Image Courtesy of Foodie Factor/Pixabay
By Alec Winshel
In Jack Daniel’s Properties, Inc. v. VIP Products LLC, the Supreme Court held that the First Amendment does not protect use of another’s trademark as a signifier of one’s own product. Trademarks are words or symbols that identify a seller’s goods and distinguish them from others in the marketplace. Consider the Nike swoosh or, simply, the name Coca-Cola. Trademarks may be used by non-owners under the protections of the First Amendment by, for example, speaking a company’s name in a film’s dialogue. In these cases, the public’s interest in free speech is high and the potential for consumers to be misled about the source of a product is low.
The Supreme Court’s holding in Jack Daniel’s places a limit on the First Amendment’s capacity to defend against a claim of trademark infringement. Now, free speech may not protect the use of another’s trademark to indicate the source of one’s own product. In Justice Kagan’s words, there is no constitutional protection for expressive works when an alleged infringer uses “a trademark as a trademark.” The Court’s decision narrows a long-standing test that has protected creative expression in films, music, and visual art. The Court’s holding in Jack Daniel’s Properties supports continued First Amendment protection for the invocation of another’s trademark in commercial work, like a book, that do not use the trademark as a signifier of that book’s origin. The holding, however, creates a legal hurdle for companies making parodies of others’ products.
In 2014, VIP Products LLC (“VIP”) began selling a new product to its target audience: canines. The company debuted a chewable plastic toy modeled after the recognizable square bottle of Jack Daniel’s Tennessee Whiskey. It was the latest in VIP’s line of “Silly Squeaker” rubber toys that resembled well-known beverage brands. This toy’s black-and-white coloring, font choice, and twirling pattern evoked Jack Daniel’s famous alcohol bottle. The text found on Jack Daniel’s standard bottles, however, had been replaced. “Jack Daniel’s” had become “Bad Spaniels,” and “Old No. 7” was now “The Old No. 2. On Your Tennessee Carpet” etched beneath the face of a startled canine. In small typeface, “40% ALC. BY VOL.” became “43% POO BY VOL.” Importantly, a logo featuring a dog and the words ‘Bad Spaniels’ in Jack Daniel’s recognizable typeface appeared on the back of the toy’s packaging. Jack Daniel’s was not amused. The company believed that the dog toy infringed and diluted its trademarks, which include its name, logo, and bottle shape.
Jack Daniel’s demanded VIP stop selling the toy. VIP filed a lawsuit seeking declaratory judgment that it had neither infringed upon nor diluted Jack Daniel’s trademarks. Jack Daniel’s counterclaimed for trademark infringement and dilution. The U.S. District Court for the District of Arizona denied VIP’s motion and ruled in favor of Jack Daniel’s infringement and dilution claims. The district court issued an injunction enjoining VIP from manufacturing the toy.
The Ninth Circuit reversed. The court held that the toy was an “expressive work entitled to First Amendment protection.” As an expressive work, the infringement claim was required to pass the two-prong test established by the Second Circuit in Rogers v. Grimaldi. The Rogers test asks whether the defendant’s use of the mark is (1) artistically relevant to its expression and (2) if it explicitly misleads consumers as to the source of the product. The Ninth Circuit held that the district court erred by finding infringement without satisfying these prongs and remanded the claim. Similarly, the Ninth Circuit held that the toy’s parodic use of Jack Daniel’s mark to convey a humorous message was “noncommercial” under the Lanham Act, the relevant federal trademark law, and awarded judgment in favor of VIP. On both claims, the Ninth Circuit relied on the First Amendment to protect VIP’s use of Jack Daniel’s trademark.
On remand, the District Court applied the Rogers test and awarded summary judgment to VIP Products on the trademark infringement claim. The Ninth Circuit affirmed. The Supreme Court granted certiorari.
Justice Kagan wrote for unanimous Court, while Justice Sotomayor and Justice Gorsuch each filed a concurring opinion. In her opinion, Justice Kagan extolls the virtues of trademark law: marks inform the public who is responsible for creating a product and consumers benefit from assurances of quality as producers build goodwill within the marketplace. The Lanham Act codifies causes of action for infringement and dilution – practices that, respectively, sow confusion about the source of products and harm the reputations of well-known producers.
