Bad Spaniels Before the Supreme CourtHow the Case Could Affect the Tension Between the Lanham Act and the First Amendment
Daphne Benford-Smith | January 23, 2023
Trademarks are valuable assets that grant owners exclusive rights to use a mark as a source designator. However, recent case law may suggest that non-owners or junior users of a mark could have permission to use registered trademarks in a manner that would ordinarily be infringing if “artistic expression”, specifically parody, is claimed. Recent case law has raised tension between the First Amendment defense to trademark infringement, leading to the case now pending before the Supreme Court, Jack Daniels Properties, Inc. v. VIP Products, LLC.
The Ninth Circuit’s Heightened Confusion Standard
Jack Daniels Properties, Inc. (“Jack Daniels”), a well-renowned whiskey company and brand since 1875, has its name and unique whiskey bottle’s trade dress protected by federal trademark registrations that it zealously maintains and protects. VIP Products, LLC (“VIP”), an established dog toy company, created a squeaky dog toy called “Bad Spaniels” that replicates the make and design of Jack Daniels’ iconic whiskey bottle and incorporates clever and whimsical dog-related puns which recall the labeling on the Jack Daniels bottle (43% Poo by Vol., Bad Spaniels, the Old No. 2 on your Tennessee Carpet, and 100% Smelly). Although VIP claims its product is simply a humorous toy, Jack Daniels was not amused and sent a cease-and-desist letter to VIP claiming trademark infringement and dilution. Shortly thereafter, VIP initiated suit in a federal court in Arizona seeking a declaration that the Bad Spaniels dog toy did not infringe or dilute Jack Daniels’ trademark or trade dress.
The district court found that VIP had infringed Jack Daniels’ rights and completely rejected VIP’s First Amendment defense due to the dog toy being a commercial product. On appeal, however, the Ninth Circuit reversed and remanded the decision, finding that the district court failed to apply the standard set forth in Rogers v. Grimaldi which determines whether a protected trademark can be used in works of artistic expression. In applying the Rogers standard, the Ninth Circuit opined that the dog toy was a parodic artistic expression even though it was being sold commercially. As a result, Jack Daniels would have to demonstrate a heightened level of confusion to overcome First Amendment claims.
The Ninth Circuit’s treatment of the First Amendment defense to trademark infringement has been criticized as being too broad and allowing virtually any junior use of a mark to claim parody as a means of avoiding the Lanham Act’s lower likelihood of confusion standard. As stated by renowned trademark law expert Thomas McCarthy in a TTABlog comment concerning the Jack Daniels decision:
“[T]he Ninth Circuit stretched way too far the concept of what qualifies as an expressive work entitled to free speech treatment under the Rogers analysis. Stretching “expressive works” to include ordinary consumer products potentially encompasses just about everything. If a dog toy qualifies as an “expressive” work immune from trademark infringement, then why not a box of breakfast cereal containing “expressive” images of a brand mascot, graphics or slogans? Applying the Ninth Circuit’s view, the label on almost any ordinary consumer product could be argued to contain some “expressive” message. What kinds of products remain subject to traditional trademark liability? I think the Ninth Circuit improperly cut adrift the Rogers’ rule from its basic rationale and purpose.”
Many circuits have adopted the Rogers standard in cases involving the parody defense to trademark infringement. In Rogers, the Second Circuit found that a film called “Ginger and Fred,” involving two Italian dancers imitating the famous dancing duo Ginger Rogers and Fred Astaire, was artistic expression not subject to the narrow scrutiny of the Lanham Act. Particularly, the court found that the Lanham Act should not apply “unless the title has no artistic relevance to the underlying work whatsoever, or, if it has some relevance, unless the title explicitly misleads as to the source or content of the work.”
