Whether you operate a large e-commerce company on Amazon, a specialized artisan store on Shopify or Etsy, or a local t-shirt company, all brands producing products resembling famous marks should consider the implications of the seminal Supreme Court ruling in Jack Daniels v. Bad Spaniels.
On June 8th, the Supreme Court issued an opinion in the face-off between intellectual property rights versus freedom of speech. As Justice Kagan stated:
“This case is about dog toys and whiskey, two words seldom appearing in the same sentence.”
The Supreme Court concluded expressive work infringing on intellectual property rights by using trademarks, at least in part, as source origination will not receive First Amendment protection.
In the litigation, VIP Products LLC, a creator of adult beverage-inspired dog toys, sued Jack Daniel’s Properties Inc., America’s top whiskey seller, to assert their right to market and sell a dog toy called, “Bad Spaniels.” The “Bad Spaniels” dog toy parodies Jack Daniel’s most popular product, Tennessee Whiskey No. 7. For the full background of the case leading to the Supreme Court, read KJK’s previous article here.
In summary, the court ruled that the exclusion of Lanham Act liability, established by the Second Circuit precedent (Rogers v. Grimaldi) which applied to “expressive works” using satire or parody of a trademark, does not apply when the “expressive work” itself functions as a trademark. As such, Rogers’ First Amendment protections cannot be relied upon to overcome claims of trademark infringement or dilution when the alleged infringer is using the mark to indicate the source of its goods or services.
The court highlighted the primary objective of trademarks, which is to assist consumers in easily recognizing a product as originating from a specific company. Thus, companies develop, protect and register their trademarks to derive the significant value arising from consumers identifying and purchasing behavior while simultaneously, and sometimes more importantly, protecting their brand and products from competitors and unauthorized resellers, although the latter was not discussed in this case.
In the Ninth Circuit, Bad Spaniels won on its First Amendment arguments based on its reliance on Rogers, where the court reasoned that the “humorous message” of the Bad Spaniels product would be sufficient to preclude liability under the Lanham Act, unless Jack Daniel’s could satisfy one of the two prongs of the Rogers test. According to the Ninth Circuit, Jack Daniel’s would need to prove that use of a challenged mark must be either:
- Not artistically relevant to the underlying work.
- Explicitly misleads consumers as to the source or content of the work (rather than elaborating on arguments of dilution and tarnishment, upon which the district court relied).
In previous applications of Rogers, courts have historically found only a “slight risk” of confusion to consumers when the parody or lampooning work is clearly not related to the source of protected mark. The Fourth Circuit cited the examination of “Chewy Vuitton,” dog toys that “loosely resemble[d]” Louis Vuitton handbags and marks were “successful parodies”, rather than an “idealized image” of the famous Louis Vuitton marks. However, this case draws a new line that the inclusion of parody or humor is not enough. When the challenged work is used as a trademark connoting source identification of goods or services, trademark protections under the Lanham Act maintain their full force with no First Amendment exception for the expressive work. There is no doubt the Bad Spaniels squeaky dog toy bottle intentionally mimics Jack Daniels’s Tennessee Whiskey No. 7 trade dress, based on the mirroring placement of the untrademarked brand name of Bad Spaniels, images, and design of the bottle. While the product label explicitly disclaims any affiliation with Jack Daniel’s, it is equally evident that Bad Spaniels asserts a proprietary trademark interest in its parody of the Jack Daniel’s marks.
How Broadly Does this Case Apply?
While this case provides new clarity around both statutory fair use and judicial exceptions to trademark infringement, some factual specifics are worth noting.
Under the Lanham Act, the holder of a famous mark does not have to prove the likelihood of confusion of the source of a product or service required but can instead argue that its marks have been diluted, based instead upon “tarnishment” and “blurring,” though the latter of which did not apply here. Instead, they argued that that the offending mark “harms the reputation of the famous mark.” The Jack Daniel’s marks and trade dress would certainly seem to qualify as “famous” marks (being “widely recognized” by the public). In the case of a non-famous mark, it would seem that a similar fact pattern would likely turn more quickly to a more traditional analysis of actual or likely confusion in the minds of the mark-holder’s customers.
Does the Roger’s Exclusion Still Apply?
The Opinion of the Court specifically opted not to “decid[e] whether Rogers has merit in other contexts,” instead stating that an alleged infringer who uses a trademark as the designation of its own goods implicitly forfeits the opportunity to argue that the mark is an expressive work protected by the First Amendment. The Court reminded the parties that Rogers was fundamentally based on the alleged misuse of Ginger Rogers’ name in the title of an Italian film, which was a clear artistic work with which Rogers had no affiliation. Instead, the Court declared that Rogers is a “cabined doctrine,” and that merely laying a “humorous message” or parody atop of a potentially infringing trademark will no longer suffice to invoke the First Amendment as an exclusion. It is important to note that, notwithstanding the careful treatment of Rogers by the majority, Justice Gorsuch’s concurrence, joined by Justice Thomas and Justice Barret, devoted it’s entire one-paragraph substance to this single issue. “The lower courts should handle Rogers… with care,” said the three justices, noting that neither the source nor reasoning of Rogers is entirely clear nor that “it is obvious that Rogers is correct in all of its particulars…”
Is This a Slam Dunk? No, the final holding of the Court did not attempt to clarify the extent to which Rogers might otherwise apply and it remanded the issue of whether or not the Bad Spaniels mark’s expressive, parodic message is sufficiently clear to avoid a presumptive likelihood of confusion in the minds of the customers of Jack Daniel’s to the lower courts for further resolution.
Even for famous marks, a Lanham Act claim for brand dilution continues to provide a clear fair use exception for parodies: e.g., non-commercial use, including the sale of products when based on parodic expressive work intending to convey a humorous message and the fair use exception which also permits expressive work intending to convey humor. However, it is now clear that this exception does not apply when the expressive work is used, at least in some way, as a source designation to the popular brand (i.e., “the use of a mark as a mark”).
Key Takeaways for Business Owners, E-Commerce Sellers, and Influencer Markets
This case has implications that goes well beyond dog toys, impacting brand owners, e-commerce sellers, and influencers who operate businesses using famous marks in innovative ways. This ruling effects companies selling seemingly harmless satirical products, such as the t-shirt company using known NFL designs and marks or the sellers on Etsy or Shopify making and selling t-shirts modeled off of popular tv shows. Marks which implicate source origination, in any way, are subject to the likelihood of confusion test. Brand owners should pro-actively seek the assistance of legal professionals to protect brands in operating outside the gray area, as well as brands which may be targeted by other brand owners in order to avoid the potential for an undesired legal battle such as this case.
The Branding World Continues to Evolve
Competitors are continually finding creative new ways to incorporate competitors’ products work into their own in order to win over consumers in the marketplace. The Supreme Court’s holding strengthens the benefits of intellectual property rights for brand owners to protect their products from the innovative tactics competitors are integrating into the advertisement and sale of their own products. Following this seminal Supreme Court decision, KJK’s e-commerce, intellectual property, internet defamation, and First Amendment teams are a great resource for brand owners looking to protect and defend against legal issues.