On January 23, 2025, the United States District Court for the District of Arizona issued a final decision ending the intensely disputed, decade-long litigation between Jack Daniel's Properties, Inc. and VIP Products LLC.[1] Concluding the saga, Jack Daniel's obtained a partial victory against VIP's "Bad Spaniels" squeaky dog toy, intended to mimic a Jack Daniel's bottle of whiskey. The district court held that, while Bad Spaniels tarnished Jack Daniel's trademarks, it did not infringe them, because Bad Spaniels was conceived and used as a "successful" parody.
1. Background: Digging up the Past
The saga began on September 16, 2014, when VIP filed an action for declaratory judgment seeking a declaration that its "Bad Spaniels" Silly Squeaker dog chew toy neither infringed nor diluted Jack Daniel's trademark rights to its black label whiskey. Jack Daniel's counterclaimed and sought to enjoin VIP's sale of the Bad Spaniels toy under the Lanham Act, alleging that the product confused consumers as to the source of the toy and thus infringed Jack Daniel's trademarks and trade dress. Jack Daniel's also asserted that the use of similar marks on Bad Spaniels referencing dog excrement created negative associations with the famous Jack Daniel's marks, constituting dilution by tarnishment.
Following the initial 2017 bench trial, Judge McNamee of the Arizona district court awarded Jack Daniel's a permanent injunction against VIP, based on its finding that the Bad Spaniels dog toy was likely to confuse consumers as to source, constituting trademark infringement, and because the poop-themed references on the toy tarnished the Jack Daniel's trademarks and trade dress. On appeal, the Ninth Circuit reversed the district court's judgment on dilution by tarnishment and vacated the infringement finding because the district court failed to apply the Rogers test.[2] Under the two-part Rogers test, the First Amendment protects titles of creative works that (1) have some artistic relevance and (2) are not explicitly misleading as to the source of the work. Typically, if both prongs of the test are met, the accused product is not liable for trademark infringement. The test does not also apply in dilution by tarnishment claims.
After the Ninth Circuit's ruling, on remand, the district court granted VIP's motion for summary judgment on both the infringement and dilutions claims, which the Ninth Circuit confirmed—motivating Jack Daniel's to petition the Supreme Court to hear the case. In its 2023 decision of Jack Daniel's Props., Inc. v. VIP Prods. LLC,[3] the Supreme Court issued a narrow opinion, providing clarification only with respect to infringement and dilution causes of action when the accused marks are used in a trademark or brand sense. As to infringement, the Court held that the Rogers test does not apply when the accused infringer uses another's trademark (or confusingly similar mark) to designate the source of its own goods or services (i.e., as a trademark source identifier). With regard to dilution, the Court similarly held that if the accused is using its mark to identify the source of its goods or services, a parody would not be shielded from the Lanham Act's noncommercial use exclusion from dilution liability. The Lanham Act's exclusion is limited to only noncommercial uses of marks (i.e., when they are not used to identify the source).
The case was eventually remanded back to the Ninth Circuit, which remanded back to the district court for Judge McNamee to again decide the issues of infringement and dilution by tarnishment—now as they relate to VIP's conception of Bad Spaniels as a parody.
2. Trademark Infringement: Creating a Successful Juxta-poo-sition
On remand, the court found that VIP had created a successful parody sufficient to avoid a likelihood of confusion. Specifically, even though VIP used marks similar to those featured on the Jack Daniel's bottle of whiskey, their "version" of the marks referenced feces and defecation, making it clear they were different from the Jack Daniel's product. For example, VIP replaced Jack Daniel's use of "Old No. 7 Tennessee Sour Mash Whiskey," with "The Old No. 2 on your Tennessee carpet," and "40% alcohol by vol. (80 proof)" with "43% poo by vol." and "100% smelly." As a result of VIP's feces forward theme, the court found that because VIP created a "successful" parody of the Jack Daniel's brand, consumers would not be confused as to its source.
In contrast to its prior holding, the district court on remand assessed the issue of infringement with an eye to parody. In its prior decision, the court disregarded VIP's parody claim because VIP intended to capitalize on the success of the Jack Daniel's mark. However, the Supreme Court's unanimous decision compelled a finding that VIP's use of the Jack Daniel's marks as a parody "may properly figure in assessing the likelihood of confusion."[4] In particular, an infringing product must be a "successful" parody to avoid confusion and "create contrasts, so that its message of ridicule or pointed humor becomes clear."[5]
In addition to the Supreme Court's guidance, the district court also looked to a prior Fourth Circuit decision involving a dog chew toy ("Haute Diggity Dog") that parodied a Louis Vuitton purse.[6] To determine if the parody was "successful," the Fourth Circuit employed a two-part test before engaging in the standard likelihood of confusion analysis, namely, (1) does the parody evoke the original, and (2) does the parody create contrasts through humor sufficient to dispel confusion as to the source of the parody? In applying the same Fourth Circuit test in the present case, the district court found that (1) the similarity between Bad Spaniels and Jack Daniel's is undisputed, and (2) VIP's references to dog feces conveyed a message of humor ("to some"), which sufficed as a parody.
