In a big win for brand owners, on June 8, 2023, the U.S. Supreme Court held that alleged trademark infringers that use a similar or identical trademark of another to designate source or origin of its own goods or services will be unable to avoid a likelihood of confusion analysis by claiming that their infringement is "expressive" (i.e., in this case an alleged "parody") and protected by the First Amendment. The Court also held that there is no parody defense in response to a trademark dilution claim if the term at issue is used as a source identifier by the junior user.
In Jack Daniel's Properties, Inc. v. VIP Products LLC, VIP Products manufactured a dog toy called "Bad Spaniels," mimicking the Jack Daniel's Old No. 7 Brand Tennessee Sour Mash Whiskey bottle. Jack Daniel's sued for trademark infringement and dilution. In response, VIP Products invoked the Rogers v. Grimaldi defense arguing that because the chew toy was artistic expression, i.e., because it made fun of Jack Daniel's, it was protected by the First Amendment. The Supreme Court rejected that defense in the narrow context of when a term is used as a trademark to identify the source of goods.
The Supreme Court held that because VIP Products used BAD SPANIELS as a trademark to identify the source of its own goods, VIP Products is not entitled to protection from trademark infringement claims under the First Amendment. In analyzing the Rogers test—which provides a "freedom of expression" defense if a junior party's use of a trademark has "artistic relevance" to the underlying work and use of the trademark is not "explicitly misleading" as to the source of the work—the Supreme Court held that Rogers "does not [apply] when an alleged infringer uses a trademark in the way the Lanham Act most cares about: as a designation of source for the infringer's own goods."
The Court's application of Rogers differs from the Ninth Circuit's, which held that because VIP Products' chew toy conveys a humorous message, it is automatically entitled to First Amendment protection under Rogers. The Court warned that the Ninth Circuit's view "might take over much of the world" if applied broadly and noted that "[w]hen a mark is used as a mark (except, potentially, in rare situations), the likelihood-of-confusion inquiry does enough work to account for the interest in free expression."
For dilution claims, the Supreme Court held that VIP Products' use of the BAD SPANIELS trademark does not meet the fair use carve out for use that parodies, criticizes, or comments upon a famous mark owner because VIP Products used BAD SPANIELS as a designation of source of its goods. According to the Supreme Court, Congress intended the Fair Use carve-out only to apply when the expression is not used to designate source.
The Supreme Court remanded the case back to the district court to conduct a likelihood of confusion analysis. The district court will now decide whether consumers are likely to be confused as to the source of the goods, i.e., whether consumers are likely to believe that Jack Daniel's is the source of the goods or has sponsored, licensed, or is otherwise affiliated with the BAD SPANIELS chew toy. The district court will also decide whether the BAD SPANIELS mark dilutes the distinctiveness of the JACK DANIEL'S mark and trade dress.
After today's decision, alleged infringers may still have the ability to assert a parody defense for infringement claims, but courts will now undertake a proper confusion and parody analysis under the relevant circuit standard without applying Rogers. At the same time, the parody defense is not available for dilution.
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