In case involving trademark infringement and dilution stemming from dog toy company’s mocking imitation of Jack Daniel’s whiskey bottle, U.S. Supreme Court holds that Rogers v. Grimaldi test does not apply when alleged infringer uses mark to identify source of its own goods, and “noncommercial use” exclusion does not protect parodies of marks when those parodies are used as source identifiers.
VIP Products is the maker of “Silly Squeakers,” a line of chewable, squeaky, rubber toys for dogs. Most of the toys in the line are designed to resemble, and parody, popular alcoholic beverage brands. In 2014, VIP introduced the “Bad Spaniels” toy, which was designed to resemble, and poke fun at, the iconic Jack Daniel’s bottle. VIP used the same shape as a Jack Daniel’s bottle of whiskey; the same or a similar font as that which is used by Jack Daniel’s; replaced “Jack Daniel’s” with the rhyming “Bad Spaniels”; and replaced “Old No. 7 Brand Tennessee Sour Mash Whiskey” with “Old No. 2 on Your Tennessee Carpet.” Jack Daniel’s, which holds registered trademarks in the brand name, “Old No. 7” and in the stylized label and the shape of the bottle, sent a cease and desist letter demanding that VIP stop selling the Bad Spaniels toy. In response, VIP brought suit, seeking a declaratory judgment that its product neither infringed nor diluted Jack Daniel’s trademarks. Jack Daniel’s, in turn, brought counterclaims under the Lanham Act for trademark infringement and trademark dilution.
In the district court, VIP moved for summary judgment on both claims. As to infringement, VIP primarily relied on the Second Circuit’s decision in Rogers v. Grimaldi, which holds that expressive works cannot create liability for trademark infringement unless the challenged use of the mark “has no artistic relevance to the underlying work” or “explicitly misleads as to the source or the content of the work.” VIP contended that the Bad Spaniels toy was an expressive work and that the district court needed to apply the Rogers test before even addressing whether there was a likelihood of confusion (the core inquiry for infringement claims) between Bad Spaniels and Jack Daniel’s. As for the dilution claim, VIP asserted that Jack Daniel’s had no claim because Bad Spaniels was a parody and therefore made “fair use” of Jack Daniel’s marks.
The district court rejected both of VIP’s arguments and denied its motion for summary judgment. On infringement, the district court held that the Rogers test was inapplicable when an alleged infringer has used the parodic or otherwise mimicked imitation of the mark for source identification. Instead, a court must address head-on the likelihood of confusion. And on dilution, the district court held that parodies only fall within the fair use exclusion when they are not used as “a designation of source for the [alleged diluter’s] own goods.” At a subsequent bench trial, the district court found for Jack Daniel’s on both claims, partly in reliance on consumer survey responses evidencing confusion about the source of the Bad Spaniels toy.
The Ninth Circuit reversed, holding that the Rogers test was applicable because Bad Spaniels “communicate[d] a humorous message” and therefore was an expressive work. On the dilution claim, the Ninth Circuit held that because Bad Spaniels was a parody, its uses of Jack Daniel’s marks were “noncommercial use[s]” and therefore were shielded from liability, and awarded judgment to VIP. The Supreme Court subsequently granted certiorari to review the Ninth Circuit’s rulings.
The Supreme Court dedicated the majority of its analysis to the infringement claim, and specifically to the issue of whether the Rogers test should apply in scenarios when an alleged infringer has used a trademark as a designation of source for the infringer’s own goods, as VIP did with Bad Spaniels. While avoiding comment on the general propriety of Rogers, the Supreme Court held that the Rogers test did not apply. The Court explained that Rogers was, and always has been, a cabined doctrine and that both the Second Circuit and other federal courts have only applied it where “a trademark is used not to designate a work’s source, but solely to perform some other expressive function.” As examples, the Court contrasted Mattel, Inc. v. MCA Records, Inc., in which the Ninth Circuit correctly applied Rogers in a lawsuit about the popular song “Barbie Girl,” with cases such as Harley-Davidson, Inc. v. Grottanelli, in which the Second Circuit rejected the applicability of Rogers for a motorcycle mechanic who used a modified version of Harley-Davidson’s bar-and-shield logo. The Court also roundly rejected the Ninth Circuit’s holding that Rogers should apply so long as a source-identifying mark includes some expressive content. The Court wrote that, under such a view, “Rogers might take over much of the world,” given how commonplace it is for a mark to both convey expressive messages and identify sources. Instead, the Court took the view that “[w]hen a mark is used as a mark …, the likelihood-of-confusion inquiry” offers sufficient protection for consumers and producers alike.
Turning to the facts of the dispute, the Court determined—based on VIP’s own admissions—that it uses the Bad Spaniels marks and trade dress as source identifiers. The only remaining question for the case was “whether the Bad Spaniels marks are likely to cause confusion.” While VIP’s parodic messaging was insufficient to trigger application of the Rogers test, the Court explained that it could still play a role in the likelihood-of-confusion analysis. The Court noted that for a parody to succeed, it “must also create contrasts, so that its message of ridicule or pointed humor comes clear. And once that is done …, a parody is not often likely to create confusion.” With that guidance, the Court remanded the infringement claim back to the lower courts.
As for dilution, the Court found that the Ninth Circuit had misread Section 1125 of the Lanham Act and its enumerated exclusions from dilution liability. Specifically, the Ninth Circuit erred in holding that the “noncommercial use” exclusion in Section 1125(c)(3)(C) applied to parodies or other humorous commentary. Instead, parodies fall within the “fair use” exclusion in Section 1125(c)(3)(A), but only if the mark is not being used “as a designation of source for the person’s own goods or services.” “In that event, no parody, criticism, or commentary will rescue the alleged dilutor.” The Court held that “the noncommercial exclusion does not shield parody or other commentary when its use of a mark is … source-identifying,” and, as with the infringement claim, remanded the dilution claim for further proceedings.
Summary prepared by David Grossman and Edward Delman