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  • Writer's pictureTodd

Supreme Court Rules in Jack Daniels v. VIP Products Case

The Supreme Court issued its unanimous decision in Jack Daniels v. VIP Products. If you are unfamiliar with the facts and posture of the case, please see my previous blog about this case.

I was hoping this case would provide broad protection for free speech of trademark parodies under the First Amendment. While listening to the oral arguments in this case, my initial reaction was that the Court would come to this very conclusion.

However, toward the end of the argument, Justice Kagan said she didn’t get the joke. She asked “What is the parody here? . . . Because maybe I just have no sense of humor, but – what’s the parody?” See Transcript, p. 66. And then, again, later, she says “I don’t see the parody, but, you know, whatever.” Id., 81. My hopes for a broad First Amendment decision were all but dashed, and I had no idea what the Court would do.

If I’m being honest, when the opinion was issued before I read it, I thought it was a loss for the First Amendment. But after reading the unanimous decision, it’s clearly correct on the law and went only as far is it could based on a set of unfortunate facts.

To set the stage, there’s the so-called Rogers test (named after a decision out of the Second Circuit Court of Appeals) that says that an infringement claim must be dismissed unless the party alleging infringement can show either that there is no artistic relevance or that it misleads as to the source. If one of those is shown, then the court looks at the likelihood of confusion test. See Rogers v. Grimaldi, 875 F. 2d 994 (2d Cir. 1989).

Instead of modifying the Rogers test, the Supreme Court narrowly held that the Rogers test does not apply “when an alleged infringer uses a trademark in the way the Lanham Act most cares about: as a designation of source for the infringer’s own goods.” Op., p. 10. The Court uses a few examples, such as when a character in The Hangover: Part II describes his luggage as “Louis <“lewis”> Vuitton,” the movie was not using Louis Vuitton as its own brand or source identifier. Id., p. 12. This is different than a suitcase company selling a suitcase with the modified LV logo. Id., p.14.

The Court held that just because a mark has a humorous message does not mean it automatically gets protection under Rogers. Id., p. 15. The Court said that the hangtag on the back of the toy showed Bad Spaniels being used as a source identifier as it sits near the registered Silly Squeakers trademark. Id., pp. 7, 17.

Bad Spaniels hangtag.

During oral argument, Justice Sotomayor noted “he only trademark I see on your product is the Silly Squeakers.” Tr., p. 72. Counsel for VIP stated, “That is the actual trademark.” Id. Counsel for VIP noted, “e have argued throughout the case, in the district court and in the court of appeals, that neither Bad Spaniels nor the label and the appearance on the – on the toy are designations of source or function as a trademark.” Id., p. 74.

However, more damning and fatal to VIP was VIP’s Complaint alleged it was “the owner of all rights in its ‘Bad Spaniels’ trademark and trade dress for its durable rubber squeaky novelty dog toy.” Op., p. 8. Here, the Court said, VIP conceded it used Bad Spaniels as a source identifier, and thus it does not get Rogers protection. This shows the dangers of using “rote” language in Complaints, but beyond that, the Court says, VIP’s has registered marks such as Dos Perros, Smella Arpaw, and Doggie Walker.

SMELLA ARPAW dog toy, which VIP registered.

Is a hangtag with lots of information enough to show use as a source identifier? What about just a hangtag without a pattern and practice of registering silly names as source identifiers? What about just a hangtag without a concession of source identifier use in the Complaint?

As for dilution, the Lanham Act has a fair-use exclusion that covers uses “parodying, criticizing, or commenting upon” famous marks. Id., p. 19. But it does not apply when such use is as a source identifier. Id. Thus, VIP cannot benefit from the fair-use exclusion. Id., p. 20.

The procedural effect of this decision is that it will go back to the trial court on the issue of likelihood of confusion. Here, VIP may still win on that issue. For there to be parody when it comes to trademarks, it must be (1) "the original” (2) but also that it is not the original and is instead of parody. See, e.g., Cliff Notes, 886 F.2d 490 (2d Cir. 1989).

Justice Sotomayor, with Justice Alito joining, wrote a separate concurrence to note that when there are First Amendment or parody concerns, “courts should treat the results of surveys with particular caution.” Sotomayor, J., Concurring Op., p. 1. Particularly, “Survey answers may reflect a mistaken belief among some survey respondents that all parodies require permission from the owner of the parodied mark.” Id.

Justice Gorsuch, joined by Justice Thomas and Justice Barrett, notes that Rogers may be incorrect, and cautions lower courts to tread carefully when applying it. Gorsuch, J., Concurring Op., p. 1.

Luckily, I think parody dog toys are still safe for now… as long as they don’t use the clever names as source identifiers!

Please note that the information contained in this article is intended for general informational purposes only and not as specific legal advice. The facts of your situation may differ from this general information. It is not intended to and does not in any way establish an attorney-client relationship.

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