On June 8, 2023, the Supreme Court in a unanimous decision held that a trademark claim concerning “a squeaky, chewable dog toy designed to look like a bottle of Jack Daniels whiskey” which, as a play on words, turns the words “Jack Daniels” into “Bad Spaniels” and the descriptive phrase “Old No. 7 Brand Tennessee Sour Mash Whiskey” into “The Old No. 2 On Your Tennessee Carpet” does not receive special First Amendment treatment where the accused infringer used the trademarks at issue to designate the source of its own goods and that, with respect to a Lanham Act dilution by tarnishment claim, “[t]he use of a mark does not count as noncommercial just because it parodies, or otherwise comments on, another’s products.”[1]
The Case In the District Court , Ninth Circuit and Oral Argument in the Supreme Court
Jack Daniels Properties, Inc. (“Jack Daniels”), which owns registered trademarks for “JACK DANIELS”, “OLD NO. 7”, the arched logo, the stylized label and distinctive bottle, sent a cease and desist letter demanding that VIP Products LLC (“VIP”) stop selling its “Bad Spaniels” chewable dog toy featuring the descriptive phrase “The Old No. 2 On Your Tennessee Carpet” referencing dog urine because it infringed and tarnished its famous trademarks. VIP brought a declaratory judgment action seeking a determination that its dog toy neither infringed nor diluted the Jack Daniels Trademarks. Jack Daniels asserted counterclaims for trademark infringement and dilution. VIP moved for summary judgment claiming that its dog toy was an “expressive work” which was protected under the First Amendment by virtue of the test set forth in Rogers v, Grimaldi,[2] which requires dismissal of an infringement claim unless the trademark owner can show that the challenged use “has no artistic relevance to the underlying work” or that it “explicitly misleads as to the source or the content of the work”[3] and that Jack Daniel’s dilution claim should be dismissed because the Bad Spaniels toy was a parody of Jack Daniels and therefore constituted “fair use” of Jack Daniels famous marks. Jack Daniels argued the look-alike dog toy could confuse consumers and that its reference to “the Old No. 2 on your Tennessee carpet” tarnishes the Jack Daniels trademark. The District Court rejected VIP’s contentions and enjoined VIP from manufacturing and selling its Bad Spaniels dog toy holding that when “another’s trademark is used for source identification,” the Rogers test does not apply and the test is whether the use is likely to cause confusion. The District Court also held that the fair use exclusion for parodies under the Lanham Act’s dilution provision did not apply where the use at issue does not serve as “a designation of source for the [alleged diluter’s] own goods.” VIP appealed to the Ninth Circuit Court of Appeals and the Ninth Circuit held that VIP’s dog toy was a communication of a humorous message and required heightened scrutiny to ensure that trademark protection for Jack Daniels did not intrude upon VIP’s First Amendment rights. With regard to dilution, the Ninth Circuit held that VIP was protected by the fair use exception for noncommercial uses. The Court of Appeals returned the case to the District Court to decide whether Jack Daniels could show pursuant to Rogers v, Grimaldi that the challenged use “has no artistic relevance to the underlying work” or that it “explicitly misleads as to the source or the content of the work.” On remand, the District Court found that Jack Daniels could not satisfy either test and granted summary judgment to VIP. Jack Daniels’ certiorari petition was granted and argument was held on March 22, 2023.
