Oral Argument Over Dog Toy Gives the Supreme Court a Lot to Chew On—Distiller Has a [Dog] Bone to Pick with Rogers v. Grimaldi
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The Supreme Court heard oral arguments on Wednesday in Jack Daniel's Properties v. VIP Products LLC, __ U.S. __ (2023) a case that could transform the way courts evaluate the balance of trademark rights with constitutional freedom of expression. Replete with laughs and humorous hypotheticals, the oral argument offered an entertaining tug-of-war over whether a popular pet toymaker's whisky bottle-shaped rubber chew toy infringed Jack Daniel's trademark and trade dress rights. The magnitude of the issues at play, however, is certainly no joke.
Pet toy company VIP sells various dog toys that resemble popular household beverages using puns that reference the messes that are sometimes associated with having pets, including "Mountain Drool" (a squeaker toy shaped like a Mountain Dew bottle) and "Smella-R-Crotches" (a similar toy shaped like a Stella Artois beer bottle). In 2014, VIP released its "Bad Spaniels" toy, a play on the iconic Jack Daniel's whisky bottle. The "Bad Spaniels" label features the face of a complacent spaniel, the maker of "The Old No. 2 on your Tennessee Carpet," as written on the label (replacing Jack Daniel's "Old No. 7 Tennessee Sour Mash Whiskey"). The potty humor continues with a contents indicator at the bottom of the bottle—instead of Jack Daniel's "40% ALC. BY VOL. (80 PROOF)" label, "Bad Spaniels" features a "43% POO BY VOL." and "100% SMELLY" label. The hangtag of the toy features a disclaimer "This product is not affiliated with Jack Daniel's Distillery."
Jack Daniel's—one of the most iconic beverage makers in the world—also offers pet toys and related merchandise under the JACK DANIEL'S brand. Jack Daniel's objected to VIP's "Bad Spaniel's" toy, alleging that VIP infringed and diluted Jack Daniel's trademark and trade dress rights. VIP sought a declaratory judgment of non-infringement and no dilution in the U.S. District Court for the District of Arizona. Jack Daniel's counterclaimed, alleging trademark infringement and dilution under federal and state law. VIP Products, LLC v. Jack Daniel's Properties, Inc., 291 F. Supp. 3d 891 (D. Ariz. 2018). The district court found in favor of Jack Daniel's on both issues, denying VIP's parody defense under the federal dilution statute, 15 U.S.C. § 1125(c)(3)(A). The district court found that the parody exclusion did not apply where a party appropriates a famous trademark as a source designator for the party's own goods, and as such, that the "Bad Spaniels" toy was likely to tarnish the Jack Daniel's trademark and trade dress by referencing Jack Daniel's brand in connection with dog waste. On appeal, the Ninth Circuit reversed-in-part. Although the Ninth Circuit accepted the district court's opinion that the "Bad Spaniel's" toy was likely to mislead consumers under the multifactor likelihood-of-confusion test, the Ninth Circuit vacated the district court's finding of infringement and reversed judgment on dilution. Even if confusingly similar to Jack Daniel's branding, the Ninth Circuit determined that "Bad Spaniels" used Jack Daniel's trademark and trade dress to convey a humorous message, which invoked VIP's First Amendment freedoms under Rogers v. Grimaldi, 875 F.2d 994 (2d Cir. 1989), the longstanding framework that has sought to balance freedom of expression with Lanham Act protection for several decades. Jack Daniel's petitioned the Supreme Court, effectively asking the Justices to overturn Rogers v. Grimaldi as inconsistent with trademark law. Courts in all circuits have adopted the Rogers test to demarcate trademark infringement from artistic expression, including most recently in Hermès Int'l v. Rothschild, No. 1:22-cv-00384-JSR (S.D.N.Y Jan. 14, 2022) (holding that "furry" "MetaBirkin" NFTs infringed Hermes' trademark and did not constitute protected speech under Rogers). But if Rogers is dismantled, the intersection between trademark protection and preserving free speech could become increasingly muddy, as the Justices observed at oral argument.
During oral argument, Jack Daniel's contended that a third party should not be allowed to use another's trademark without permission for any commercial purpose—even for parodic purposes—when there is a likelihood of confusion. "It's not about whether you get the joke," Jack Daniel's counsel said. "You need to get permission if it's a confusing parody," which surveys can determine. Jack Daniel's argued that Rogers (a judicially constructed framework that is not rooted in statutory law) conflicts with the foundations of trademark law by allowing the unauthorized use of another's trademark under the veil of free speech. Justice Kagan seemed skeptical of this argument, questioning Jack Daniel's call to dismantle Rogers when it could more easily attempt to distinguish "Bad Spaniels" from Rogers as a use of Jack Daniel's trademark for commercial gain. Justice Thomas and others tore into the issue of whether Rogers is inconsistent with trademark protection, sniffing out potential loopholes through various hypotheticals that asked whether Rogers can coexist with Jack Daniel's position that "Bad Spaniels" goes beyond the bounds of free speech. Justice Alito pressed further, asking Jack Daniel's whether Lanham Act protection amounts to an automatic block against any use of the protected matter in the course of free speech under the First Amendment.
The U.S. Government—as amicus curiae in support of Jack Daniel's—offered a different reason to overturn Rogers. The Government contended that parody should still be available as a defense to infringement (and that the district court erred by not taking parody into account), but that Rogers should not allow courts to bypass the likelihood of confusion analysis. Justice Kagan pushed back on this idea, noting that Rogers was designed to address circumstances where the likelihood of confusion factors do not need to be invoked in the first place.
The Justices assessed VIP's arguments with equal interest, questioning whether it is possible for an expressive work to infringe, and whether the likelihood of confusion analysis is the best approach to determine this. According to VIP, the confusion analysis (and the expensive confusion surveys that are often used to determine whether confusion is likely) is the "wrong tool for the job" because it is unnecessary (in line with Rogers) and does not provide room for parodic speech, which requires a high level of similarity for the joke to be understood. Both VIP and Jack Daniel's agreed that Rogers is imperfect, and that nearly all forms of creative expression constitute commercial use to some extent, theoretically making any form of unauthorized use vulnerable to infringement under the Lanham Act, even if parodic in nature. But the question remains—what framework is best for balancing trademark protection with creative (and humorous) expression to protect both competing interests?
The Supreme Court is expected to issue its opinion in June 2023.
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