Jack Daniel's argued that the messages on the Bad Spaniels toy must in some way ridicule Jack Daniel's in order to succeed as a parody. However, the court was not persuaded and clarified that the parody must only create some contrast through a humorous message, or by juxtaposing an irreverent representation with the idealized famous mark.
Next, the district court analyzed a nonexhaustive list of factors (the Sleekcraft factors) to determine whether a likelihood of confusion exists between the respective marks. Each of the factors (e.g., similarity of the marks, strength of the marks, relatedness of goods/services, intent, etc.) favored VIP because the focus of the court's analysis was now placed on the parodic uses of the accused marks. For example, ordinarily a similarity between marks would result in a higher likelihood of confusion and thereby weigh in favor of finding VIP liable for infringement. However, under the present circumstances, the court found the undisputed similarity between the marks was necessary for Bad Spaniels to evoke Jack Daniel's as a parody. Also, the strength of the Jack Daniel's marks, which would typically favor a likelihood of confusion, was also held to work to VIP's advantage because parody necessarily depends on widespread recognition of the parodied mark.
As to the intent factor, the district court vacated its prior finding in the wake of the 2023 Supreme Court decision. Specifically, the district court previously held VIP liable for infringement because it intended to capitalize on the fame and success of the Jack Daniel's marks. However, following the Supreme Court's clarification, the court determined that intent to capitalize on another trademark's fame is not of concern when ruling on parodic uses of marks. Instead, the focus should be on whether the accused party intended to use the marks to deceive. The intent factor ultimately also strengthened the case for VIP because the court found that VIP's intent in selecting the marks was to parody, and not deceive.
Even though VIP was able to evade liability for infringing Jack Daniel's marks, the references to feces and defecation on the VIP toy were in fact the same reasons Jack Daniel's prevailed on the dilution by tarnishment counterclaim.
3. Trademark Dilution by Tarnishment: Paws-itively Liable
The district court looked to the Trademark Dilution Revision Act (TDRA), which defines dilution by tarnishment as an "association arising from the similarity between a mark or trade name and a famous mark that harms the reputation of the famous mark."[7] The TDRA entitles the owner of a famous mark to an injunction if the other mark is likely to harm the reputation of the famous mark, rather than requiring a showing of actual harm. Notably, Congress amended the TDRA in 2006 to make more lenient the standard for an actionable dilution claim such that "actual" harm need not be proved.
Re-pug-nant puns
To establish dilution by tarnishment, Jack Daniel's was required to prove two factors: (1) fame of at least one of its marks prior to VIP's use of a similar mark, and (2) that VIP's use is likely to cause negative associations that harm the reputation of the Jack Daniel's mark(s). As to the first factor, Jack Daniel's easily established its fame—it was essentially self-evident—by a preponderance of the evidence. Furthermore, the similarity of the respective parties' marks was not an issue since, by virtue of it being a parody in the first instance, the VIP product was intentionally designed to be similar.
As to the second, reputational harm factor, the court had to determine whether the Bad Spaniels toy is likely to portray the famous Jack Daniel's mark "in an unwholesome or unsavory context likely to evoke unflattering thoughts about the owner's product."[8] The court relied heavily on the testimony of the Jack Daniel's expert witness, Dr. Itamar Simonson, a Stanford University marketing professor, and found his consumer psychology research to be most persuasive. Specifically, Dr. Simonson pointed to the various references to feces on the Bad Spaniels toy (e.g., VIP's replacement of "The Old No. 2 on your Tennessee carpet" in place of "Old No. 7 Tennessee Sour Mash Whiskey," together with VIP's replacement of "40% alcohol by vol. (80 proof)" with "43% poo by vol." and "100% smelly") and applied empirical research to establish that when food or beverage intended for human consumption is associated with feces, consumers are likely to be disgusted by that food or beverage (consciously or unconsciously).
Put simply, a brand does not want consumers to think of poop when they are faced with their food or beverage products. The court found that Bad Spaniels is likely to dilute Jack Daniel's trademarks and trade dress by "creating unsavory associations" with feces and undermine any positive associations with Jack Daniel's whiskey.
A ruff defense
VIP's arguments and proffered expert opinions and evidence failed to sway the court's decision on the dilution by tarnishment issue. Specifically, VIP argued that (1) there was no evidence of "actual" tarnishment, (2) the opinion of Dr. Simonson alone is not sufficient to establish dilution by tarnishment, and (3) "poop can sometimes be wholesome" in comparison with prior tarnishment cases involving sex and drugs. The court rejected each of VIP's arguments: First, the court found that "actual" tarnishment is not required under the TDRA, but rather only a "likelihood" of dilution. Second, Dr. Simonson's opinions were afforded prevailing weight based on well-documented consumer psychology research regarding negative associations with dog feces. And, third, the TDRA does limit tarnishment claims only to associations with sex and drugs—the standard is whether the plaintiff's mark will suffer any negative associations with an inferior product.
