Going to the dogs: the Ninth Circuit’s erosion of trademark rights exclusive guest post – World Trademark Review

InVIP Products LLC v Jack Daniels Properties Inc, the US Court of Appeals for the Ninth Circuit has held that a dog toy meant to humorously evoke a bottle of whiskey was a protectable expressive work. In this guest post, Christian W Liedtke, partner at acuminis and co-author of an amicus brief submitted by INTA seeking en banc review of the decision, argues that the ruling, as it presently stands, is alarming and opens the floodgates to widespread theft of goodwill under the guise of the First Amendment.

VIP Products LLC v Jack Daniels Properties (18-16012 (9th Cir 31 March 2020)) is a case between VIP Products, one of the largest makers of dog toys and other pet accessories in the United States, and defendant Jack Daniels Properties, operator of the oldest whiskey distillery in the United States and owner of trademarks and trade dress appearing on Jack Daniels Tennessee whiskey. While the parties respective businesses could scarcely appear more different on the surface, they intersected thanks to a dog toy sold by VIP as the Bad Spaniels Silly Squeaker.

The Bad Spaniels Silly Squeaker toy is fashioned after a bottle of Jack Daniels Old No 7 Black Label Tennessee Whiskey; however, the toy includes a variety of dog-themed alterations. Specifically, the Bad Spaniels Silly Squeaker is meant to suggest that the whiskey has been replaced with dog feces. Along those lines, while the script on a Jack Daniels bottle would read Old No. 7, that language was replaced on the Bad Spaniels Silly Squeaker with Old No. 2 followed immediately by the words On Your Tennessee Carpet, instead of Tennessee Sour Mash Whiskey. Similarly, while the label on a Jack Daniels bottle would read 40% ALC. BY VOL. (80 PROOF), that language was replaced on VIPs Bad Spaniels Silly Squeaker with a label that reads 43% POO BY VOLUME and 100% SMELLY.

It should be noted that, on the back of the packaging for the Bad Spaniels Silly Squeaker toy, it states: This product is not affiliated with Jack Daniels. An image of the bottle toy adjacent to a Jack Daniels bottle is reprinted below.

Around September 2014, Jack Daniels sent VIP a cease and desist letter, demanding, inter alia, that VIP stop selling the Bad Spaniels Silly Squeaker toy. Shortly after receiving the Jack Daniels demand, VIP instituted a declaratory judgment action against Jack Daniels, seeking a declaration that:

In addition, VIP sought cancellation of the Jack Daniels USPTO registration for the configuration and shape of its whiskey bottle.

Responding to VIPs declaratory judgment suit, Jack Daniels counterclaimed with various state and federal claims for, inter alia, trademark and trade dress infringement, trademark dilution (by tarnishment, but not by blurring) and false designation.

The parties cross moved for summary judgment. In its motion, VIP argued that the infringement and dilution claims should be dismissed in light of its defences of nominative and First Amendment fair use. VIP further argued that, even without those defences, Jack Daniels could not prove its dilution claims or that the JACK DANIELS trademarks and trade dress were functional and/or non-distinctive.

In response to VIPs motion, Jack Daniels argued that the fair-use defences were inapplicable. Jack Daniels further argued that its trade dress was non-functional and distinctive as a matter of law, and urged the District Court to leave for trial its dilution claims.

The District Court rejected VIPs attempt to rely on a First Amendment fair-use defence by concluding that the Bad Spaniels Silly Squeaker toy was not an expressive work. Notably, the Ninth Circuit has utilised the phrase expressive works instead of artistic works since Brown v Electronic Arts, Inc (724 F.3d 1235, 1241 (9th Cir 2013)). In rejecting VIPs defence, the District Court applied the Rogers test, first articulated by the Second Circuit in Rogers v Grimaldi (875 F.2d 994 (2d Cir 1989). As interpreted by the District Court, the Rogers test applies to artistic or expressive works such as movies, plays, books and songs, and requires courts to construe trademark law only where the public interest in avoiding consumer confusion outweighs the public interest in free expression. The District Court determined that the First Amendment affords no protection to VIP because it is trademark law that regulates misleading commercial speech where anothers trademark is used for source identification in a way likely to cause consumer confusion.

In its analysis, the District Court compared the case to a 2002 case from the Southern District of New York, Tommy Hilfiger Licensing v Nature Labs (221 F Supp 2d 410 (SDNY 2002)). In Tommy Hilfiger, First Amendment protections were determined not to apply to Timmy Holedigger, a dog perfume designed to be a parody of the TOMMY HILFIGER trademark, because Tommy Holedigger was meant, at least in part, to promote a somewhat non-expressive, commercial product.

The case between VIP and Jack Daniels continued to trial. At the end of a four-day bench trial, the District Court ruled for Jack Daniels and issued a permanent injunction enjoining VIP from manufacturing and selling the Bad Spaniels Silly Squeaker toy.

VIP appealed and had some success in the Ninth Circuit. In light of its determination that the Bad Spaniels Silly Squeaker toy was an expressive work, the Ninth Circuit also reversed the District Courts decision on dilution by tarnishment. According to the Ninth Circuit, the Bad Spaniels Silly Squeaker toy used the Jack Daniels design and mark to convey a humorous message, and that message was protected by the First Amendment. The Ninth Circuit accordingly held that VIP was entitled to summary judgment on the federal and state trademark dilution claims.

On 22 April 2020, INTA filed an amicus curiae brief in support of the Jack Daniels request for en banc review of this case centered around two arguments. First, INTA highlights that the Ninth Circuits application of the Rogers doctrine to commercial goods is unprecedented. Second, it argues that the Ninth Circuit failed to apply the precedent set by the Supreme Court in Bolger v Youngs Drugs Prods Corp (463 US at 66-67) when making its determination that the Bad Spaniels toy constituted non-commercial use.

This week, on 26 May, a group of law professors filed an amicus curiae brief in support of VIP also advancing two arguments. First, the law professors argue that the Ninth Circuit properly applied the Rogers test and that the Bad Spaniels dog toy was correctly considered non-commercial and thus exempt from trademark infringement liability. Second, perhaps more dramatically, the law professors argue that the concept of dilution by tarnishment is unconstitutional.

The Ninth Circuits decision, as it presently stands, is alarming and goes beyond allowing dogs to do their business all over brand equity; it opens the floodgates to widespread theft of goodwill under the guise of the First Amendment.

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Going to the dogs: the Ninth Circuit's erosion of trademark rights exclusive guest post - World Trademark Review