The Supreme Court had an energetic oral argument with divergent views and questions advanced by the Justices. Justice Elena Kagan, who authored the majority opinion, suggested the Bad Spaniels dog toy was obviously a commercial product and said “[t]hat’s not a First Amendment problem.”[4] Justice Thomas asked a number of hypotheticals and questioned whether Rogers v. Grimaldi is inconsistent with traditional Lanham Act trademark protection.[5] When counsel for VIP argued that the dog toy was a parody that poked fun at a brand which “took itself too seriously,” Justice Kagan responded: “You make fun of a lot of marks: Doggie Walker, Dos Perros, Smella Arpaw, Canine Cola, Mountain Drool. Are all of these companies taking themselves too seriously?”[6] Counsel for VIP answered in the affirmative. Justice Alito, on the other hand, questioned whether any reasonable consumer would assume the Bad Spaniels toy, even with its references to dog excrement, would have anything to do with Jack Daniels.[7] Justice Brown Jackson questioned whether the Rogers v. Grimaldi test was too permissive of “expressive works” that cause confusion.[8] Counsel for Jack Daniels advocated elimination of the Rogers v. Grimaldi test. Justice Sotomayor expressed reluctance stating “I have some hesitation doing away with the Rogers test” which protects First Amendment rights.[9]
The Supreme Court’s June 8, 2023 Unanimous Decision
In its opinion, the Supreme Court stated that the Court initially needed to decide whether “the company [should] have had to satisfy the Rogers threshold test before the case could proceed to the Lanham Act’s likelihood-of-confusion inquiry” and noted that the parties either attack or defend the Second Circuit precedent.[10] The Supreme Court declined to answer the question and noted “[w]ithout deciding whether Rogers has merit in other contexts, we hold that it does not when an alleged infringer uses a trademark in the way the Lanham Act more cares about: as a designation of source for the infringer’s own goods.” The Supreme Court recounted the facts and reasoning underlying Rogers that “the titles of ‘artistic works,’ like the works themselves, have an ‘expressive element’ implicating ‘First Amendment values.’[11] The Supreme Court also noted that “[o]ver the decades, the lower courts adopting Rogers have confined it to similar cases, in which a trademark is used not to designate a work’s source, but solely to perform some other expressive function” and that “[t]he same courts, though, routinely conduct likelihood-of-confusion analysis, without mentioning Rogers when trademarks are used as trademarks – i.e., to designate source.”[12] The Supreme Court noted that Rogers was “a cabined doctrine” which “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.”[13]
The Supreme Court held that “the District Court correctly held that ‘VIP uses its Bad Spaniels trademark and trade dress as source identifiers of its dog toy” and that “VIP conceded that point below” by alleging in its complaint that VIP “own[s]’ and ‘use[s]’ the ‘Bad Spaniels’ trademark and trade dress for its durable rubber squeaky novelty dog toy.’”[14] While declining to apply the Rogers test, the Court noted that “a trademark’s expressive message -- particularly a parodic one, as VIP asserts – may properly figure in assessing the likelihood of confusion.”[15] The Court remanded the case to the District Court to answer the question as to “whether the [use of] the Bad Spaniels marks are likely to cause confusion.”[16]
Regarding the dilution by tarnishment claim asserted by Jack Daniels, the Supreme Court held that the Ninth Circuit erred by concluding that VIP’s use is noncommercial because it parodies and “convey[s] a humorous message” about Jack Daniels.[17] The Supreme Court noted that Section 1125(c)(3)(A)(ii)’s “fair use exclusion has its own exclusion: It does not apply when the use is ‘as a designation of source for the person’s own goods or services.’ §1125(c)(3)(A). In that event, no parody, criticism, or commentary will rescue the alleged dilutor. It will be subject to liability regardless.”[18] The Court noted that “[t]he District Court had rightly concluded that because VIP used the challenged marks as source identifiers, it could not benefit from the fair-use exclusion for parody” and while the Circuit Court’s erroneous construction “negated Congress’s judgment about when – and when not – parody (and criticism and commentary) is excluded from dilution liability.”[19] The Supreme Court emphasized that its opinion was narrow and that “[o]n infringement, we hold only that Rogers does not apply when the challenged use of a mark is as a mark” and [o]n dilution, we hold only that the noncommercial exclusion does not shield parody or other commentary when its use of a mark is similarly source-identifying.”[20]
The Concurring Opinions
Justice Sotomayor concurred and was joined by Justice Alito. The concurrence was written separately “to emphasize that in the context of parodies and potentially other uses implicating First Amendment concerns, courts should treat the results of surveys with particular caution” because “[s]urvey answers may reflect a mistaken belief among some survey respondents that all parodies require permission from the owner of the parodied mark.”[21] As a result, Judge Sotomayor noted: “Courts should thus ensure surveys do not completely displace other likelihood-of-confusion factors, which may more accurately track the experiences of actual consumers in the marketplace. Courts should also be attentive to ways in which surveys may artificially prompt such confusion about the law or fail to sufficiently control for it.” This concurrence suggests that parties should not rely only upon survey evidence alone but should consider and weigh each of the likelihood of confusion factors.
