VIP Products: Not As Smooth As Tennessee Whiskey

The party is on in Lynchburg, Tennessee this weekend. In a unanimous decision authored by Justice Kagan, the Supreme Court held that the threshold First Amendment protections afforded by the “Rogers Test” do not apply where an alleged infringer uses a mark as a designation of source for the infringer’s own goods. In doing so, the Supreme Court paved the way for Jack Daniel’s to continue its enforcement efforts against VIP Products, a manufacturer of chewable dog toys which, as displayed below, may (or may not) bear some semblance to Old No. 7:

Before the case reached the Supreme Court, the Ninth Circuit concluded that, with respect to Jack Daniels’ infringement claim, because the products sold by VIP were “expressive” in nature, the threshold “Rogers Test” applied and, as a result, Jack Daniels could not pursue its infringement claim unless it could demonstrate either that the challenged use of the mark: (i) “has no artistic relevance to the underlying work;” or (ii) “explicitly misleads as to the source or the content of the work.” And with respect to Jack Daniel’s trademark dilution claim, the Ninth Circuit concluded that it too failed reasoning that, under the statute, the “noncommerical” use of a trademark shields liability for trademark dilution. On remand, looking through the lens of the Ninth Circuit’s analysis, Jack Daniels was not able to demonstrate that either Rogers exception applied and lost summary judgment.

Undeterred, Jack Daniels appealed to the Ninth Circuit which summarily affirmed. It was not until the Supreme Court reviewed this matter that VIP Products’ win streak came to a sobering halt. With respect to Jack Daniels’ infringement claim, the Supreme Court concluded that the “Rogers Test” does not merit consideration when the 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.” In concluding that VIP Products used marks derived from Jack Daniels as a source identifier, the Supreme Court held that Jack Daniel’s infringement claim should turn, instead, on traditional principals of likelihood of confusion which, as explained by Justice Kagan, is “not blind to the expressive aspect” of VIP’s products. To draw the distinction between the use of a mark in an expressive context and as a source identifier, the Supreme Court offered the following example:

Suppose a filmmaker uses a Louis Vuitton suitcase to convey something about a character (he is the kind of person who wants to be seen with the product but doesn’t know how to pronounce its name). Now think about a different scenario: A luggage manufacturer uses an ever-so-slightly modified LV logo to make inroads in the suitcase market. The greater likelihood of confusion inheres in the latter because it is the one conveying information (or misinformation) about who is responsible for a product.

With respect to Jack Daniels’ dilution claim, the Supreme Court concluded that not “every parody or humorous commentary” can fall within the non-commercial use exclusion to trademark dilution claims. Specifically, the Supreme Court looked to the “fair use” exclusion which contains a carve-out for the use of a famous mark by another as a source identifier, to conclude that “the non-commercial exclusion does not shield parody or other commentary when its use of the mark is similarly source-identifying.”

The Supreme Court concluded that its holdings on both the trademark infringement and dilution claims turned on whether the alleged infringer was using the marks at issue in a “source-designation function.” The Supreme Court found this to be the key inquiry because the nature of the alleged infringer’s use is critical in ensuring “that consumers can tell where goods come from.” The Supreme Court remanded the matter for further proceedings consistent with its opinion. Accordingly, only time will tell whether Jack Daniels will achieve the same result it did at the first trial – that is, a determination that consumers would likely be confused by VIP Products’ chewable dog toys.