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Jack Daniel's Properties, Inc. v. VIP Products LLC

VIP Products creates a squeaky, chewable dog toy resembling Jack Daniel's whisky bottle. The words "Jack Daniel's" on the toy became "Bad Spaniels." "Old No. 7 Brand Tennessee Sour Mash Whisky" is transformed into "The Old No. 2 On Your Tennessee Carpet." Jack Daniels, which holds trademarks in the iconic Jack Daniel's bottle and many of the phrases and visuals on its label, asked that VIP cease selling it.

VIP filed a declaratory judgment, claiming that Bad Spaniels did not violate or dilute Jack Daniel's trademarks.

Jack Daniel's filed a countersuit for Trademark infringement under the federal Lanham Act's likelihood-of-confusion framework and Trademark dilution by tarnishment, damaging Jack Daniel's mark by negatively associating it with dog poop.

At summary judgment, VIP argued that Jack Daniel's infringement claim failed under the so-called Rogers test—a threshold test developed by the Second Circuit and designed to protect First Amendment interests in the trademark context.

The District Court rejected VIP's case on the finding that consumers were likely to be confused about the source of the Bad Spaniels toy and that the toy's negative associations with dog excrement (e.g., "The Old No. 2") would harm Jack Daniel's reputation. The District Court held that the First Amendment did not protect VIP's use of the trademarked elements, diluted Jack Daniel's trademarks, and enjoined VIP from selling the toy.

VIP appealed before the Ninth Circuit, which overruled the District Court and held that a more demanding test was required to dismiss the dog toy as an expressive work covered by the First Amendment. The Ninth Circuit found that the Rogers test applied to the infringement claim and remanded for the district court to determine whether either prong of that test was satisfied.

The ninth circuit reversed the finding of dilution by tarnishment, invoking the Trademark Dilution Revision Act's exception for "non-commercial use of a mark".

The Supreme Court reversed the second circuit and held that:

1. When an alleged infringer uses a trademark as a designation of source for the infringer's goods, the Rogers test does not apply.

(a) Consumer confusion about the source—trademark law's cardinal sin—is most likely to arise when someone uses another's trademark as a trademark. In such cases, Rogers has no proper application. Nor does that result in change because using a mark has other expressive content.

Under the Ninth Circuit's approach, Bad Spaniels was automatically entitled to Rogers' protection because it "communicate[d] a humorous message." In that view, few trademark cases would ever get to the likelihood-of-confusion analysis. And the Ninth Circuit was mistaken to believe that the First Amendment demanded such a result. The First Amendment does not demand a threshold inquiry when a mark is used as a source identifier.

(b) VIP conceded that it used the Bad Spaniels trademark and trade dress as source identifiers. And VIP has said and done more in the same direction with respect to Bad Spaniels and other similar products. The only question remains whether the Bad Spaniels trademarks will likely cause confusion. Although VIP's effort to parody Jack Daniel's does not justify using the Rogers test, it may make a difference in the standard trademark analysis. This Court remands that issue to the courts below.

2. The Lanham Act's exclusion from dilution liability for "any non-commercial use of a mark" does not shield parody, criticism, or commentary when an alleged diluter uses a mark as a designation of source for its goods. Parody is exempt from liability only if not used to designate a source. The Ninth Circuit's expansive view of the non-commercial use exclusion—that parody is always exempt, regardless of whether it designates source—effectively nullifies Congress's express limit on the fair-use exclusion for parody.


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