Not all parodies are protected by the First Amendment. The Supreme Court, in its June 8, 2023, opinion in Jack Daniel’s v. VIP Products, unanimously held that VIP Products’ dog toy, which had the same bottle shape and used much of the same label design featured in Jack Daniel’s whiskey bottle and label–both of which are trademarked–was not a fair use parody and, therefore, constituted both infringement and dilution of Jack Daniel’s trademarks.
VIP Products created a plastic, squeaky chew toy in the shape of Jack Daniel’s iconic bottle, but with the famous label altered. Instead of “Jack Daniel’s,” the toy reads “Bad Spaniels,” and the label’s “Old No. 7,” and “Tennessee Sour Mash Whiskey,” are replaced with “The Old No. 2 on your Tennessee Carpet.” Moreover, the dog toy substitutes the promise of 40% alcohol by volume with “43% poo,” and “100% smelly.” As noted in our previous blog post, after receiving a cease and desist letter from Jack Daniel’s, VIP Products sued them in Arizona’s Federal District Court for a declaratory judgment that its “Bad Spaniels,” dog toy neither infringed nor diluted Jack Daniel’s trademarks. Jack Daniel’s then countersued the toy company for claims of trademark infringement and dilution for its “parody” of the famous branding.
A trademark is a type of intellectual property that “tells the public who is responsible for a product.” The federal Trademark Act (often called the Lanham Act) defines a trademark as “any word, name, symbol, or device, or any combination thereof,” that a person or company uses “to identify and distinguish his or her goods . . . from those manufactured or sold by others and to indicate the source of the goods.” The Lanham Act allows trademark owners to sue for infringement when someone else tries to use their trademark for their own benefit. In such cases, the trademark owner can allege the mark’s use is causing a “likelihood of confusion” to consumers regarding the source of a product or service.
However, there are occasions when the First Amendment requires a balance between free speech rights and a trademark owner’s control over their intellectual property. Courts use a test from the case Rogers v. Grimaldi to address this balance. Defendants in an infringement case, like VIP, can argue that the test from this case, the Rogers test, applies to their expressive works and that the infringement claim should be dismissed unless the trademark owner can show that the use of the mark either: (1) has no artistic relevance to the underlying work; or (2) the title of the work explicitly misleads as to the source or the content of the work.
The Lanham Act also provides a cause of action called “dilution” for famous marks–like the iconic Jack Daniel’s bottle and labels. Dilution occurs when someone uses a famous trademark in a way that may harm its reputation. However, the Lanham Act protects certain uses of trademarks that would otherwise be considered dilution–such as noncommercial use, fair use or for parody. In this, VIP initially sought a declaration from an Arizona District Court that it was not infringing Jack Daniel’s marks after receiving a cease and desist letter from the whiskey maker. Jack Daniel’s countersued VIP for both trademark infringement and dilution. The District Court ruled in favor of Jack Daniel’s, stating that VIP’s humorous use of Jack Daniel’s trademark did not receive special First Amendment protection. The court held that in an infringement claim, where another’s trademark is used for “source identification,” likelihood of confusion is the primary concern. Therefore, although the court did not apply the Rogers test, it found that consumers would likely be confused about the origin of the toy. Using similar reasoning for the dilution claim, the court held that neither the noncommercial nor fair use exception would apply and that the toy may lead the public to associate the Jack Daniel’s brand with dog poop, which could harm its reputation and “dilute” the trademark.
VIP appealed the decision, and the Ninth Circuit reversed the District Court’s ruling. On the dilution claim, it held that VIP’s use of the marks falls under the “noncommercial use” statutory exception because it was a parody. On the infringement issue, the Ninth Circuit wanted the District Court to apply the two-part Rogers test and sent the case back to the District Court for that purpose. When Jack Daniel’s could not satisfy either part of the Rogers test, the District Court granted summary judgment for VIP. The Ninth Circuit affirmed this decision, prompting Jack Daniel’s to seek review in the Supreme Court.
In a 9-0 decision, the Supreme Court vacated and remanded the Ninth Circuit’s decision. The Court held that where the mark is used as source identifier (i.e., the parody mark being used as a branding source for VIP’s goods) the Rogers test does not apply, even if the work is “expressive” and conveys a parody message.
Because VIP Products stated in their complaint that it owned and used “Bad Spaniels” trademark and trade dress, it conceded that it was using the branding to identify the toy’s source as VIP Products, thus benefiting from Jack Daniel’s trademark and trade dress. Because of this source-identifying use, the free speech protection of the Rogers test did not apply. However, the Court clarified that a product’s expressive nature can still affect a likelihood of confusion analysis and remanded the case to determine whether consumers would think that the dog toy is a product of Jack Daniel’s.
Turning to the trademark dilution claim, the Court held that the Lanham Act’s protection for noncommercial use, “does not shield parody, criticism or commentary when an alleged diluter uses a mark as a designation of source for its own goods.” The Lanham Act limits the liability of certain fair uses, including, “parodying, criticizing or commenting upon the famous mark owner.” However, the fair use exclusion does not apply if the defendant uses the similar mark “as a designation of source for the [defendant’s] own goods.” Reasoning that Congress only wanted to exclude parody from dilution liability when it is not used to designate source, the Supreme Court refused to extend the noncommercial use exception to parody when a mark is used as a mark. Since VIP Products conceded that it used the “Bad Spaniels” trademark and trade dress to designate source, it was not shielded from dilution liability under the Lanham Act’s noncommercial use exclusion.
The Supreme Court held that despite its humorous intent, VIP committed the “cardinal sin” of the Lanham Act—creating potential consumer confusion as to the source of a particular product.
The use of trademarks as an identifying source does not render heightened artistic protection, despite certain exceptions granted for “expressive” re-workings of marks. As described by the Court, “[a] defendant cannot get its benefit—even if engaging in parody, criticism or commentary—when using the similar-looking mark ‘as a designation of source for the [defendant’s] own goods.’ In other words, the exclusion does not apply if the defendant uses the similar mark as a mark.” The Supreme Court did not, however, opine on the use of the Rogers test in situations where the mark is not used as a source identifier. The Court leaves us with this going forward: “It is no coincidence that both our holdings turn on whether the use of a mark is serving a source-designation function. The Lanham Act makes that fact crucial, in its effort to ensure that consumers can tell where goods come from.”
The Supreme Court’s decision clarified that using someone else’s trademark as a trademark for your own products is off-limits, even if it is a parody. At the same time, the court’s holding was narrow in scope and did not speak on other uses. Certainly, this decision does not eliminate protections for all expressive uses of a trademark, and those alleging infringement must show that their mark is being used for a forbidden purpose.
Trademark infringement matters can be complex and typically require a detailed analysis of the law and facts. If you are concerned that your trademark has been infringed or if you need to defend against such a claim, consult with an experienced intellectual property attorney to ensure your rights are protected.
Carlianna Dengel is admitted to practice law in New York and California.