Although the Second Circuit in Rogers stated that a First Amendment defense is not an “absolute” defense, the Ninth Circuit’s “heightened confusion standard” runs afoul of becoming an unconquerable defense. This heightened standard applied by the Ninth Circuit, is what ultimately caused the Bad Spaniels case to land before the Supreme Court. One of the questions presented before the Supreme Court is whether there is a circuit split that warrants Supreme Court intervention. But are the circuits really split in their application of the First Amendment defense to trademark infringement cases? Looking at recent decisions from other circuits may shed light on this inquiry.
Recent Decisions in Other Circuits
In April 2022, the Second Circuit handed down a decision in Vans, Inc. v. MSCHF Prod. Studio Inc. that demonstrates its current interpretation of the parody defense in trademark infringement cases. Brooklyn-based art collective MSCHF created the “Wavy Baby” shoe, reminiscent of the well-recognized Vans “Old Skool” shoe design, but incorporating a “wavy” sole and stripe on the side of the shoe. To promote the shoe, MSCHF collaborated with famous rapper Tyga and created a commercial where Tyga puts an “Old Skool” Vans shoe in a microwave and out pops a “Wavy Baby” shoe. Vans sued for trademark infringement and dilution under both federal and state law. As part of their defense, MSCHF claimed that the shoe was a parody meant to “critique consumer culture and Vans’ outsized role in that culture.”
The Second Circuit used their reasoning set forth in Harley Davidson v. Grottaneli (where defendant used Harley Davidson’s mark to sell their own motorcycle products) to find that “while courts have considerable leeway to parodists whose expressive works aim their parodic commentary at a trademark or a trademarked product…. [they] have not hesitated to prevent a manufacturer from using an alleged parody of a competitor’s mark to sell a competing product.” In other words when a junior user infringes to sell a competing product, it is considered an unsuccessful parody not entitled to First Amendment protection. The Second Circuit distinguished this from “successful parodies,” where junior users use another’s trademark in a way that is not connected with the original trademark owner. The parody must “communicate some articulable form of satire, ridicule, joking, or amusement.” In this case, the Second Circuit found that even though MSCHF made commentary about the shoe on other sources such as interviews and podcasts, the shoe in and of itself did not communicate ridicule of consumer culture. Thus, the Second Circuit found that there was confusion between MSCHF’s “Wavy Baby” shoe and Vans’ “Old Skool” shoe and that the confusion outweighed First Amendment consideration.
One of the most interesting aspects of this case is that MSCHF used the Ninth Circuit’s decision in Jack Daniels to bolster their defense, arguing that the Wavy Baby shoe is a form of parodic artistic expression and that Vans must demonstrate a heightened level of confusion to overcome MSCHF’s First Amendment claim. The Second Circuit distinguished MSCHF’s use from VIP’s use, stating that VIP was not competing in the same market as Jack Daniels and that VIP’s product was a parody because it was “discernible and overt” and that there were “clear distinctions between the products.” Because the Second Circuit applied the Ninth Circuit’s logic, this may suggest that there is no circuit split on the application of the parody defense to infringement cases.
Another case pending in the Second Circuit is Hermès Int’l v. Rothschild, where artist Mason Rothschild is being sued by Hermès for his “MetaBirkin” NFTs. The MetaBirkin NFTs are digital versions of the coveted Hermès Birkin bag that are covered with patterns and textiles created by Rothschild. As done by most defendants in these types of cases, Rothschild filed a 12(b)(6) motion to dismiss claiming that the Rogers test applied due to First Amendment considerations and that based on the pleadings he met the Rogers test. While the Second Circuit agreed that the Rogers test was relevant to the case, the court found that there were enough factual allegations in the complaint for Hermès to survive the motion to dismiss.