Justice Gorsuch authored a separate concurrence and was joined by Justices Thomas and Barrett. The concurrence was written “only to underscore that lower courts should handle Rogers v, Grimaldi, 875 F.2d 994 (CA2 1989), with care.” The concurrence noted “it is not entirely clear where the Rogers test comes from” and “it is not obvious that Rogers is correct in all of its particulars -- certainly, the Solicitor General raises serious questions about the decision.” The decision cautioned: “All this remains for resolution another day, ante, at 13, and lower courts should be attuned to that fact.”[22] As a result, three Justices have indicated serious reservations about the future of Rogers v, Grimaldi.
Summary:
The Supreme Court’s decision clearly prohibits the application of Rogers in cases where the accused infringer used the trademarks at issue to designate the source of its own goods. Regarding dilution claims under the Lanham Act, the decision makes plain that the exception under §1125(c)(3)(A) does not apply to parodies where the use is “as a designation of source for the person’s own goods or services” and “[t]he use of a mark does not count as noncommercial just because it parodies, or otherwise comments on, another’s products.”[23] The two concurrences suggest that the Supreme Court is skeptical about the use of confusion surveys in cases involving trademark parody cases and whether the Rogers test “is correct in all of its particulars.”[24] As a result, while the decision is narrow, the concurrences foreshadow other possible issues that may be addressed by the Supreme Court in future Lanham Act cases.
FOOTNOTES
[1] Jack Daniel’s Properties, Inc. v. VIP Products LLC, 599 U.S. ___ (2023) (slip op., at 2).
[2] Rogers v. Grimaldi, 875 F. 2d 994, 999 (2d Cir, 1989).
[3] Id.
[4] Transcript of Oral Argument at 82-83, Jack Daniel’s Properties, Inc., v. VIP Products LLC, 559 U.S. __ (2023) (No. 22-148).
[5] Id. at 5-7, 90-91.
[6] Id. at 66.
[7] Id. at 28-33.
[8] Id. at 64-65, 86-87.
[9] Id. at 16.
[10] 599 U.S. ___ (2023) (slip op., at 10).
[11] Id. at 11(citing Rogers v. Grimaldi, 875 F. 2d at 998).
[12] 599 U.S. ___ (2023) (slip op., at 11-12).
[13] 599 U.S. ___ (2023) (slip op., at 13) (quoting S. Dogan & M. Lemley, “Grounding Trademark Law Through Trademark Use,” 92 Iowa L. Rev. 1669, 1683-1684 n.58 (2007)).
[14] 599 U.S. ___ (2023) (slip op., at 17) (See App. to Pet. for Cert. 105a. at 3, 11.)
[15] 599 U.S. ___ (2023) (slip op., at 18).
[17] VIP Prods. LLC v. Jack Daniel’s Props., Inc., 953 F. 3d, 1170, 1175-1176 (2020).
[18] 599 U.S. ___ (2023) (slip op., at 19); 15 U.S.C. §1125(c)(3)(A)(ii).
[19] 599 U.S. ___ (2023) (slip op., at 20) (See App. to Pet. for Cert. 105a at 8–9, 17–18.)
[20] 599 U.S. ___ (2023) (slip op., at 20)
[21] 599 U.S. ___ (2023) (Sotomayor, J. concurring) (slip op. concurrence., at 1).
[22] 599 U.S. ___ (2023) (Gorsuch, J. concurring) (slip op. concurrence., at 1).
[23] 599 U.S. ___ (2023) (slip op., at 2, 5).
[24] 599 U.S. ___ (2023) (Gorsuch, J. concurring) (slip op. concurrence., at 1).