Dogfight: SCOTUS favours big brands in JD’s First Amendment clash

As the US Supreme Court finally delivered its decision on the high-profile Bad Spaniels case this week, many established brand owners across the US are likely to be breathing a sigh of relief.

In a resounding win for Jack Daniels— and arguably, corporate America—the court unanimously reversed a controversial lower court’s decision that a dog toy version of a Jack Daniel’s bottle did not infringe the whiskey brand’s trademarks because it was a parody.

At the heart of the much-scrutinised dispute was the question of whether a crudely themed toy, which associated the whiskey brand with ‘dog poop’, should be protected under the First Amendment of the US Constitution.

Federal Circuit erred

In response to Jack Daniel’s 2020 lawsuit, the toy maker, VIP Products, insisted that because its product is a parody, it is immune from infringement claims courtesy of this amendment and, more specifically, the Rogers test.

Named after an unsuccessful lawsuit filed by Ginger Rogers in Rogers v Grimaldi (1989), the test relates to a court's decision that a film featuring a cabaret duo who emulated the actress’ dancing partnership with Fred Astaire was an expressive work.

In a watershed ruling in 2022, the US Court of Appeals for the Ninth Circuit applied Rogers to VIP Products’ take-off on a Jack Daniel’s bourbon bottle, leading to its decision that the product did not infringe the whiskey maker’s trademarks.

But on June 8, SCOTUS justices held that the lower court had erred in its conclusion in the high-profile case.

Delivering the opinion on behalf of the court, Justice Elena Kagan held that the infringement issue is more substantial than the First Amendment issues invoked by VIP Products.

“We hold only that it is not appropriate when the accused infringer has used a trademark to designate the source of its own goods—in other words, has used a trademark as a trademark. That kind of use falls within the heartland of trademark law, and does not receive special First Amendment protection,” she wrote.

No laughing matter

Such a concise statement, backed by the entire SCOTUS bench, is a gift for brand owners—many of whom have been on tenterhooks since the emergence of the case.

For instance, Angela Wilson, counsel at Hershey, told WIPR that while the case may have involved low-brow humour, the dispute was no laughing matter.

“Infringers are using the First Amendment as a shield, and over the last couple of years, that's been a winning argument for many,” she says.

If Jack Daniel’s had failed to prevail, she adds, brand owners would have faced some bleak implications.

“We would have essentially had our hands tied anytime someone launched a product and injected even a small element of humour into the product or work,” she says.

“Essentially, we would have been unable to enforce our rights against that infringer. And it would have been nearly impossible for us to win in situations where the third party claims that their product is a joke.”

Lanham Act trumps Rogers

Jeff Handelman, partner at Crowell & Moring, agrees that the decision will be “applauded by brand owners” throughout the country.

As he points out, it essentially means that more trademark cases involving “expressive works” will have to bypass potential early dismissal under the Rogers test and confront the traditional likelihood-of-confusion test under the Lanham Act.

“In disagreeing with the Ninth Circuit’s approach, the court emphasised that the mere fact that a defendant’s use may communicate a humorous message— such as in a parody— does not convert an ordinary commercial product into an expressive work worthy of heightened First Amendment protection,” he explains.

“The very nature of the parody—which ‘conjures up’ the original but also pokes fun at it—often avoids confusion as to source or sponsorship. But the court made it clear that the Rogers test has no place when the defendant is using its mark in a source-identifying manner,” says Handelman.

Such uses, he explains, are subject to “normal trademark scrutiny” under the Lanham Act and SCOTUS has clarified that “must meet an infringement claim on the usual battleground of ‘likelihood of confusion’”.

Artistic merit

As Loeb & Loeb IP managing partner, Doug Masters, puts it: “No longer can those who want to exploit the goodwill associated with well-known brands claim that humour or parody avoid the usual analysis of whether such branding creates a likelihood of confusion or association.

“This properly positions the Second Circuit’s Rogers test as applying to expressive works where the challenged name identifies an artistic work, and not one where the alleged infringer claims to be offering a product or service commercially that somehow comments on or makes fun of the branded product.”

Nicole Haff, an IP and entertainment litigator at Michelman & Robinson, believes that consequently this development will have marked—and in some cases—severe ramifications for certain companies.

“There are many businesses whose entire business model is based on creating product lines that mock famous brands. In the wake of this decision, those businesses should promptly reevaluate their product lines,” she advises.

Haff goes on to say that one of the most interesting things the court did in this case is decline to decide whether the Rogers test is ever appropriate.

“This is notable because for more than three decades, the Rogers test has been the standard that courts throughout the country use to determine when trademark protection should apply to artistic works.”

A philosophical shift

Michael Keyes, partner at Dorsey, agrees with Haff that the ruling heralds a significant shift away from how lower courts throughout the country have approached cases involving IP rights and the First Amendment.

“Whereas a number of courts have held that ‘parody’ and similar uses by third parties is more or less acceptable (and justified) under the First Amendment, the court’s decision takes a much narrower view of the First Amendment when the third party parodist is selling a commercial product (as opposed to something like a piece of artwork),” he explains.

Additionally, he highlights how the court’s decision to protect the trademark owner in this case “seems philosophically aligned” with how it decided the issue in favour of the copyright owner in the Warhol v Goldsmith  decision last month.

“Just as the copyright holder prevailed in the Warhol case, so too did the trademark owner prevail today.”

“This may be indicative of a broader trend of the court protecting IP owners and looking more askance at those that copy and imitate those protected works,” adds Keyes.

On a more practical note, he adds that the ruling “paves the way for litigants to obtain relief in a much quicker time frame—which will be another welcome development for companies”.

A key hurdle

Mark Stallion, IP attorney at Greensfelder, notes that VIP’s efforts to embody a parody in an actual commercial product was a key hurdle that the toy maker was eventually unable to overcome.

“For example, if a motion picture featured a scene with two seedy individuals sharing a bottle of spirits, and when the camera zoomed in on the bottle of spirits, it bore a label identical to that of the VIP chew toy—then clearly there should be a winning argument for parody and First Amendment free speech.”

But, he adds, this is permissible because this scenario would involve “only one scene in a motion picture”: critically, the producer and screenwriter “clearly aren’t relying on the goodwill of the Jack Daniel’s brand for the purpose of promoting their film”.

This viewpoint chimes with the stance of the International Trademark Association, which argued that the test shouldn’t be applied to certain commercial products devoid of artistic merit.

Vijay Toke, partner at Rimon Law, wrote an amicus brief to that effect on behalf of the organisation, emphasising that circuit courts had become increasingly befuddled when it comes to applying Rogers correctly.

“In Jack Daniel’s v VIP Products, the Ninth Circuit took the test to an extreme, applying Rogers to a dog toy,” he told WIPR.

“This is really the first time that we saw the expansion of Rogers into a purely commercial product, and the US Supreme Court took the case because of the Ninth Circuit's expansion.”

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