Supreme Court Decision Strengthens Brand Holders' Ability To Protect Their Trademarks Against Alleged Parodies

• Published date: 14 June 2023
• Subject Matter: Intellectual Property, Trademark
• Law Firm: Mayer Brown
• Author: Mr Richard Assmus, Michael Adams, Jonathan W. Thomas, Todd A. Davidovits and Daniel Virtue

In a unanimous decision, the Supreme Court issued an important ruling on June 8, 2023 that will strengthen brand holders' ability to enforce their trademark rights against unauthorized commercial uses claiming protection under the First Amendment. Jack Daniel's Properties v. VIP Products, No. 22-148. In particular, the Supreme Court reversed a 9th Circuit decision permitting an allegedly parodic dog toy sold as "Bad Spaniels"'a play on the whiskey brand "Jack Daniel's"'to escape any Lanham Act liability under theories of infringement or dilution.

The Lanham Act creates causes of action for trademark infringement and dilution. In a typical infringement case, a court asks whether the defendant's use of a mark is "likely to cause confusion, or to cause mistake, or to deceive." 15 U. S. C. ' 1114(1)(A), 1125(a)(1)(A). Where "expressive works" that use a trademark are involved, the Second Circuit created the "Rogers test" to protect First Amendment values of free speech. See Rogers v. Grimaldi, 875 F. 2d 994, 999 (2d. Cir. 1989) (Newman, J.).To apply the Rogers test, the court asks whether the trademark holder seeking to enjoin the trademark use can demonstrate (1) that the challenged use of a mark "has no artistic relevance to the underlying work" or (2) that it "explicitly misleads as to the source or the content of the work." Id. at 999.

Trademark dilution generally exists where a party uses another's famous trademark in a way that "harms the reputation" of the trademark via blurring and/or tarnishment. 15 U.S.C. ' 1125(c)(2)(A), (C). However, the Lanham Act excluded "noncommercial use of a mark" from dilution liability. Id. at ' 1125(c)(3)(C). This is a form of "fair use" that protects parody, criticism, and commentary on a famous trademark from dilution liability.

In the case of Jack Daniel's Properties v. VIP Products, VIP Products ("VIP") makes a squeaky, chewable dog toy designed to "parody" the look of a Jack Daniel's-brand whiskey bottle. For example, the words "Jack Daniel's" become "Bad Spaniels," and "Old No. 7 Brand Tennessee Sour Mash Whiskey" turns into "The Old No. 2 On Your Tennessee Carpet." Jack Daniel's demanded VIP stop marketing the product.

VIP responded to Jack Daniels' demand by filing a declaratory judgment lawsuit, asking a court to declare that its "Bad Spaniels" dog toy did not infringe the famous Jack Daniel's trademark. Jack Daniel's counterclaimed, arguing that VIP's use infringed and diluted its famous JACK DANIEL'S...