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The U.S. Supreme Court issued, on June 8, 2023, its decision in the much-watched Jack Daniel’s Properties, Inc. v. VIP Products LLC case (Case No. 22-148). The decision holds that the parody defense is not as all-encompassing as perhaps once believed, and that the Rogers test is not applicable in instances where a trademark is used as a designation of source for the infringer’s own goods. In the Jack Daniel’s case, the Supreme Court considered an appeal by Jack Daniel’s of an adverse ruling holding, in essence, that VIP’s squeaky, chewable dog toy de­signed to look like a bottle of Jack Daniel’s whiskey, was a parody and fair use of Jack Daniel’s trademarks in its distinctive Jack Daniel’s, bottle trade dress, and certain literal elements on the bottle’s label.

As background, the VIP “Bad Spaniels” chew toy was about the same size and shape as an ordi­nary bottle of Jack Daniel’s. Like the origi­nal, it had a black label with stylized white text and a white filigreed border. The words “Bad Spaniels” replaced “Jack Daniel’s” in a like font and arch. Above the arch is an image of a spaniel. Below the arch, “The Old No. 2 On Your Tennessee Carpet” replaced “Old No. 7 Tennessee Sour Mash Whiskey” in similar graphic form. The small print at the bottom substituted “43% poo by vol.” and “100% smelly” for “40% alc. by vol. (80 proof).” At the bottom was a disclaimer: “This product is not affiliated with Jack Daniel Distillery.” Once the chew toys started being sold, Jack Daniel’s demanded that the selling cease, to which VIP responded by seeking a declaratory judgement stating that there was neither infringement nor dilution of Jack Daniel’s trademarks.

VIP claimed that the so-called “Rogers test” mandated immediate dismissal of the infringement claim. The Rogers test is a threshold test developed by the Second Circuit that is used in claims of infringement by titles of “artistic works,” based on the view that such titles have an “expressive element” implicating “First Amendment values” and carry only a “slight risk” of confusing consumers about the “source or content” of the underlying work. VIP also contended that regarding Jack Daniel’s claim of dilution, because the “Bad Spaniels” product was a parody of the Jack Daniel’s mark, such that their use would qualify as a fair use under section 1125(c)(3)(A)(ii).

The District Court rejected both of VIP’s contentions, stating that VIP had used Jack Daniel’s trademarks to identify the source of their own products. The Court found that when this is the case, the Rogers test didn’t apply but, instead, the likelihood of confusion test is what should be used. Regarding the fair-use exclusion, the Court stated that parodies only fall within that exclusion when they do not use a famous mark to identify the source of the alleged diluter’s product. The District Court found that there was a likelihood of confusion as to the source of the product and, because of the negative connotation of the change in wording by VIP, that there would be harm to Jack Daniel’s reputation. On appeal, the Ninth Circuit reversed, remanding the case to the District Court to see if the prongs of the Rogers test could be met, and flat out awarded judgement on the dilution claim to VIP because it fell under the non-commercial use exclusion. On remand, the District Court found that Jack Daniel’s could not satisfy either prong of the Rogers test and granted summary judgement in favor of VIP. The Court of Appeals affirmed the decision, whereupon Jack Daniel’s sought certiorari, which the Supreme Court granted.

In its unanimous opinion, issued by Justice Kagan, the Supreme Court noted that the Rogers test has not in the past insulated, nor should it insulate, the use of trademarks as trademarks from ordinary trademark scrutiny. The Court found that Rogers had been confined to similar cases where the trademark was used not to designate a work’s source but, rather, solely to perform some other expressive function, and that the Rogers test has no proper application in instances where one uses another’s trademark as a trademark, which is to say, as an indicator of source origin. This inapplicability pertains even when there is an expressive function served by the mark in question, but where the mark is also used to designate a product’s source. The Court also found that by the Ninth Circuit’s logic of insulating humorous messages, few cases would ever get to the likelihood of confusion analysis, which is the test for trademark infringement (“confusion as to source is the ‘bête noire’ of trademark law”). VIP had conceded that it used its the “Bad Spaniels” trademark and the chew toy’s “bottle trade dress” as source identifiers and thus the Court needed to decide whether the “Bad Spaniels” trademarks and trade dress are likely to cause confusion, as there would be no shield from application of the Rogers test.

The Court held that likelihood of confusion is most likely to arise when someone uses another’s trademark as a trade­mark – meaning, again, as a source identifier – rather than solely for some other expressive function. On the issue of the potential defense of parody as a fair use of Jack Daniel’s marks, the Court found that a parody must “conjure up” “enough of an original to make the object of its critical wit recognizable.” Yet to succeed, the parody must also create contrasts, so that its message of ridicule or pointed humor comes clear. Where there is a successful parody, such a parody may obviate a finding of likelihood of confusion. The Court determined, however, that the Ninth Circuit’s expansive view of the “noncommercial use” exclusion regarding parody effectively nullified Congress’ express limitation on the fair-use exception, and found that VIP’s use of the Jack Daniel’s marks did not qualify as non-commercial use. The Court was clear that this was a narrow ruling and purposefully did not get into the validity of the Rogers test itself, only that in instances such as this one, it was inappropriate for Rogers to act as a shield. The Court remanded the case for consideration of the issue of the likelihood of confusion in a manner consistent with the Supreme Court’s ruling.

While narrow in scope, perhaps the biggest takeaways from the Supreme Court’s decision are that Rogers is not an automatic shield when the owner of an allegedly infringing mark that is arguably an “expressive work” uses that mark as an indication of source origin for the infringer’s own goods. As it relates to the issue of dilution, the “noncommer­cial use” exclusion to liability does not shield parody, criticism or other commentary typically associated with First Amendment protections (and trademark “fair use”) when the alleged diluter’s use of a mark is “as a designation of source for the person’s own goods or services.”