Jack Daniel’s vs Bad Spaniels – What the Supreme Court Ruled

On June 8, 2023, the Supreme Court of the United States (SCOTUS) issued its decision in Jack Daniel's Properties, Inc. v. VIP Products LLC, a case involving a dog toy that parodied the famous whiskey brand. The Court vacated the Ninth Circuit's ruling that applied a special test for trademark infringement claims involving "expressive works" and remanded the case for further proceedings. The Court held that the Lanham Act's standard test for likelihood of confusion applies to all trademark infringement claims, regardless of whether the defendant's use of the mark is expressive or not. However, the Court also recognized that the First Amendment may limit the scope of trademark protection in some cases, and instructed the lower courts to consider relevant constitutional principles when applying the likelihood of confusion test. In this blog, we will discuss the general facts in this case, how the lower, 9th circuit court ruled, get into the SCOTUS ruling, and finally discuss what this might mean moving forward with trademark law.

On June 8, 2023, the Supreme Court of the United States (SCOTUS) issued its decision in Jack Daniel’s Properties, Inc. v. VIP Products LLC, a case involving a dog toy that parodied the famous whiskey brand. The Court vacated the Ninth Circuit’s ruling that applied a special test for trademark infringement claims involving “expressive works” and remanded the case for further proceedings. The Court held that the Lanham Act’s standard test for likelihood of confusion applies to all trademark infringement claims, regardless of whether the defendant’s use of the mark is expressive or not. However, the Court also recognized that the First Amendment may limit the scope of trademark protection in some cases, and instructed the lower courts to consider relevant constitutional principles when applying the likelihood of confusion test. In this blog, we will discuss the general facts in this case, how the lower, 9th circuit court ruled, get into the SCOTUS ruling, and finally discuss what this might mean moving forward with trademark law.

 

The Facts of the Case

 

The case began when VIP Products LLC (“VIP”), a company that makes dog toys, introduced a product called “Bad Spaniels,” which resembled a bottle of Jack Daniel’s whiskey, but with humorous alterations. For example, the words “Jack Daniel’s” became “Bad Spaniels,” and “Old No. 7 Brand Tennessee Sour Mash Whiskey” turned into “The Old No. 2 On Your Tennessee Carpet.” VIP claimed that the toy was a parody of Jack Daniel’s products and was protected by the First Amendment.

 

Jack Daniel’s Properties, Inc. (“Jack Daniel’s”), the owner of several trademarks related to the whiskey brand, sued VIP for trademark infringement and dilution under the Lanham Act, the federal statute that governs trademark law. Jack Daniel’s argued that VIP’s toy created a likelihood of confusion among consumers as to the source or affiliation of the toy, and also tarnished and diluted the distinctive quality and reputation of Jack Daniel’s trademarks.

 

The Ninth Circuit’s Ruling

 

The district court granted summary judgment in favor of Jack Daniel’s on both claims, finding that VIP’s toy was not an expressive work entitled to First Amendment protection, and that it infringed and diluted Jack Daniel’s trademarks. VIP appealed to the Ninth Circuit, which reversed the district court’s ruling on both claims.

 

The Ninth Circuit applied a different test for trademark infringement claims involving expressive works, known as the Rogers test, which was developed by the Second Circuit in Rogers v. Grimaldi, 875 F.2d 994 (1989). The Rogers test provides that an expressive work does not infringe a trademark unless it has no artistic relevance to the underlying work or it explicitly misleads as to the source or content of the work. The Ninth Circuit found that VIP’s toy was an expressive work because it communicated a humorous message, and that it did not infringe Jack Daniel’s trademarks under the Rogers test because it had some artistic relevance to Jack Daniel’s products and did not explicitly mislead consumers.

 

The Ninth Circuit also reversed the district court’s ruling on trademark dilution, finding that VIP’s toy did not harm the reputation of Jack Daniel’s trademarks because it was unlikely to blur or tarnish them in consumers’ minds.

 

The Supreme Court’s Ruling

 

Upon reviewing the Ninth Circuit Court’s decision, the Supreme Court vacated and remanded (essentially overruled and returned the case to the lower court for the case to continue based on the SCOTUS ruling) that decision in a unanimous opinion written by Justice Kagan. It rejected the Ninth Circuit’s use of the Rogers test for trademark infringement claims involving expressive works and held that the Lanham Act’s standard test for likelihood of confusion applies to all such claims.

 

In its decision, SCOTUS explained that the Lanham Act defines a trademark by its primary function: identifying a product’s source and distinguishing that source from others. It noted that trademarks serve important economic and social purposes by helping consumers distinguish the products they want from those that they don’t want while also helping the trademark owners gain the rewards associated with a brand’s goodwill. The Court stated that to protect trademarks from unauthorized use by others, the Lanham Act creates federal causes of action for trademark infringement and dilution.

