Supreme Court Vacates and Remands the Lower Court's Ruling in Jack Daniel’s Properties Inc. v. VIP Products LLC
Written June 15, 2023
On June 8, 2023 the Supreme Court vacated and remanded the lower court's ruling in Jack Daniel’s Properties Inc. v. VIP Products LLC. This ruling is consistent with the outcome encouraged by the amicus brief filed by AIPLA on January 18, 2023. To read the opinion of the Court, please click here.
BACKGROUND
VIP Products is a company that specializes in manufacturing dog toys, among them, a line of “Silly Squeakers,” dog toys that resemble alcoholic beverages and feature dog-related puns. VIP created a dog chew toy based on the appearance of a Jack Daniel’s whisky bottle and label, but, for example, instead of saying "Jack Daniel's," the toy's label says, "Bad Spaniels" and instead of "Old No. 7" and "Tennessee Sour Mash Whiskey" it says, "The Old No. 2 on your Tennessee Carpet." After Jack Daniel’s sent a cease-and-desist letter, VIP sued Jack Daniel’s in federal district court in Arizona, seeking a declaration that its dog toy did not violate Jack Daniel’s rights in its trademarks and distinctive trade dress.
Initially, the Arizona district court ruled in favor of Jack Daniel’s, applying the “traditional” likelihood of confusion standard and finding trademark infringement. After the U.S. Court of Appeals for the Ninth Circuit reversed the decision, the district court ruled in favor of VIP, explaining that under the Ninth Circuit’s decision, the “Rogers test” should apply because VIP’s toy was protected as a “parody” warranting a different standard of review under the First Amendment. The U.S. Court of Appeals for the Ninth Circuit affirmed the district court’s decision.
Jack Daniel’s appealed the ruling to the U.S. Supreme Court in August 2022, and AIPLA filed an amicus brief in support of granting Jack Daniel’s petition for certiorari on September 16, 2022. The Court granted the petition in November 2022, and AIPLA again filed an amicus brief addressing the merits on January 18, 2023. The Supreme Court granted certiorari to address the following questions:
1. "Whether humorous use of another's trademark as one's own on a commercial product is subject to the Lanham Act's traditional likelihood-of-confusion analysis, or instead receives heightened First Amendment protection from trademark-infringement claims."
2. "Whether humorous use of another's mark as one's own on a commercial product is "noncommercial" under 15 U.S.C. Section 1125(c)(3)(C), thus barring as a matter of law a claim of dilution by tarnishment under the Trademark Dilution Revision Act."
2. "Whether humorous use of another's mark as one's own on a commercial product is "noncommercial" under 15 U.S.C. Section 1125(c)(3)(C), thus barring as a matter of law a claim of dilution by tarnishment under the Trademark Dilution Revision Act."
OPINION OF THE COURT
Justice Kagan delivered a unanimous, narrow opinion for the court, vacating and remanding the lower court’s ruling. Justice Sotomayor filed a concurring opinion in which Justice Alito joined and Justice Gorsuch filed another concurring opinion in which Justices Thomas and Barrett joined.
Without taking a position on the merits of the Rogers threshold test, the Court held that use of the Rogers threshold inquiry, or any First Amendment threshold inquiry, is not appropriate when the accused infringing trademark is used to designate the source of the accused infringer’s own goods, as VIP has done with the “Bad Spaniels” mark. The Court explained that because VIP used marks derived from Jack Daniel’s marks and trade dress as a designation of the source of VIP’s products, “the infringement claim here rises or falls on likelihood of confusion.” In reaching this conclusion, the Court rejected VIP’s argument that its use of the “Bad Spaniels” trademark and trade dress was not intended to identify VIP’s goods (despite VIP’s admission in its complaint). The Court relied on facts in the record, including the placement of the “Bad Spaniels” mark on the product label opposite the “Silly Squeakers” logo, as well as VIP’s practice of using and registering similar marks as trademarks in connection with its Silly Squeakers line of toys (see pp. 17-18).
After reviewing the origin of the Rogers test, as well as various lower courts’ applications of First Amendment threshold tests in the trademark context, the Court concluded that Rogers has always been a cabined doctrine limited to cases involving “non-trademark uses” of the marks at issue, rather than a means to insulate from scrutiny the use of trademarks as trademarks. The Court confirmed that when a trademark is used, at least in part, for source identification, even if there is also an expressive or parodic element to the use, likelihood of confusion is the proper analysis, and the intended parodic nature is a factor to be considered in the analysis.
Addressing VIP’s First Amendment concerns, the Court explained that if all expressive trademark uses triggered the Rogers threshold inquiry, as the Ninth Circuit suggested, “the Rogers exception would become the general rule” and “very few cases would even get to the likelihood-of-confusion inquiry.” The Court clearly stated, “When a mark is used as a mark…the likelihood-of-confusion inquiry does enough work to account for the interest of free expression.”
Relying on the language of the statute, the Court rejected the Ninth Circuit’s expansive interpretation of the “noncommercial use” exclusion from dilution liability, which “effectively nullifies Congress’s express limit on the fair-use exclusion for parody.” The Court confirmed that parody falls under the “fair use” exclusion, which only applies when the mark is not used to designate the source of the infringer’s own goods.
The Court remanded the judgment for further proceedings consistent with their opinion.
CONCURRING
Justice Sotomayor, joined by Justice Alito, offered the first concurring opinion, noting that though she agrees with the opinion of the Court, she wishes 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.” In this case, as in many, the plaintiff produced a survey to demonstrate potential consumer confusion by an allegedly infringed product. The opinion cautions that parody cases carry a risk of giving “undue weight” to surveys and that allowing such results to “drive the infringement analysis would risk silencing a great many parodies...” Brands with the resources to commission hefty surveys would undoubtedly “be handed an effective veto over mockery.” The opinion urges courts to “be attentive to ways in which surveys may artificially prompt such confusion about the law or fail to sufficiently control for it.”
CONCURRING
Justice Gorsuch, joined by Justices Thomas and Barrett, authored the second concurring opinion to emphasize that lower courts should handle the Rogers test with care in deciding cases, as much about Rogers remains unaddressed, including the basis for the test and whether the test is correct in its particulars.