Particularly, the court found that Rothschild’s comments such as wanting to “pay tribute to Hermès’ most famous handbag” and “want[ing] to see as an experiment if he could create that same kind of illusion that the Birkin Bag has in real life,” indicated that he intended to associate MetaBirkin NFTs with the goodwill and popularity of Hermès’ mark rather than developing unique artistic expression. Further, the court found that there were enough factual allegations in the complaint to go to the “explicitly misleading” prong of the Rogers test. The court also noted that Rothschild’s comments including “there’s not much difference between owning a Birkin and MetaBirkin” and “the difference between the two is getting a little blurred,” could possibly meet the “explicitly misleading” element. Thus, unlike precedent in the Ninth Circuit, the Second Circuit found that the Lanham Act could be applicable, and the case would need to continue before it could make a final determination. Rothschild attempted an interlocutory appeal of the decision but it was denied. This case is still ongoing and could certainly be affected by the Supreme Court’s decision in Jack Daniels.
Another key case involving First Amendment claims and trademark rights is In Re: Steve Elster, involving a trademark applicant who attempted to trademark the phrase TRUMP TOO SMALL in Class 25 for use on t-shirts. The examining attorney and ultimately the TTAB rejected the application for violation of section 2(c) or using a name that identifies a particular living individual without the individual’s written consent. The applicant appealed to the Federal Circuit, arguing that barring his application based on section 2(c) was unconstitutional as it restricted his First Amendment rights. The Federal Circuit agreed with the applicant, holding that the TTAB’s application of 2(c) and refusal to register the mark was unconstitutional, reversing the TTAB’s decision that the mark was unregistrable. The USPTO sought a panel hearing or rehearing en banc which was ultimately denied.
In coming to its determination, the Federal Circuit stated that this case “involves content-based discrimination that is not justified by either a compelling or substantial government interest” and that a “trademark represents private, not government speech” entitled to some form of First Amendment protection. Although not technically involving a “heightened confusion standard,” it is clear that there is still a heightened requirement (in this case a “compelling or substantial government interest”) which curtails a party’s ability to utilize the Lanham Act’s safeguards in cases where the First Amendment is also considered. Once again, this seems to support the notion that there is evidence of a trend within the circuits to apply a heightened confusion standard when the First Amendment is involved.
Other circuits, including the Third, Fifth, Sixth, and Eleventh Circuits have applied the Rogers test but not all of these circuits have formally adopted Rogers when matters involve the Lanham Act and the First Amendment. For example, in a 2019 case in the Third Circuit, Hidden City Philadelphia v. ABC, Inc., the court used the Rogers test to find that ABC’s use of the mark HIDDEN PHILADELPHIA was not subject to the lower likelihood of confusion standard due to First Amendment protection. That case involved title vs. title, which is the only time the Third Circuit uses the Rogers balancing test for First Amendment consideration. For other forms of artistic expression, they utilize tests that are narrower than the Ninth Circuit’s application. However, where Rogers applies, the Third Circuit (as well as the others mentioned) utilize the “heightened confusion standard” similar to the Ninth Circuit.
What This Could Mean for Future Matters
The Second and Ninth circuits are among the most influential and dominant circuits on cases involving the First Amendment and the Lanham Act. Other jurisdictions have relied on their decisions in determining how they will handle cases that involve balancing these competing interests. Although there are variations of when Rogers will apply in balancing these interests within the circuits, there appears to be some uniformity of how Rogers is applied. While many appreciate that First Amendment freedom of expression is being considered and protected, others are equally concerned that First Amendment claims are diminishing the benefits of owning a trademark.
With the current climate of the Supreme Court, there is no telling how the issues set forth in Jack Daniels will be resolved. However, the implications of the decision will be massive. If the Court decides that the circuit courts have similarly applied Rogers in these cases, then it will escape deciding the issue. This could lead to forum shopping in the Ninth Circuit for junior users hoping to avoid application of the lower likelihood of confusion standard. However, if the Court decides that there isn’t enough uniformity of the application of Rogers, then it could solidify a balancing test that will be used across the federal courts. This could result in an absolute defense for defendants or junior users, or it could result in a more uniform balancing test that equally considers both the Lanham Act and First Amendment with carved out exceptions. So, it’s hard to say if this solidification would ease the anxieties of trademark owners and attorneys, but it would surely affect the decades-long tension between the Lanham Act and the First Amendment.