 

The Court observed that in a typical infringement case, the question is whether the defendant’s use of a mark is likely to cause confusion among consumers as to the source or affiliation of the defendant’s product. The Court noted that this question is usually answered by applying a multifactor test that considers various factors relevant to consumer perception, such as the strength of the plaintiff’s mark, the similarity of the marks, the proximity of the products, and evidence of actual confusion.

 

VIP’s argument, that expressive works should be subject to a different test for trademark infringement claims because they implicate First Amendment interests, was rejected. While acknowledging that some uses of trademarks in expressive works might be protected by free speech principles, such protection does not necessarily require a categorical rule that exempts expressive works from the likelihood of confusion test. SCOUTS reasoned that the likelihood of confusion test is flexible enough to accommodate First Amendment concerns and that applying a different test for expressive works would undermine the Lanham Act’s purposes and create confusion and unpredictability in trademark law.

 

The Supreme Court also noted that the Rogers test, which the Ninth Circuit adopted from the Second Circuit, was originally designed for a narrow category of cases involving the use of trademarks in the titles of artistic works, such as movies, books, or songs. The Court explained that extending the Rogers test to other types of expressive works, such as VIP’s toy, would create problems of scope and application, and would ignore the fact that the likelihood of confusion test already incorporates some of the factors that the Rogers test considers, such as the artistic relevance of the mark and the evidence of consumer confusion.

 

The Court concluded that the Lanham Act’s standard test for likelihood of confusion applies to all trademark infringement claims that are based on source-identifying marks, regardless of whether the defendant’s use of the mark is expressive or not. However, the Court also recognized that the First Amendment may limit the scope of trademark protection in some cases, and it instructed the lower courts to consider relevant constitutional principles when applying the likelihood of confusion test. SCOTUS noted that such principles may include, for example, the need to avoid chilling protected expression, the value of parody and satire, and the public interest in the free flow of information.

 

SCOTUS vacated the Ninth Circuit’s ruling on trademark infringement and remanded the case for further proceedings based on their opinion. The Court also vacated and remanded the Ninth Circuit’s ruling on trademark dilution, without expressing any view on its merits, because it was based on the same erroneous premise that VIP’s toy was an expressive work entitled to special protection.

 

The Implications of the Ruling

 

The Supreme Court’s ruling in Jack Daniel’s Properties, Inc. v. VIP Products LLC clarifies and harmonizes the law on trademark infringement claims involving expressive works. The ruling reaffirms that the Lanham Act’s standard test for likelihood of confusion applies to all such claims, and it rejects the use of the Rogers test that exempts expressive works from that test. The ruling also recognizes that First Amendment interests may limit trademark protection in some cases and instructs lower courts to balance those interests with trademark interests when applying the likelihood of confusion test.

 

The ruling may have significant implications for both trademark owners and users of trademarks in expressive works. The ruling may make it easier for trademark owners to enforce their rights against unauthorized uses of their marks in expressive works, as they will not have to overcome a threshold test that favors defendants. For users of trademarks in expressive works, such as parodists, satirists, or commentators, this decision could make it harder to defend against infringement claims, as they might have to show that their use of a mark is not likely to cause confusion among consumers—especially if that expressive work is serving as a trademark/source identifier. However, both sides may still invoke First Amendment arguments to support their positions, and lower courts may have to grapple with how to apply constitutional principles in different factual scenarios.

 

Looking beyond the First Amendment / Rogers test analysis, it is possible that the ruling could affect other areas of trademark law, such as fair use, nominative use, or descriptive use defenses, which may be invoked by users of trademarks in expressive works. The ruling could also influence how courts interpret other provisions of the Lanham Act that implicate First Amendment interests, such as false advertising or disparagement claims. None of these potential issues were relevant in this specific case, however.

 

Looking beyond trademark law, this ruling could potentially have broader implications for other areas of intellectual property law that involve expressive works, such as copyright or patent law. It may provide guidance on how to balance intellectual property rights with free speech rights in different contexts. This seems particularly possible when also considering the recent decision in Andy Warhol Foundation for the Visual Arts, Inc. v. Goldsmith et al.

 

Regardless of these possible implications, it is important to note again that this is a narrow ruling. The Court did not rule on the overall merit of the Rogers test, but rather affirmed that the Rogers test is not appropriate where the expressive work is acting as a source identifier.

 

The Supreme Court’s ruling, while narrow, is still a significant trademark decision that continues to clarify trademark infringement claims involving expressive works. This opinion aligns well with the May 18, 2023, copyright law decision in Andy Warhol Foundation for the Visual Arts, Inc. v. Goldsmith et al., which ruled against AWF’s fair use claim and in favor of Goldsmith to protect the original source over the derivative work that the court deemed not sufficiently altered. Here, the Court rejects the Rogers test that exempts expressive works from the Lanham Act’s standard test for likelihood of confusion when used as a source identifier and instructs lower courts to consider relevant constitutional principles when applying that test. The ruling may have important implications for both trademark owners and users of trademarks in expressive works, as well as for other areas of intellectual property law and free speech law.

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