Case Summary and Outcome

The Supreme Court of the United States held that the parody of a product is not always protected by the right to freedom of expression and that it might be, instead, regulated by trademark law. In this case, VIP Products made a chewable dog toy designed to look like a bottle of Jack Daniel’s whiskey. Jack Daniel’s Properties requested VIP to stop selling the product because consumers were likely to be confused about the source of the toy and because the toy had negative associations with dog excrement that would harm Jack Daniel’s reputation. Before a District Court, Jack Daniels’ claim prevailed, but the United States Court of Appeals for the Ninth Circuit reversed the judgment, as it considered that the toy was a parody of Jack Daniel’s and an expressive artistic work that conveyed a humorous message, thus, protected by the First Amendment. However, the Supreme Court rejected this conclusion and affirmed that parody cannot be a shield against trademark claims when the mark is used as source-identifying —i.e. when the accused infringer used a trademark to designate the source of its own goods. The Supreme Court vacated the judgment and remanded it for further proceedings since it considered that lower courts should be the ones delivering the final decision on the application of trademark law. 

Facts

VIP Products is a dog toy company. It made a squeaky, chewable dog toy designed to look like a bottle of Jack Daniel’s whiskey, with a few humoristic differences. For example, on the toy, the words “Old No. 7 Brand Tennessee Sour Mash Whiskey” turn into “The Old No. 2 On Your Tennessee Carpet.” 

Jack Daniel’s Properties, which owns trademarks in the distinctive Jack Daniel’s bottle, and in many of the words and graphics on its label, sent VIP a letter requesting it to stop selling the product. VIP responded by filing a lawsuit, seeking a declaratory judgment that their toy neither infringed nor diluted Jack Daniel’s trademarks. Jack Daniel’s counterclaimed for both trademark infringement and trademark dilution.

The United States District Court for the District of Arizona considered that VIP had used Jack Daniel’s features as trademarks —i.e., to identify the source of its own products. In this sense, it found that consumers were likely to be confused about the source of the toy. It also held that the toy’s negative associations with dog excrement (“The Old No. 2”) would harm Jack Daniel’s reputation. Hence, Jack Daniels’ claim prevailed.

However, the United States Court of Appeals for the Ninth Circuit reversed the judgment because it concluded that the toy was a parody of Jack Daniel’s and an expressive artistic work, protected by the First Amendment (freedom of expression). Additionally, it ruled that the case fell under the exception of a “non-commercial use”, which shielded VIP from liability because it parodies and comments humorously on Jack Daniel’s. For the judges, the use of a mark could be “non-commercial” even if used to sell a product. The Supreme Court granted certiorari to consider the matter.

Decision Overview

Justice Kagan delivered the opinion for the Supreme Court of the United States. The main issue before the Court was whether a satirical dog toy that resembled a bottle of Jack Daniel’s whiskey could trigger an infringement and a dilution claim under trademark law. The Court had to determine whether VIP’s product was protected under the First Amendment—due to its satirical elements—, or if it should pass a test on the likelihood to cause confusion regarding the origin of the product.

The plaintiff, Jack Daniel’s Properties, alleged that VIP Products led consumers to think that Jack Daniel’s had created, or was otherwise responsible for the dog toy—thus infringing on the company’s trademark—, and that it associated the whiskey with dog excrement, diluting the trademark. Hence, since the dog toy is likely to cause confusion, it violated the Lanham Act, the core federal trademark statute.  

The defendant argued that Jack Daniel’s claim failed under the so-called Rogers test—a threshold developed by the United States Court of Appeals for the Second Circuit in Rogers v. Grimaldi, 875 F. 2d 994, 999 (CA2 1989). The test was designed to protect First Amendment interests in the trademark context. It states that when expressive works are involved, an infringement claim should be dismissed unless the complainant can show one of two things: that the challenged use of a mark has no artistic relevance to the underlying work or that it explicitly misleads as to the source or the content of the work. VIP Products sustained that the toy was an expressive work and that Jack Daniel’s could not make either of those two showings. Consequently, the “likelihood of confusion” standard for infringement claims became irrelevant. As for the dilution claim, VIP stated that the toy was a parody of Jack Daniel’s, which entailed a fair use of the famous mark.

