By: Giulia Lima
Pro Bono Chair for the Delaware Journal of Corporate Law
In today’s day and age, everything seems to have a parody version of it. Consumers usually greet these parodies with a laugh and an understanding of their satirical nature. This legal situation takes a surprising approach as it does not seem to follow the natural consumer reaction to a parody, but rather the opposite.
In this lawsuit, VIP Products, Inc. (“VIP”) made a chewable dog toy that was designed to resemble a bottle of Jack Daniel’s whiskey.[2] The product changed the traditional “Jack Daniel’s” wording to “Bad Spaniels” and the phrase “‘Old No. 7 Brand Tennessee Sour Mash Whiskey’ turned into ‘The Old No. 2 On Your Tennessee Carpet.’”[3] Jack Daniel’s Properties argued that this infringed and diluted their trademarks of the bottle, the words, and the graphics on the label by making consumers believe Jack Daniel’s created the dog toy, and by associating the whiskey with dog waste.[4]
The Court of Appeals did not agree with arguments.[5] The court utilized the First Amendment threshold test for an infringement suit and stated that this test defeated Jack Daniel’s claim even if there may be a likelihood of confusion.[6] Furthermore, the [7] While this result may be what is typically expected, the United States Supreme Court rejected both conclusions.[8]
To begin, the Lanham Act defines a trademark as “‘[a]ny word, name, symbol, or device, or any combination thereof’ that a person uses ‘to identify and distinguish his or her goods … from those manufactured or sold by others and to indicate the source of the goods.’”[9] Ultimately, what makes a trademark is the ability of a consumer to use it to identify the source of the product. This allows consumers to easily identify what goods they wish to purchase or avoid based on their familiarity with similarly marked products previously. Additionally, producers can use trademarks to gain financial rewards due to the mark’s good reputation.[10] The Lanham Act creates a federal cause of action for trademark infringement if the use is “likely to cause confusion, or to cause mistake, or to deceive” and confusion as to the source of the product is the most common.[11] It also creates a federal cause of action for the dilution of famous marks. Famous marks are defined as widely recognized by the public as designating the source of the goods.[12] Dilution can occur “by tarnishment” or when there is a similarity between the two marks and this association may harm the reputation of the famous mark.[13] There are exclusions such as for parody or noncommercial use, but these exclusions do not apply if the defendant is using the mark “as a designation of source for the [defendant’s] own goods.”[14]
Most everyday consumers can easily identify a Jack Daniel’s bottle due to its distinguished marks and design. Here, VIP utilized this established consumer knowledge and familiarity to create their line of dog toys that resemble many famous bottles and drinks, including the Jack Daniel’s bottle. When VIP’s product was released, Jack Daniel’s sent VIP a letter demanding that they stop selling the product.[15] VIP responded by bringing this lawsuit seeking a declaratory judgment that their product did not infringe nor dilute the Jack Daniel’s trademarks and Jack Daniel’s counterclaimed, asserting the Lanham Act.[16]
Addressing the infringement claim, the United States Supreme Court explained that there is no need to satisfy the threshold test that the Court of Appeals considered “before the case could proceed to the Lanham Act’s likelihood-of-confusion inquiry” especially when the trademark infringement is used as a designation of source, which the Lanham Act mainly focuses on.[17] The Court explained that a parody must utilize enough of the original to make it recognizable but must create enough contrast so that the humor and ridicule are clear.[18] If this is done, then there is no likelihood to create confusion because it is assumed that a brand would not participate in self-mockery.[19] The Court remanded this issue to the court below to consider VIP’s efforts to ridicule and assess the likelihood of confusion.[20]
The Court also addressed the dilution by tarnishment claim. Here, the United States Supreme Court determined that the District Court correctly concluded that VIP could not use the “fair use” exclusion because it specifically states that the exclusion does not apply to parodies of famous marks when it is used “as a designation of source for the person’s own goods or services,” which VIP was doing.[21] The Ninth Circuit did not go against this conclusion and instead utilized the “any noncommercial use of a mark” exclusion.[22] This approach reversed the statutorily directed result because the “fair use” exclusion provides that parody is exempt only if it is not used to designate a source. But this expansive view by the Ninth Circuit means parody would always be exempt.[23] Ultimately, the Supreme Court stated that the noncommercial exclusion interpretation is correct, as the Lanham makes the source-designation crucial.[24] The case was then remanded for further proceedings using this interpretation.[25]
The United States Supreme Court does not usually take issues of trademark law, so this case proves to be very distinct and will likely impact lower courts’ decisions throughout the country. It will be enticing to see how this decision over whiskey and dog toys makes a large impact on trademark law and helps shape the discussion surrounding parodies. It is difficult to say if this will lead to a world with fewer parody products, but it has brought serious attention to this issue for both consumers and producers. This will likely impact corporate law and how corporations act going forward as they may make specific choices to protect their trademarks. Additionally, corporations must be extra careful to not infringe or dilute another company’s trademarks since cases like this show it can create real controversies even if its intentions were a joke.
About the Author
Giulia Lima is a third-year law student at Widener University Delaware Law School and is the Pro Bono Chair on the Delaware Journal of Corporate Law. She received her bachelor’s degree from Widener University with a major in International Business and minor in Marketing. During her time in law school, she has interned at the NJ Attorney General’s office and has served as Vice President of the Women’s Law Caucus as well as Vice President of Public Relations of the Student Bar Association. Giulia enjoys traveling and learning about new cultures. Following graduation, Giulia plans to sit for the July 2024 New Jersey bar exam and begin her career as an attorney at Comegno Law Group in Moorestown, New Jersey.
[1] Credit for title image goes to Tookapic. See Tookapic, Pixabay, https://pixabay.com/photos/whiskey-bottles-jack-daniels-932260/ (last visited Mar. 19, 2024).
[2] Jack Daniel’s Properties, Inc. v. VIP Prod. LLC, 599 U.S. 140, 144 (2023).
[3] Id.
[4] Id.
[5] Id. at 145.
[6] Jack Daniel’s Properties, Inc., 599 U.S. at 145.
[7] Id.
[8] Id.
[9] Id.
[10] Jack Daniel’s Properties, Inc., 599 U.S. at 146.
[11] Id. at 147.
[12] Id.
[13] Id.
[14] Jack Daniel’s Properties, Inc., 599 U.S. at 148.
[15] Id. at 150.
[16] Id.
[17] Id. at 153.
[18] Jack Daniel’s Properties, Inc., 599 U.S. 161.
[19] Id.
[20] Id.
[21] Id. at 161–62.
[22] Jack Daniel’s Properties, Inc., 599 U.S. at 161–62.
[23] Id. at 162.
[24] Id.
[25] Id. at 163.