Jack Daniel's Trademark Dispute Against Parodying Toy Maker Argued Before US Supreme Court
On March 22, 2023 the US Supreme Court heard oral argument in a case about the rights of a trademark holder in conflict with the First Amendment’s freedom-of-speech rights of a company wanting to use those trademarks to sell humorous products.[1] This case has generated great interest because the US Justice Department is siding with Jack Daniel’s in the dispute, and the Biden administration urged the justices to hear and decide the case. Several well-known brand owners such as Nike have filed amicus briefs in support of Jack Daniel’s.
The two issues before the Court are: (1) Is humorous use of another’s trademark as one’s own on a commercial product subject to the Lanham Act’s likelihood-of-confusion analysis, or does such use instead receive heightened First Amendment freedom-of-speech protection from infringement claims; and (2) Is humorous use of another’s trademark as one’s own on a commercial product “noncommercial” thus barring as a matter of law a claim of dilution by tarnishment under the Trademark Dilution Revision Act.
VIP Products LLC (VIP) made a dog toy copying Jack Daniel’s iconic whiskey bottle. Specifically, the toy has a similar font style and a black label like its counterpart. However, instead of “Jack Daniel’s,” the toy is labelled “Bad Spaniels”, and instead of “Old No. 7” and “Tennessee Sour Mash Whiskey” it reads “The Old No. 2 on your Tennessee Carpet.”
Jack Daniel’s demanded that VIP stop selling the toys. VIP sued for a declaration that its toy was a parody that did not infringe or dilute the Jack Daniel’s trademark. Jack Daniel’s counterclaim for infringement prevailed. The trial court reasoned that even if the toy was an “expressive work,” it was still a commercial product, and thus it did not receive the benefit of an exception to trademark infringement that a parody is entitled to under the Lanham Act. The district court thus found both infringement and dilution of the Jack Daniel’s mark.
However, the US Court of Appeals for the Ninth Circuit reversed both holdings by applying an exception to the Lanham Act known as the “Rogers test.” The court held that the toy is a humorous parody entitled to First Amendment freedom-of-speech protection. Under the Rogers test, Jack Daniel’s could only win by demonstrating that the use of its trademark was not artistically relevant to the toy or that they toy explicitly misleads consumers.
Jack Daniel’s argued that that the Lanham Act has no exceptions for expressive works and bars using marks for any goods when likely to cause confusion as to origin, sponsorship, or approval. Jack Daniel’s asserted that artistic relevance has nothing to do with confusion, and both implicit and explicit uses may confuse. Parodies won't confuse when differences in marks, markets, or messaging signal that the brand company didn't make the joke. But absent such differences, copying and trading on another brand's goodwill tends to confuse.
As to dilution, Jack Daniels argued that the Ninth Circuit holding nullifies Congress's decision to limit the parody exclusion to uses other than as a designation of source. The company said that the Supreme Court should give noncommercial use its ordinary meaning, a use not involving the buying and selling of goods.
For its part, VIP argued that parodies on noncompetitive goods like the toy will likely not cause confusion as to source or approval because companies do not license lampoons of their own products. [We note that this is a very broad assumption; there is no reason to believe that it is true all of the time.]
The United States as amicus curiae supported Jack Daniel’s, arguing that the Rogers case was incorrectly decided, and the Rogers test is inconsistent with the text of the Lanham Act. The Government explained that many circuit courts of appeal correctly deal with parodies by taking the parodic nature of the use into account under the existing the statutory likelihood-of-confusion standard. VIP responded that the circuit courts developed the Rogers test to protect expressive works and to keep the threat of litigation from silencing speech from parodists. The Government responded that such a view just can't be reconciled with the language of the Lanham Act itself and is not compelled by the First Amendment of the United States Constitution.
Interested parties will be watching this case carefully. The Supreme Court could strengthen the brand owner’s position, or it could remove some trademark protections by giving companies permission to use registered marks of others as long as it is done in a humorous way. We will report again when the decision is announced.
