Bad Spaniels or Jack Daniel’s? SCOTUS Sides with Whiskey Maker in Trademark Dispute

June 8, 2023Legal Alerts

What do a squeak toy, whiskey, and dog poop have in common? If you are silently thinking to yourself “absolutely nothing,” it may surprise you to hear that the U.S. Supreme Court has spent months considering this question. On June 8, 2023, in a long-awaited win for trademark owners, SCOTUS ruled that a lower court erred when it issued a decision finding that a dog toy that parodies a famous liquor bottle, was covered by First Amendment free speech protections. Although this decision leaves open ongoing considerations regarding concerns for First Amendment protection in the context of parodies in trademark disputes, it is seemingly a win for trademark owners looking to enforce their rights against those who leverage those brands to sell non-competitive products that ostensibly intend to “poke fun” at that brand.

In a narrow opinion delivered by Justice Elena Kagan, the U.S. Supreme Court unanimously decided in favor of Jack Daniel’s, vacating the Ninth Circuit’s holding that a poop-themed, squeaky dog toy resembling the iconic whiskey bottle is an expressive work protected by the First Amendment , and therefore, does not infringe on the rights of Jack Daniel’s. As such, SCOTUS remanded the case back to the lower court for determination of the ultimate questions of infringement and dilution.

VIP Products LLC, an Arizona-based dog toy manufacturer, created the chew toy at issue. The dog toy sports the name “BAD SPANIELS” in place of the words “JACK DANIEL’S” and replaces the words “old No. 7 Brand Tennessee Sour Mash Whiskey” with the words “The old No. 2 on your Tennessee Carpet”.  The associated trade dress mimics certain elements of the well-known Jack Daniel’s whiskey bottle. Clearly, VIP Products’ toy alludes to a dog with some very strong digestive issues.

Jack Daniel’s was not impressed with the old No. 2. and sued VIP Products for trademark infringement and dilution. In response, VIP Products moved for summary judgment on both claims arguing that its funny play on words was a parody of the Jack Daniel’s whiskey bottle and was protected by Rogers, a long standing case which established a test often used in considering expressive works in the context of trademark claims. Although the trial court ruled in favor of Jack Daniel’s on both counts, on appeal, the Ninth Circuit reversed the lower court’s decision. To reach its decision reversing the lower court on the question of trademark infringement, the Ninth Circuit relied on the Rogers test, and held that VIP Products’ BAD SPANIELS toy did not infringe Jack Daniels’ trademark rights because it was an “expressive work protected by the First Amendment.”

According to Rogers, there is no likelihood of confusion under trademark law so long as “an expressive work is artistically relevant and not explicitly misleading.” In other words, the Rogers test provides a sort of shield from infringement claims for expressive works. The Lanham Act does not provide exceptions for expressive works. Instead, the Lanham Act simply analyzes whether a work is confusingly similar, expressive or not. Courts have applied the Rogers test to “expressive works” such as movies, music, artwork, and books, and in doing so, have found that some of these works are expressive and protected by the First Amendment (i.e., they do not infringe). Courts have not typically applied the Rogers test to ordinary consumer products, like dog toys.

With regard to the dilution claim, the Ninth Circuit held that VIP Products dog toy was a form of “non-commercial use,” and therefore, did not dilute Jack Daniel’s trademark. In its decision, the Circuit Court reasoned that “use of a mark may be non-commercial even if used to sell a product.” Similar to how courts use the Rogers test to carve out an exception for trademark infringement, “non-commercial use” falls within an exception to the Federal Trademark Dilution Act.

On March 22, 2023, SCOTUS heard oral arguments from both parties. Lisa Blatt, the attorney for Jack Daniel’s, held a strong position for both trademark infringement and dilution, relying on the text of the Lanham Act for support. With regard to infringement, Blatt emphasized that the Lanham Act does not include a First Amendment exception for likelihood of confusion. Rather, the Lanham Act only focuses on whether there is a likelihood of confusion. Blatt presented convincing arguments that the Court should focus on the Polaroid Factors in its analysis and not the Rogers test because the broad application of the Rogers test as endorsed by the Ninth Circuit essentially circumvents the Lanham Act. With regard to dilution, Blatt again relied on the text of the Lanham Act and argued that VIP Products used Jack Daniel’s famous mark to commercialize, leverage, and capitalize on sales, which is the opposite of the lower court’s finding of “non-commercial use.”

The Justices also briefly discussed trademark dilution and non-commercial use, but a majority of the discussion focused on the Rogers test and likelihood of confusion.

During oral arguments, some of the Justices seemed concerned that “the Supreme Court will have to overrule Rogers in order to focus on a likelihood of confusion,” which as many critics argued, could have significant implications for trademark use in more traditional expressive works such as films, among other things. In a discussion about confusion, Justice Samuel Alito remarked that a reasonable consumer likely would not be confused and believe Jack Daniel’s was the source of a dog toy referencing dog poop. In Justice Alito’s opinion, no one would believe Jack Daniel’s marketing team would have approved a poop-themed toy in connection with its whiskey.

In a discussion about the definition of a parody and applying the Polaroid Factors, Justice Sonia Sotomayor made a blanket statement that “what is relevant is whether the person viewing it would get the joke.” Blatt quickly replied to Justice Sotomayor, stating, “It’s not that you get the joke. It’s whether you get that someone other than the brand is making the joke.” From the oral arguments, one thing was clear: the Court seemed hesitant to do away with the Rogers test completely.

Parody in dog toys is not a new concept. During oral arguments, the Justices also discussed a comparable case based on another dog toy, dubbed Chewy Vuiton. In 2006, Louis Vuitton sued a company called Haute Diggity Dog for trademark infringement, trademark dilution, and copyright infringement for its line of Chewy Vuiton purse shaped chew toys. In that case, the court held that the Chewy Vuiton toys were parodies of Louis Vuitton’s trademarks and designs and as such, did not infringe on Louis Vuitton’s trademark rights.

So how is this case different? Here, unlike in Chewy, VIP conceded to using the Bad Spaniels mark as a trademark and trade dress. In the Jack Daniel’s decision, SCOTUS did not perform an analysis under the likelihood of confusion factors and whether the use by VIP here amounts to a finding of a likelihood of confusion. Rather, SCOTUS remanded this issue to the lower courts stating in relevant part, “although VIP’s effort to parody Jack Daniel’s does not justify use of the Rogers test, it may make a difference in the standard trademark analysis.  This Court remands that issue to the courts below.” The fact that the Ninth Circuit relied on the Rogers test without sufficient consideration of the Lanham Act’s likelihood of confusion analysis is the very reason SCOTUS decided to hear the case.  

With regard to the dilution claim, the Court held that “the non-commercial exclusion does not shield parody or other commentary when its use of a mark is similarly source-identifying.” Considering the amount of discussion about Rogers during oral arguments, it was surprising that the Justices decided that the Rogers test does not apply in this case.

Brand owners should take comfort from SCOTUS’ ruling today, and its recognition that just because a particular product may be meant to invoke a laugh with an intended “wink and nod” to a well-known brand, that alone does not give carte blanche to third parties to use that well-known brand to sell another product.

If you or your business are considering expanding your brand or are interested in learning about how to enforce your rights, the intellectual property attorneys at Dinsmore & Shohl LLP are here to help.