In a unanimous decision, the Supreme Court issued an important ruling on June 8, 2023 that will strengthen brand holders’ ability to enforce their trademark rights against unauthorized commercial uses claiming protection under the First Amendment. Jack Daniel’s Properties v. VIP Products, No. 22-148. In particular, the Supreme Court reversed a 9th Circuit decision permitting an allegedly parodic dog toy sold as “Bad Spaniels”—a play on the whiskey brand “Jack Daniel’s”—to escape any Lanham Act liability under theories of infringement or dilution.
The Lanham Act creates causes of action for trademark infringement and dilution. In a typical infringement case, a court asks whether the defendant’s use of a mark is “likely to cause confusion, or to cause mistake, or to deceive.” 15 U. S. C. §§ 1114(1)(A), 1125(a)(1)(A). Where “expressive works” that use a trademark are involved, the Second Circuit created the “Rogers test” to protect First Amendment values of free speech. See Rogers v. Grimaldi, 875 F. 2d 994, 999 (2d. Cir. 1989) (Newman, J.).To apply the Rogers test, the court asks whether the trademark holder seeking to enjoin the trademark use can demonstrate (1) that the challenged use of a mark “has no artistic relevance to the underlying work” or (2) that it “explicitly misleads as to the source or the content of the work.” Id. at 999.
Trademark dilution generally exists where a party uses another’s famous trademark in a way that “harms the reputation” of the trademark via blurring and/or tarnishment. 15 U.S.C. §§ 1125(c)(2)(A), (C). However, the Lanham Act excluded “noncommercial use of a mark” from dilution liability. Id. at § 1125(c)(3)(C). This is a form of “fair use” that protects parody, criticism, and commentary on a famous trademark from dilution liability.
In the case of Jack Daniel’s Properties v. VIP Products, VIP Products (“VIP”) makes a squeaky, chewable dog toy designed to “parody” the look of a Jack Daniel’s-brand whiskey bottle. For example, the words “Jack Daniel’s” become “Bad Spaniels,” and “Old No. 7 Brand Tennessee Sour Mash Whiskey” turns into “The Old No. 2 On Your Tennessee Carpet.” Jack Daniel’s demanded VIP stop marketing the product.
VIP responded to Jack Daniels’ demand by filing a declaratory judgment lawsuit, asking a court to declare that its “Bad Spaniels” dog toy did not infringe the famous Jack Daniel’s trademark. Jack Daniel’s counterclaimed, arguing that VIP’s use infringed and diluted its famous JACK DANIEL’S trademark. VIP argued that Jack Daniel’s infringement claim failed under the Rogers test and that its parodic use was protected fair use under the Lanham Act.
The District Court rejected VIP’s contentions because VIP used the Jack Daniel’s trademark to identify the source of VIP’s own products, not to parody, criticize, or comment on the JACK DANIEL’S brand or whiskey bottle. The District Court explained that when another’s trademark is used for “source identification,” Rogers and fair use do not apply. At trial, the District Court found 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 Ninth Circuit reversed, holding that since VIP’s use is “expressive,” the Rogers test is the threshold question. If Jack Daniel’s cannot satisfy the Rogers test, the trademark infringement claim fails. The Ninth Circuit also held that VIP’s use was protected under the Lanham Act’s “noncommercial use” exclusion to dilution liability.
The Ninth Circuit remanded the case to the District Court to decide whether Jack Daniel’s could satisfy the Rogers test. The District Court found that Jack Daniel’s could not, and granted summary judgment to VIP on infringement. The Court of Appeals affirmed. Jack Daniel’s appealed to the Supreme Court.
The Supreme Court overturned the Ninth Circuit’s decision, and held that when an alleged infringer uses a trademark as a designation of source for the infringer’s own goods, the court should analyze whether the infringer’s use is likely to confuse consumers into believing the use is associated with the trademark holder. The Court explained that the Rogers test “is not appropriate when the accused infringer has used a trademark to designate the source of its own goods—in other words, has used a trademark as a trademark. That kind of use falls within the heartland of trademark law, and does not receive special First Amendment protection.”
Although the Supreme Court made it clear that it took no position on the propriety of the Rogers test, the Court explained that the Rogers test may be appropriate where a trademark is used solely to perform some other expressive function, not to designate a work’s source. See, e.g., Mattel, Inc. v. MCA Records, Inc., 296 F. 3d 894, 901 (2002) (use of the Barbie name in band’s song “Barbie Girl” was “not [as] a source identifier”). By contrast, the Court explained that the traditional likelihood-of-confusion analysis, not the Rogers test, should be applied in cases where trademarks are used as trademarks—i.e., to designate source. See, e.g., Tommy Hilfiger Licensing, Inc. v. Nature Labs, LLC, 221 F. Supp. 2d 410, 412 (SDNY 2002) (Mukasey, J.)(parodic pet perfumes did not trigger Rogers because defendant’s use of Tommy Hilfiger’s mark was “at least in part” for “source identification”).
The Supreme Court also held that the Lanham Act’s exclusion from dilution liability for “noncommercial use of a mark” does not apply when an alleged diluter uses a mark as a source identifier for its own goods. The Court explained that the use of a mark “does not count as noncommercial just because it parodies, or otherwise comments on, another’s products.” The Lanham Act specifically states that the exclusion of liability for “noncommercial use” does not apply when the alleged diluter uses the trademark “as a designation of source for the person’s own goods or services.” 15 U.S.C. § 1125(c)(3)(A). The Court stated that “the Ninth Circuit’s holding to the contrary put the noncommercial exclusion in conflict with the statute’s fair-use exclusion.”
This decision has important takeaways for brand owners who wish to enforce their trademark rights against unauthorized commercial uses claiming protection under the First Amendment:
- The holding provides brand holders more control over their trademarks. Using another’s trademark as a source identifier (e.g., on commercial goods) can infringe, despite having an expressive quality. Trademark owners will now have an easier time preventing unauthorized uses of their marks on consumer goods that parody or criticize their brand.
- Businesses must be careful not to use another brand’s trademark in a way that may confuse consumers. Businesses that market goods in a way that suggests to consumers that their brand is affiliated with the trademark owner could infringe the trademark holder’s trademark. This is true even if the use is meant to poke fun at the trademark.
- Content creators should be careful when parodying or commenting on another brand’s trademarks in a commercial way. A content creator that criticizes another’s trademark on a commercial product (e.g., posters or video games) can still be liable for dilution. The use of a mark does not count as noncommercial just because it parodies or otherwise comments on another’s products.