The Court explained that in a typical infringement case under the Lanham Act, the owner of a mark sues someone using a mark that closely resembles its own; in those cases, judges must decide whether the defendant’s use is “likely to cause confusion, or to cause mistake, or to deceive.” [p. 4] The most common type of confusion regards the source of the product or service, as stated in Moseley v. Secret Catalogue, Inc., 537 U. S. 418, 428 (2003). The Rogers rule, for its part, “offers an escape from the likelihood-of-confusion inquiry and a shortcut to dismissal.” [p. 15] However, recalling the cases Tommy Hilfiger Licensing, Inc. v. Nature Labs, LLC, 221 F. Supp. 2d 410, 412 (SDNY 2002) and Harley-Davidson, Inc. v. Grottanelli, 164 F. 3d 806, 812–813 (1999), the Supreme Court affirmed that “the Rogers test has applied only to cases involving non-trademark uses—or otherwise said, cases in which the defendant has used the mark at issue in a non-source-identifying way.” [p. 13] The Court added that when the use is, at least in part, for source identification, or when the defendant may be “trading on the good will of the trademark owner to market its own goods, Rogers has no proper role, even if the defendant is also making an expressive comment, including a parody of a different product.” [p. 14] In the Court’s own words: “Whatever first amendment rights you may have in calling the brew you make in your bathtub ‘Pepsi’ are outweighed by the buyer’s interest in not being fooled into buying it.” [p. 16] In sum, the Court affirmed that “the trademark law generally prevails over the First Amendment when another’s trademark (or a confusingly similar mark) is used without permission as a means of source identification.” [p. 17]  

As for trademark dilution, the Court said that it occurs when an association arises from the similarity between two marks—one of them famous—that may “harm the reputation of the famous mark.” [p. 4] The Court added that there are activities that are not actionable as dilution, for example, the “non-commercial use” of a mark, or its “fair use”, which entails “parodying, criticizing, or commenting upon the famous mark owner or its goods.” [p. 5] However, the Court also clarified that a defendant cannot get the exclusion 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.” [p. 5] Basically, “the exclusion does not apply if the defendant uses the similar mark as a mark.” [p. 5]

In this case, the Supreme Court held that VIP used the marks derived from Jack Daniel’s as a designation of source for the infringer’s own goods. Indeed, VIP conceded that the mark and dress are used to identify and distinguish their goods and to indicate their source. Consequently, in the Court’s opinion, the Rogers test has no merits on this type of claims and the result depended on the likelihood of confusion. The Court remanded that issue to the District Court. Still, it gave some guidelines. For example, the Court acknowledged here that “the expressive aspect of the toy that the Ninth Circuit highlighted is indeed relevant, because consumers are not so likely to think that the maker of a mocked product is itself doing the mocking.” [p. 10] It also held that to succeed in this type of claims, “the parody must also create contrasts, so that its message of ridicule or pointed humor comes clear. And once that is done (if that is done), a parody is not often likely to create confusion. Self-deprecation is one thing; self-mockery far less ordinary.” [p. 18] So, the Court concluded that “although VIP’s effort to ridicule Jack Daniel’s does not justify using of the Rogers test, it may make a difference in the standard trademark analysis” [p. 18], but it deferred this decision to lower courts. 

As for the trademark dilution claim, the Court considered that the “wide scope of the non-commercial use exclusion cannot include, as the Ninth Circuit thought, every parody or humorous commentary.” [p. 19] Instead, the Supreme Court held that “parody (and criticism and commentary, humorous or otherwise) is exempt from liability only if not used to designate source.” [p. 20] This was not the case according to the Supreme Court. But once again, the final decision was remanded to the courts below. The lack of a final decision was recognized by the judges themselves in their last paragraph of the judgment: “Today’s opinion is narrow. We do not decide whether the Rogers test is ever appropriate, or how far the ‘non-commercial use’ exclusion goes. On infringement, we hold only that Rogers does not apply when the challenged use of a mark is as a mark. On dilution, we hold only that the non-commercial exclusion does not shield parody or other commentary when its use of a mark is similarly source-identifying.” [p. 20] In conclusion, the Court vacated the judgment and remanded for further proceedings. 

There were concurring opinions from Justices Sotomayor and Gorsuch. Sotomayor, together with Justice Alito who joined the concurrent opinion, focused on evidence, and emphasized that in the context of parodies and other uses implicating First Amendment concerns, courts should treat the results of surveys with particular caution, as merely one piece of the multifaceted likelihood of confusion analysis. Justice Gorsuch, together with Justice Thomas and Justice Barrett who joined the concurrent opinion, simply mentioned that lower courts should handle the Rogers test with care.