VIP also presented arguments in the form of a "correlative" analysis, asserting that each of the accused marks did not individually reach the standard of dilution by tarnishment. For example, even though VIP used "Old No. 2" on the dog toy to reference feces, the correlating Jack Daniels' "Old No. 7" mark is not famous, and accordingly cannot give rise to a dilution by tarnishment action on its own. Alternatively, while the "Jack Daniel's" mark is famous, the correlating use of "Bad Spaniels" on the dog toy does not reference defecation or otherwise create a negative association. The court dismissed VIP's "correlative" analysis and the notion that marks should be examined in isolation. Instead, the court clarified that all Bad Spaniels marks taken together associate all of the famous Jack Daniel's marks with poop. The court also cautioned that VIP's interpretation would preclude myriad famous marks from dilution by tarnishment causes of action under the Lanham Act. While there may be nothing inherently tarnishing about certain marks when assessed individually, a disparaging or unsavory association may nonetheless exist when the marks are taken together.
Additionally, VIP attempted to raise a new affirmative defense that it had not previously raised during the decade-long litigation. VIP argued that the dilution cause of action under the Lanham Act violates the First Amendment because it amounts to unconstitutional viewpoint discrimination. VIP cited to Supreme Court dilution by tarnishment decisions as "intervening changes in law" that warrant a departure from controlling law and would allow VIP to raise an affirmative defense now. However, the court declined to consider the merits of VIP's defense—not because VIP failed to raise it at prior stages of the litigation—but because the affirmative defense was not properly raised in the pleadings. The court clarified that if VIP had raised its defense in an amended pleading, it would not have otherwise been precluded from raising the defense at this late stage of the litigation because (1) an argument waived on appeal is not necessarily waived on remand to the trial court, and (2) the district court had not already decided the constitutionality of the Lanham Act. But the pleading defect doomed VIP's chance to raise this potential defense.
The court also discredited VIP's expert witness, Mr. Bruce Silverman, an advertising, marketing, and branding consultant. The court reasoned that prevailing weight would be given to the Jack Daniel's expert, Dr. Simonson, because Mr. Silverman relied upon flawed focus group evidence and did not have adequate expertise pertaining to the case. Specifically, Mr. Silverman arranged and relied on four focus groups, which the court deemed to be biased presentations because they favored the Bad Spaniels toy as a spoof product at the outset and tainted the focus group's conclusions. The court was also not impressed by his résumé, finding his experience in advertising to fall short of that of an expert who is well versed in trademark dilution matters.
4. Conclusion: Some bones to chew on
- Using parodied marks to identify source (as trademarks), rather than in a non-commercial, expressive nature, may subject a party to liability for both dilution by tarnishment and infringement causes of action; both First Amendment protections under the Rogers test to avoid infringement liability, and the Lanham Act's noncommercial use exclusion to avoid dilution liability, may not apply.
- When parodies are involved, infringement and dilution by tarnishment causes of action may be at odds. Qualities of a parody that may trigger a dilution by tarnishment cause of action may be the same qualities that will allow the parody to evade an infringement claim. However, those intending to parody (or defend the use of a parody) may be able to use this decision to strike a balance between these competing causes of action.
- With regard to infringement, the parody must be "successful," with the standard for success requiring only a showing of contrast or an irreverent juxtaposition between the parody and the famous mark. There is no need to ridicule the successful mark to achieve parody.
- References to poop in parodies of famous trademarks should be avoided, especially when the famous marks are associated with food or drink (for human consumption). Courts are also not likely to find the humor in such poop puns.
- Judge McNamee presents a detailed analysis of whether and when a party may raise an affirmative defense. Parties seeking clarification on whether they may be able to raise a defense not already raised previously during a litigation (particularly before a lower court on remand) may wish to examine this decision for guidance.
- This decision also highlights the importance of selecting a credible expert witness. Courts in trademark disputes are likely to find experts more credible who are familiar and well versed in trademark law, and who rely upon empirical studies and well-documented consumer psychology. Any focus groups or survey evidence relied upon should also be carefully administered to avoid any possibility of bias.
[1] VIP Products LLC v. Jack Daniel's Properties Incorporated, 2:14-cv-02057 (D. Ariz. Sep 16, 2014).
[2] VIP Prods. LLC v. Jack Daniel's Props, Inc., 953 F.3d 1170, 1175 (9th Cir. 2020).
[3] 599 U.S. 140 (2023).
[4] Jack Daniel's Props., Inc. v. VIP Prods. LLC, 599 U.S. at 161.
[5] Id.
[6] United States v. Chong Lam, 677 F.3d 190 (4th Cir. 2012).
[7] 15 U.S.C. § 1125(c)(2)(C).
[8] See Tiffany (NJ) Inc. v. eBay, Inc., 600 F.3d 93, 111 (2d Cir. 2010) (quoting Deere & Co. v. MTD Prods., Inc., 41 F.3d 39, 43 (2d Cir. 1994)).
