Parody vs. Trademark: The Jack Daniel's vs. Bad Spaniels Case

This case involves a dog toy that resembles a bottle of Jack Daniel's whiskey. The toy, Bad Spaniels, uses parody and humor to change the whiskey's branding. Jack Daniel's Properties, the petitioner, claimed that Bad Spaniels infringed and diluted their trademarks. The Court of Appeals disagreed, citing First Amendment protection for expressive works. However, this conclusion was rejected and argued that the use of trademarks to designate the source of goods falls within trademark law and does not receive special First Amendment protection. Parody or commentary on another's products does not automatically make the use noncommercial.

A trademark is any word, name, symbol, or device used to identify and distinguish goods and indicate their source. It benefits consumers and producers by allowing customers to choose products they want and avoid those they do not while also ensuring producers can reap the rewards of their good reputation.

The Lanham Act establishes a voluntary registration system to protect marks. Mark owners can apply to have their marks registered on a federal register as long as the mark identifies and distinguishes goods. Registration provides benefits in infringement litigation, but even unregistered trademarks can be used in commerce and enforced against infringers. The Lanham Act also includes provisions for trademark infringement and the dilution of famous marks, which can succeed without the likelihood of confusion. Exclusions exist for the noncommercial use of a mark and fair use in parody, criticism, or commentary, as long as the similar mark is not used as designating source for the defendant's goods.

A Jack Daniel's Old No. 7 Tennessee Sour Mash Whiskey bottle has several registered trademarks – the bottle design, logo, and label. VIP, a dog toy company, sells a "Silly Squeakers" product line that parodies popular beverage brands. They have registered trademarks for names like Dos Perros, Smella Arpaw, and Doggie Walker. In 2014, VIP added the Bad Spaniels toy, which looks like a Jack Daniel's bottle. It has a similar label and font, with the words "Bad Spaniels" and a spaniel image. The toy is packaged with a disclaimer and product logos for the Silly Squeakers line and Bad Spaniels toy.

After Bad Spaniels hit the market, Jack Daniel's demanded that VIP stop selling the product. VIP responded with a lawsuit seeking a declaratory judgment that Bad Spaniels did not infringe on Jack Daniel's trademarks. Jack Daniel's counterclaimed for trademark infringement and dilution. VIP argued that the Rogers test should apply, but the District Court disagreed. The court found for Jack Daniel's at a bench trial, but the Ninth Circuit disagreed. The case is now before the Supreme Court.

The Ninth Circuit reversed the District Court's decision, ruling that the infringement claim should be subject to the Rogers test because Bad Spaniels is an expressive work communicating a humorous message. The Court of Appeals returned the case to the District Court to determine if Jack Daniel's could satisfy the Rogers test. The Ninth Circuit also ruled for VIP on the dilution claim, finding that the exclusion for "noncommercial use" protected VIP from liability. On remand, the District Court granted summary judgment to VIP on infringement, which Jack Daniel's appealed. The Supreme Court granted certiorari to review the Court of Appeals' rulings on infringement and dilution.

The first question is whether Jack Daniel's had to satisfy the Rogers test before proceeding to the likelihood-of-confusion inquiry. The Rogers test is two-step to test “whether the use of another's trademark in an expressive work has some ‘artistic relevance’ to the underlying work and whether the use "explicitly misleads as to the source or the content of the work.’” The court held that the Rogers test does not apply when an alleged infringer uses a trademark as a source designation for their goods. VIP used the marks to parody Jack Daniel's, which affects the assessment of confusion. The court reasoned that titles of artistic works have an expressive element but pose a slight risk of confusing consumers about the source or content of the work.

Lower courts have confined the application of the Rogers test to cases where a trademark is used for expressive purposes rather than as a source identifier. For example, in the case of Mattel v. MCA Records, the Ninth Circuit applied the Rogers test when a band used the Barbie name in their song. Similarly, the Eleventh Circuit dismissed a suit under the Rogers test when a sports artist depicted trademarked football uniforms for historical purposes.

