Seeing an opportunity to capitalize on comedic freedom of speech and parodistic liberties (think Weird Al Yankovic and Aqua’s Barbie Girl hit song), a pet toy maker decided to create a chewable, squeaky dog toy shaped like the famous bottle of Jack Daniel’s whiskey called “Bad Spaniels.” Instead of the recognizable slogan “Old No. 7 Brand Tennessee Sour Mash Whiskey” found on Jack Daniel’s products, Bad Spaniels featured the phrase “The Old No. 2 On Your Tennessee Carpet.” Jack Daniel’s was not impressed and forced a lawsuit to determine whether its registered trademarks in the Jack Daniel’s name, words and graphics on its labels, and bottle trade dress were infringed by Bad Spaniels.

At the trial court level, Jack Daniel’s argued Bad Spaniels infringed Jack Daniel’s famous marks because consumers were led to believe that Jack Daniel’s had created or sponsored the dog toy. Jack Daniel’s further accused Bad Spaniels of diluting its marks by associating the famed whiskey with dog excrement. Relying on the Rogers Test[1] for expressive artistic works adopted by the Second Circuit, Bad Spaniels argued its use of the Jack Daniel’s signature marks had artistic relevance to its toy products and the dog toys did not explicitly mislead consumers as to source of the goods. The District Court sided with Jack Daniel’s finding the Rogers Test inapplicable because Bad Spaniels was using the allegedly infringing marks as trademarks, and therefore, liability turned on a likelihood of confusion analysis, which the court found tipped in Jack Daniel’s favor. Bad Spaniels appealed and the Ninth Circuit reversed. Latching on to the “humorous message” communicated by the dog toys and Bad Spaniels’ efforts to parody Jack Daniel’s, the appellate court determined that Bad Spaniels’ First Amendment freedom of expression trumped Jack Daniel’s claim of consumer confusion. The Ninth Circuit also found Bad Spaniel’s use of the Jack Daniel’s marks to be “non-commercial” and exempt from dilution claims per 15 U. S. C. § 1125(c)(3)(C). The Supreme Court rejected the Ninth Circuit’s conclusions, holding instead that when an accused infringer uses another’s trademark (or a substantially/confusingly similar mark) as a trademark to designate the source of its own goods, the First Amendment does not preclude a likelihood of confusion analysis regardless of the artistic merit of the allegedly infringing use. See Jack Daniel’s Props. v. VIP Prods. LLC, 2023 U.S. LEXIS 2422 (2023). Moreover, the Supreme Court revived Jack Daniel’s dilution claim finding the use of a mark does not count as noncommercial just because it parodies, or otherwise comments on, another’s products.

In analyzing the issue, the Supreme Court started with the fundamentals of trademark law: a trademark is “any word, name, symbol, or device, or any combination thereof” that distinguishes the source of the goods or services provided under that mark from those manufactured or sold by others. 15 U. S. C. § 1127. At their core, trademarks serve as source indicators and identifiers to allow consumers to discern and differentiate between products and services offered by different providers. In that way, brands derive substantial value from their marks, which consumers recognize and come to associate with a certain level of quality, consistency, and source, e.g. Nike “swoosh” on sneakers, Apple “bitten apple” on electronics, Starbuck’s “siren” on coffee cups, etc. Owners of registered and unregistered trademarks enjoy the protections of the Lanham Act, which imposes infringement liability for unauthorized use of a similar mark “likely to cause confusion, or to cause mistake, or to deceive” as to “the source of a product or service.” 15 U. S. C. §§ 1114(1)(A), 1125(a)(1)(A). Additionally, the Lanham Act provides a cause of action for dilution of famous marks, which occurs when a similar mark is used in such a way as to damage or dimmish the public’s perception of the famous mark. 15 U. S. C. § 1125(c)(2)(A). For example, selling cheap clothes labeled FERRARI, opening a strip club under the name CHIK-FIL-A, or offering GUCCI burgers and fries. There are of course several exclusions: “noncommercial use of a mark” does not give rise to a dilution claim; and when a mark is used “in connection with . . . parodying, criticizing, or commenting upon the famous mark owner or [its] goods” it is subject to a “fair use” defense (news reporting, articles, education materials, satire, etc.), except when the famous mark or a similar mark is used as a source-identifying trademark. 15 U. S. C. §§ 1125(c)(3)(A), 1125(c)(3)(C).

Jack Daniel’s has amassed several distinctive registered marks: the “Jack Daniel’s” name, “Old No. 7,” the Jack Daniel’s logo, the stylized black label with white twirling lines, and the square bottle. Bad Spaniel’s squeaky dog toy incorporates modified versions of these elements made to resemble and evoke an image of a Jack Daniel’s bottle of whiskey.

Thus, because Bad Spaniel used the parody marks as source identifiers, i.e., to distinguish the source of its dog toys from that of other toys, the dispositive legal question was a likelihood-of-confusion analysis, i.e., whether consumers would be confused into thinking Bad Spaniels was associated with, sponsored by, or produced by Jack Daniel’s. The Supreme Court parted ways with the Ninth Circuit in rejecting the notion that because a trademark may have expressive value, i.e., it conveys some type of message or commentary in addition to source, it is entitled to First Amendment protection and insulation from infringement liability. Most trademarks and trade dresses convey a message or contain some expressive value, and therefore the exception (Rogers test) would swallow the rule (protection from consumer confusion). And therefore, the Supreme Court remanded the case for a likelihood-of-confusion determination, which would entail a consideration of whether Bad Spaniel’s parodic message creates enough of a contrast with the original such that its message of ridicule or pointed humor comes clear and would not lead to consumer confusion.

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[1] The Rogers test requires dismissal of an infringement claim unless the complainant can show one of two things: that the challenged use of a mark “has no artistic relevance to the underlying work” or that it “explicitly misleads as to the source or the content of the work.” Rogers v. Grimaldi, 875 F. 2d 994, 999 (CA2 1989) (Newman, J.).

The post Jack Daniels v. Bad Spaniels: Parody and First Amendment Protections Do Not Shield Users of Expressive Commercial Source-Identifying Marks From Trademark Infringement Liability appeared first on Stark & Stark, PC.