United States: Supreme Court Muzzles Dog Toy Infringer

In an eagerly anticipated decision¹ in the "Bad Spaniels" dog toy case, the United States Supreme Court has vacated a decision of the US Court of Appeals for the Ninth Circuit that had deemed the toy, which looks like a Jack Daniel's bottle, immune to claims of infringement and dilution of various Jack Daniel's trademarks. The Court ruled that the Ninth Circuit was wrong in concluding that the toy was entitled to First Amendment protection under Rogers v. Grimaldi because of the humorous messaging on the toy. The Court held that (1) the Rogers test does not apply when the defendant uses the challenged matter as a mark, and (2) the Ninth Circuit's interpretation of the noncommercial exemption to dilution claims was overbroad.

Background

In 2014, VIP Products began selling its Bad Spaniels toy—part of VIP's Silly Squeakers line of chew toys, which mimic the shapes and packaging of various sodas, liquors, and beers under names such as "Mountain Drool," "Canine Cola," and "Heini Sniff'n." The Bad Spaniels toy mimicked the Jack Daniel's bottle and featured modified language such as "The Old No. 2 on Your Tennessee Carpet" and "100% Smelly." The packaging also noted: "This product is not affiliated with Jack Daniel Distillery."

Jack Daniel's demanded that VIP stop selling the Bad Spaniels toy. In response, VIP filed a declaratory judgment action in the US District Court for the District of Arizona, seeking a declaration that the Bad Spaniels toy did not infringe or dilute Jack Daniel's trademarks. Jack Daniel's counterclaimed with allegations of trademark infringement and trademark dilution by tarnishment.

After finding for Jack Daniel's, the district court permanently enjoined VIP from selling the Bad Spaniels dog toy. VIP appealed to the Ninth Circuit, which agreed with the district court's conclusion that Jack Daniel's trade dress was entitled to trademark protection. But the Ninth Circuit held that "Bad Spaniels" was an expressive work and entitled to special protection as such. Under a test originally articulated by the Second Circuit in the Rogers v. Grimaldi case, the Ninth Circuit ruled that VIP's Bad Spaniels toy could not be considered an infringement of Jack Daniel's trademarks because the toy used Jack Daniel's trademarks to convey a humorous message, rather than just using Jack Daniel's marks to sell and identify Bad Spaniels products, and therefore merited First Amendment protection. The Ninth Circuit also found this expressive work fell within the "noncommercial use" exemption to dilution.

SCOTUS Decision

The Supreme Court first considered whether Jack Daniel's claims had to overcome the Rogers threshold test before likelihood of confusion could be considered. The Court held that the Rogers test is a cabined doctrine that does not apply where an accused infringer uses the mark "in the way the Lanham Act most cares about: as a designation of source for the infringer's own goods." In the narrow context of this case, the Court concluded that the Rogers test did not apply because VIP used Jack Daniel's trademarks to designate the source of its own goods. VIP conceded, as early as in its complaint, that it used its Bad Spaniels trademark and trade dress as source identifiers. Despite holding that the Rogers test did not apply here, the majority included no commentary on the overall merit of Rogers.

The Court next considered whether VIP's Bad Spaniels toy caused dilution by tarnishment, an issue that turned largely on statutory interpretation. Again noting that VIP was using the Bad Spaniels design as a trademark and trade dress, the Court held that humor alone could not shield VIP from liability because the "noncommercial use" exclusion of the dilution section of the Lanham Act cannot apply to or excuse every parody or humorous commentary. Such a reading would conflict with the statute's express fair-use and parody exclusions for dilution claims. And so the Court rejected the Ninth Circuit's overly expansive view of the noncommercial use exclusion.

Further Remarks

Ultimately, this is a narrow decision, which was made simpler by the fact that VIP acknowledged that it used the Bad Spaniels mark and trade dress as source identifying features. Although the Court did not throw out the Rogers test, companies should be careful in relying on the doctrine for protection—especially if they are relying on Rogers beyond how it has been applied by the Second Circuit. Merely asserting that a use is "expressive," humorous, or a parody, is unlikely to be sufficient to avoid infringement if a consumer would interpret the use as having a source-designation function.

You can download the full Supreme Court decision here.

Footnote

1. Well, at least we eagerly anticipated the decision.

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