit Court of Appeals in ruling that a “Bad Spaniels” dog toy designed to look like a Jack Daniels liquor bottle did not avoid trademark infringement merely because it was a parody. The decision has been long-awaited because of the potential impact it could have on the “fair use” defense and the not uncommon practice of developing parody consumer products.

It also pitted, once again, the First Amendment right of free speech against the Lanham Act protecting trademarks, a battle that has been fought frequently before the Supreme Court in recent years.

What Led to the Lawsuit?

As we’ve discussed several times in the IP Update, VIP Products LLC (“VIP”) makes a squeaky chewable dog toy with a “Bad Spaniels” logo that was designed to look just like a bottle of Jack Daniel’s whiskey. The tag line on the dog toy is “The Old No. 2 On Your Tennessee Carpet” with fine print that reads “43% poo by volume” and “100% smelly.”

VIP also has a line of similar dog toys parodying beverage brands that includes Dos Perros, Smella Arpaw and Doggie Walker. And VIP registered trademarks for them.

Unfortunately for VIP, Jack Daniels Properties, Inc. (“Jack Daniels”) was the first of the parodied brands to challenge VIP’s trademark use and threatened to (and eventually did) file a trademark infringement. But VIP preemptively filed its own lawsuit seeking a favorable declaratory judgment suit and moved for summary judgment. The district court denied VIP’s motion and rejected VIP’s argument that parody protected its use, because VIP uses “Bad Spaniels” as a trademark to identify the source of the dog toy.

On appeal, the Ninth Circuit reversed and held that a more specialized analysis applied to trademark infringement cases involving parody. Known as the Rogers test, the test the appeals court applied can shield the unauthorized use of a trademark as an “expressive work” if it “communicates a humorous message”. It originated from a case involving a Federico Fellini movie entitled “Fred and Ginger” about two fictional dancers who imitated the famous duo (Rogers v. Grimaldi, 875 F. 2d 994 (2d Cir. 1989)). In Rogers, the Second Circuit permitted the use of Ginger Rogers’s name in the title of an artistic work as an “expressive element” that neither indicated the source of the movie, nor “explicitly mislead” consumers.

When applied, Rogers requires dismissal of a trademark infringement claim regarding the use of a mark in an “expressive work” as fair use, unless the trademark owner can show one of the following:

  • The challenged use of a mark has no artistic relevance to the underlying work.

  • The challenged use of a mark explicitly misleads as to the source or content of the work.

But Rogers Doesn’t Apply Here, per SCOTUS

In its June 8 decision reversing the appeals court, SCOTUS held that the Rogers test does not apply when a mark is used to designate the source of goods or services. VIP had used features of the Jack Daniel’s marks to identify its own products (as a “source identifier”) so SCOTUS rejected application of the Rogers test. It also remanded the case back to the district court for a standard analysis regarding likelihood of confusion. (“Likelihood of confusion” is the standard test used to determine trademark infringement and to carry out the intention of the Lanham Act to protect consumers from confusion over the source of goods and services.)

In addition to rejecting the Ninth Circuit’s attempt to expand the Rogers test, SCOTUS also addressed the issue of trademark dilution. Specifically, the Court found that the Ninth Circuit had erred in finding that the dog toy seller was shielded from liability simply because the Bad Spaniels toy parodied or conveyed a humorous message about Jack Daniel’s. The Court pointed out that the fair use exclusion, codified in 15 U.S.C. § 1125(c)(3)(A), specifically states it does not apply when the use at issue is “as a designation of source of the person’s own goods or services.” Thus, the Court found that, because the seller used the challenged marks as source identifiers, it could not benefit from the fair use exception.

Nonetheless, the Court made clear that its ruling was narrow and limited only to holding that (a) the Rogers test does not apply when the challenged use of a mark is as a mark (a use that is precluded from special First Amendment protection; and (b) the fair use exclusion does not shield parody or other commentary when its use of a mark is similarly source-identifying. In a concurring opinion from Justice Gorsuch and joined by Justices Thomas and Barrett, the justices advised lower courts to handle Rogers “with care” and hinted that they were open to reconsidering the case in its entirety in the future.

Why It Matters.

There are numerous defenses to a claim of trademark infringement and when there is humor involved it is not uncommon for a defendant to include the parody defense “just in case.”

In the Jack Daniels case, the Supreme Court’s decision will limit the defenses available to companies that use the parody defense even when they may actually be engaged in parodies. Companies that intend to use parodies of other companies’ trademarks should be aware that they may not be able to simply sidestep the standard trademark infringement and dilution analyses by invoking the Rogers test to argue that their expressive works are fair use.

Going forward, if a company uses a mark to identify its own goods or services, the Rogers test will not apply, even if that mark is part of a parody. A trademark infringement claim involving such parody marks still will be determined by whether there is a “likelihood of confusion” about the source of a product or service. This is in line with the standard test for infringement in other circumstances.

Further, those who use parodies to identify their own goods or services will be unable to claim that the noncommercial exception to dilution applies.

Nevertheless, it is important to understand that the Supreme Court’s decision does not limit “fair use” arguments where the parody itself is NOT functioning as a trademark. When a parody conveys an informational message without indicating the source of goods or services it is likely the Rogers test WILL apply.

The Court’s decision also does not limit the argument in infringement cases that parody makes consumer confusion less likely, nor does it limit the argument in dilution by tarnishment cases that parody will not harm the reputation of a famous mark.

Funny stuff.

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