Justice Kagan held the Rogers test inapplicable to Jack Daniel’s claim of trademark infringement because VIP used Jack Daniels’ marks, including its name and trade dress, as an identifier of their own product’s source. The First Amendment protections contemplated by Rogers’ two-prong test are unavailing when an alleged infringer uses another’s trademark as a designation of source for their own product or, in the words of Justice Kagan, when the trademark is being used “in the way the Lanham Act most cares about.” Justice Kagan distinguished Rogers’ protection of references to trademarks in film and songs, like a movie character that names a famous brand, from cases in which lower courts refused to apply the test when trademarks had been co-opted into a source identifier for the infringer’s product. Nearly all uses of trademarks have some expressive value, Justice Kagan writes, and the Court will not allow the First Amendment to consume infringement claims entirely. When “a mark is used as a mark,” the Lanham Act’s rationales outweigh speech interests and the Rogers test does not apply.
The Court similarly held that the First Amendment does not shield VIP Products from Jack Daniel’s dilution claim. Parody alone is insufficient to establish “noncommercial” use within the Lanham Act. Justice Kagan imports the Lanham Act’s “fair use” defense, which does not apply when the use designates a product’s source, to the Court’s reading of the statute’s “noncommercial use” exclusion. For the same reason the Court rejected the Rogers test, it reversed the Ninth Circuit’s holding on dilution: the use of ‘Bad Spaniels’ as a source identifier rendered its constitutional protections moot.
Two members of the Court filed concurring opinions with warnings for lower courts. Justice Sotomayor wrote to suggest that courts treat surveys with caution, particularly when a trademark’s use is parodic. Justice Gorsuch concurred to suggest that the Supreme Court may revisit the Rogers test in the future to answer “serious questions” about its holding and that, in the meantime, lower courts should handle its application “with care.”
After Jack Daniel’s, litigants will seek to defend claims of infringement and dilution by arguing that their use of another mark is not “source-identifying.” VIP Products was unable to make this argument for multiple reasons: the company explicitly stated that it used the ‘Bad Spaniels’ mark to “identify” its product and placed the logo on the packaging directly opposite another of its trademarked logos. The company had even registered the names of its other dog toys, which parodied famous beverages, as trademarks with the Patent and Trademark Office. It could hardly be asserted that its use of Jack Daniel’s mark wasn’t as a source identifier.
This case creates a hurdle for manufacturers of consumer products. A manufacturer might enjoy the remaining protections of the First Amendment by limiting its use of another trademark to non-signifying purposes, but it’s not entirely clear where courts will draw the line. Jack Daniel’s suggests that at least three uses indicate the mark is a source-signifier: (1) registration with the Patent and Trademark Office, (2) parallel placement of a logo near another’s trademark, and (3) a history of using similar marks as source-signifiers. Justice Kagan’s analogies to cases in lower courts suggest that use of another’s mark in a slogan or logo also places the alleged infringer on perilous ground.
All such uses appear to maintain First Amendment protections for referencing trademarks in creative arts. Indeed, Justice Kagan describes lower courts’ appropriate application of the Rogers test to alleged infringement in film, songwriting, and a visual artist’s memorialization of a moment in sports history. Concerns by interested parties that the Court’s ruling might eviscerate First Amendment protections for film and television appear, despite Justice Gorsuch’s ominous warning, to be unfounded. The challenge after Jack Daniel’s is primarily for consumers products that reference another well-known brand. However, even for consumer products whose constitutional protections have been weakened, the Court’s holding in Jack Daniel’s does not spell doom. Infringement claims must still establish a likelihood of confusion for consumers: a humorous product poking fun of famous brands from a distance in the marketplace should remain safe from claims under the Lanham Act. VIP Products will now make that claim concerning its own product in a lower court after the Supreme Court’s remand.
Justice Kagan’s opinion for the unanimous court walked a narrow line: scaling back the broad protections embraced by the Ninth Circuit without rejecting wholesale the relationship between the First Amendment and trademark. Now, it falls to lower courts to carve out the boundaries of its holding.