Jack Daniel's Properties, Inc. v. VIP Products LLC

Jack Daniel's Properties v. VIP Products, decided June 8th, 2023. A unanimous Supreme Court, in an opinion by Justice Kagan, vacated the Ninth Circuit and held two things. First, the threshold First Amendment test from Rogers v. Grimaldi does not apply when an alleged infringer uses the challenged mark as a designation of source for its own goods. Second, the Lanham Act's noncommercial-use exclusion to dilution liability does not shield parody used that same way. Here's the brief.

VIP Products makes Silly Squeakers, a line of squeaky rubber dog toys that parody beverage brands. In 2014 it added Bad Spaniels — a toy shaped like a bottle of Jack Daniel's Old No. 7 Tennessee Sour Mash Whiskey. The jokes track the original. "Jack Daniel's" becomes "Bad Spaniels." "Old No. 7 Tennessee Sour Mash Whiskey" becomes "The Old No. 2 On Your Tennessee Carpet." And the small print trades "40% alc. by vol." for "43% poo by vol." Jack Daniel's Properties owns trademarks in the name, the arched logo, and the square bottle's trade dress.

After Jack Daniel's demanded that VIP stop selling the toy, VIP sued first, seeking a declaratory judgment that Bad Spaniels neither infringed nor diluted the marks. Jack Daniel's counterclaimed for infringement and for dilution by tarnishment. On summary judgment, VIP argued the infringement claim failed the Rogers test and that its parody was noncommercial fair use immune from dilution. The District Court rejected both and, after a bench trial, found likely confusion and reputational harm to Jack Daniel's. The Ninth Circuit reversed on both points — treating Bad Spaniels as an expressive work subject to Rogers, and holding the noncommercial-use exclusion shielded the parody from dilution.

Two questions reached the Court: whether the Rogers threshold governs the infringement claim, and whether the noncommercial-use exclusion defeats the dilution claim.

The Lanham Act defines a mark by its primary function — identifying a product's source and distinguishing it from others. Infringement turns on likelihood of confusion; dilution of a famous mark can succeed without it. Rogers v. Grimaldi is a threshold filter, devised by the Second Circuit for expressive works, that bars an infringement claim unless the challenged use has no artistic relevance or explicitly misleads as to source. The dilution provision, meanwhile, lists categories of use that are simply not actionable.

Two exclusions mattered: any noncommercial use of a mark, and fair use to parody or comment on a famous mark. But the fair-use exclusion carries its own limit — it does not reach a mark used to designate source.

The Court, unanimously, vacated and remanded. On infringement, it chose a narrow path, declining to decide whether Rogers is ever valid.

VIP had conceded that it used the Bad Spaniels name and dress as source identifiers — indeed, that it owned them as marks. Rogers, the Court explained, had always been a cabined doctrine, confined to uses that do not designate a work's source. When a mark is used as a mark, ordinary likelihood-of-confusion analysis does enough work to protect the interest in free expression.

That did not make the parody irrelevant. The Court stressed that a mark's expressive message can bear on confusion itself — a successful parody, by making its contrasts clear, is often less likely to confuse.

Whether Bad Spaniels is actually likely to confuse was left for remand. On dilution, the Court held the Ninth Circuit had read the noncommercial-use exclusion too broadly. Because parody used to designate source is expressly carved out of the fair-use exclusion, reading the noncommercial-use exclusion to shield it anyway would nullify that limit.

Two concurrences. Justice Sotomayor, joined by Justice Alito, wrote to caution that in parody cases courts should treat consumer surveys with particular care, lest well-funded brands wield them as a veto over mockery. Justice Gorsuch, joined by Justices Thomas and Barrett, wrote to warn lower courts to handle Rogers with care, noting that its source and its soundness remain unresolved.

The decision is deliberately narrow. The Court did not decide whether Rogers survives at all, how far the noncommercial-use exclusion extends, or whether Bad Spaniels is in fact confusing. Both holdings turn on a single hinge — whether the mark is being used to designate source. Where it is, the case belongs to ordinary trademark law: the First Amendment demands no special threshold, and parody is no automatic defense.

Jack Daniel's Properties, Inc. v. VIP Products LLC, 599 U.S. 140, decided June 8th, 2023. I'm John Goodhue. Thanks for watching.