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

In long-running case involving trademark infringement and dilution stemming from dog toy company’s mocking imitation of Jack Daniel’s whiskey bottle, district court on remand finds that imitation does not constitute trademark infringement but does constitute dilution of Jack Daniel’s trademarks and trade dress.

VIP Products is the maker of “Silly Squeakers,” a line of chewable, squeaky, rubber toys for dogs. Most of the toys in the line are designed to resemble and parody popular alcoholic beverage brands. In 2014, VIP introduced the “Bad Spaniels” toy, which was designed to resemble and poke fun at the iconic Jack Daniel’s bottle. VIP used the same shape as a Jack Daniel’s bottle of whiskey, a font the same as or similar to the font used by Jack Daniel’s, replaced “Jack Daniel’s” with the rhyming “Bad Spaniels,” and replaced “Old No. 7 Brand Tennessee Sour Mash Whiskey” with “Old No. 2 on Your Tennessee Carpet.” Jack Daniel’s, which holds registered trademarks in the brand name “Old No. 7” and in the stylized label and the shape of the bottle, sent a cease-and-desist letter demanding that VIP stop selling the Bad Spaniels toy. In response, VIP brought suit, seeking a declaratory judgment that its product neither infringed nor diluted Jack Daniel’s trademarks. Jack Daniel’s, in turn, brought counterclaims under the Lanham Act for trademark infringement and trademark dilution.

In 2017, after a four-day bench trial, the district court found for Jack Daniel’s on both claims. The Ninth Circuit subsequently reversed, finding that—on the dilution claim—because Bad Spaniels was a parody, its uses of Jack Daniel’s marks were “noncommercial use[s]” and therefore were shielded from liability. As to the infringement claim, the Ninth Circuit vacated the district court’s ruling on the issue of consumer confusion, holding that Bad Spaniels was an expressive work protected by the First Amendment under Rogers v. Grimaldi. In June 2023, the U.S. Supreme Court rejected the Ninth Circuit’s decision and held that the Rogers test does not apply when an alleged infringer like VIP uses the mark to identify the source of its own goods. (Read our summary of the Supreme Court’s decision here.) 

The Supreme Court’s decision led to the parties filing cross-motions for judgment at the district court on both claims. On remand, the district court concluded that Jack Daniel’s proved dilution but not infringement, and it directed Jack Daniel’s to file a proposed injunction preventing VIP from advertising and selling Bad Spaniels.

As to dilution, the court first found that VIP waived the argument that the dilution claim “amounts to unconstitutional viewpoint discrimination [in violation of the First Amendment] by enjoining the use of a mark that ‘harms the reputation’ of a famous mark.” VIP cited recent Supreme Court decisions invalidating certain provisions of federal trademark law that barred registrations on disparaging marks and immoral or scandalous marks. However, because VIP did not previously raise this argument in its pleadings and did not amend its complaint to include it, VIP waived the argument. 

The court moved on to the three-factor dilution analysis of fame, similarity and reputational harm under the Trademark Dilution Revision Act. As to fame, the court found that Jack Daniel’s trademarks were “widely recognized by the general public [] by July of 2014”—prior to VIP’s use of Bad Spaniels. As to similarity of the marks, VIP did not contest the similarity and admitted to intentionally designing Bad Spaniels to closely mimic Jack Daniel’s whisky bottle.

As to reputational harm, the court recognized that reputational harm arises when the plaintiff’s mark is “linked to products of shoddy quality, or is portrayed in an unwholesome or unsavory context likely to evoke unflattering thoughts about the owner’s product.” Here, VIP replaced “40% alcohol by vol. (80 proof)” with “43% poo by vol.” and added “100% Smelly” below “Bad Spaniels.” The court acknowledged Jack Daniel’s expert’s opinion that the mentions of defecation, feces and poo create negative mental associations that harm Jack Daniel’s—and that it was particularly harmful to Jack Daniel’s “because the goods it offers for sale involve human consumption[,] and human consumption and canine excrement do not mix.” The court also added that VIP’s parodic intentions do not exempt it from a dilution claim. 

The court then moved on to analyze the infringement claim. Before the court looked at the likelihood of confusion—the core inquiry for infringement claims—the court recognized that a likelihood of confusion analysis is informed by whether the product is a successful parody. Accordingly, the court undertook a two-part analysis—first, whether VIP’s parody evokes the original, and then whether it “creates contrasts through humor adequate to dispel confusion as to the source of the parody.” The parties agreed in the affirmative on the first factor, but disagreed on the second. The court sided with VIP, finding that Bad Spaniels did not have to contain a “message of ridicule” directed at Jack Daniel’s in order to be a successful parody. Instead, it was visibly clear that Bad Spaniels humorously contrasts with Jack Daniel’s marks.

Recognizing that a successful parody is unlikely to be confusing, the court found no likelihood of confusion and thus no infringement. For example, when a defendant’s mark is a parody, the fact that a plaintiff’s trademarks are strong (the first factor under the likelihood of confusion analysis) does not weigh in favor of Jack Daniel’s.

The court also found that the similarity of the parties’ marks (the third factor) holds less weight because the similarities are necessary in order for Bad Spaniels to evoke Jack Daniel’s as a parody. Also, despite evidence of actual confusion (the fourth factor), the court recognized that the consumer surveys may not have accounted for the fact that Bad Spaniels is a parody product. As to the defendant’s intent in adopting the mark (the seventh factor), while VIP clearly intended to copy Jack Daniel’s trademarks, the court found that VIP’s intent was to create a parody product—not to deceive customers as to the source of VIP’s product. The court emphasized that “[a]n intent to parody is not an intent to confuse the public.”

The court concluded its opinion by recognizing the irony that “the more distasteful and crude the parody, the less likely it is that the public will mistakenly think that the trademark owner has sponsored or approved it.” Accordingly, the reasons why VIP violated the Lanham Act dilution provision were the very reasons that helped VIP defeat the trademark infringement claim.

Summary prepared by David Grossman and Alexander Loh