The same courts routinely conduct likelihood-of-confusion analysis without mentioning the Rogers test when trademarks are used to designate a source. The Second Circuit has made it clear that the Rogers test does not apply in this context. For example, the court held that an offshoot political group's use of the trademark "United We Stand America" did not qualify for Rogers’ protection because it was a source identifier. Similarly, the Second Circuit rejected a motorcycle mechanic's view that his changed version of Harley Davidson's logo was an expressive parody entitled to Rogers' protection. The court acknowledged the humorous message conveyed by the adapted logo but considered it a quintessential trademark used to brand the mechanic's business with images like Harley-Davidson's.

The Rogers test has always been limited to cases of "non-trademark uses" where the mark is not used to indicate the source of the product. In a case involving pet perfumes named Timmy Holedigger, the court declined to apply the Rogers test because the defendant was using the mark for source identification and potentially trading on the trademark owner's goodwill. Even if the defendant was also making an expressive comment or parodying a different product, they were still making trademark use of another's mark. Additionally, they had to meet the usual likelihood of confusion standard for infringement.

The Lanham Act defines trademarks as source identifiers that distinguish goods from those made or sold by others. The cardinal sin under trademark law is to confuse consumers about the source of goods. This confusion will likely occur when someone uses another's trademark as a source identifier. The Rogers test, which offers an escape from the likelihood-of-confusion inquiry, has no proper application. The Ninth Circuit's view that expressive content automatically entitles a mark to Rogers' protection is wrong. Trademarks often have expressive content, but that does not mean they should automatically be protected under the Rogers test.

The Ninth Circuit was mistaken in believing that the First Amendment required trademark law to account for the public's interest in free expression. Trademark rights play well with the First Amendment when a trademark is a source identifier, as protecting consumers and trademark owners from confusion is a substantial interest. The trademark law generally prevails over the First Amendment when another's trademark is used without permission for source identification. In these cases, the likelihood-of-confusion inquiry is enough to address the interest in free expression.

The District Court correctly held that “VIP uses its Bad Spaniels trademark and trade dress as source identifiers of its dog toy.” See App. to Pet. for Cert. 105a. VIP conceded that point below. Here, VIP alleged that it both “own[s] and “use[s]” the “‘Bad Spaniels’ trademark and trade dress for its durable rubber squeaky novelty dog toy.” App. 3, 11. The company thus represented in this very suit that the mark and dress, although not registered, are used to “identify and distinguish [VIP's] goods” and to “indicate [their] source.” § 1127. Registration of marks is optional. The District Court correctly held that VIP uses the "Bad Spaniels" trademark and trade dress as source identifiers for its dog toy. VIP has consistently argued in court that it owns and uses the mark and dress to identify and distinguish its goods. So, the only question is whether the Bad Spaniels marks are likely to confuse consumers. While a parody can influence the likelihood of confusion analysis, VIP's effort to ridicule Jack Daniel's does not justify using the Rogers test. The issue is remanded to the courts below for further consideration.

The Court’s second question concerns Jack Daniel's claim of dilution by tarnishment. The Ninth Circuit dismissed the claim based on the Lanham Act's exclusion of "any noncommercial use of a mark." However, the Ninth Circuit's view, which exempts every parody or humorous commentary, is wrong. The fair-use provision specifically covers parody, criticism, and commentary, but not when used as a designating source for one's goods or services. The Ninth Circuit's expansive view of the "noncommercial use" exclusion nullifies Congress' limit on the fair-use exclusion. This contradicts Congress' judgment on when parody and criticism are excluded from dilution liability.

The Court’s opinion is limited in scope. The court did not determine the appropriateness of the Rogers test or the extent of the "noncommercial use" exclusion. As for infringement, the Court held that the Rogers test does not apply when a mark is a mark. As for dilution, the Court determined that the noncommercial exclusion does not protect parody or commentary when it serves as a source identifier. Both of the Court’s holdings depended on whether the mark served a source-designation function. The Lanham Act emphasizes the importance of consumers identifying the source of goods.