A unanimous Supreme Court backs an Arizona federal judge—and slaps down an Arizona company

But the Arizona dog chew maker will get one more bite on remand

“This case is about dog toys and whiskey, two items seldom appearing in the same sentence,” Justice Kagan’s opinion cheekily begins. The case arose when an Arizona company operating as MyDogToy.com put out a dog toy called the Silly Squeaker Liquor Bottle. The dog toy (you can see it here) is an obvious takeoff of the classic Jack Daniels bottle, with which most readers will surely be familiar. (“Recall what the bottle looks like,” Justice Kagan observed, “or better yet, retrieve a bottle from wherever you keep liquor; it’s probably there.”) Among the takeoffs: the “Jack Daniels” wording is modified to read “Bad Spaniels”; and the classic phrase “Old No. 7 Tennessee Sour Mash Whiskey” are replaced with “The Old No. 2 on your Tennessee carpet.” Not surprisingly, Jack Daniels did not see the humor. The whiskey maker saw it as naked trademark infringement; the dog toy maker saw it as free speech. Inevitably, the parties wound up in court. Judge McNamee of the Phoenix federal bench ruled for Jack Daniels, but the Ninth Circuit reversed. And last Thursday, the Supreme Court backed our local federal bench.

The question, not unlike the Warhol v. Goldstein copyright case we covered about three weeks ago, arose at the intersection of intellectual proper law and free speech principles. The case was indeed high stakes for manufacturers and parodists everywhere. A longstanding doctrine of trademark law, embodied in the famous case of Rogers v. Grimaldi, carves out certain limits to trademark protection where free expression is at stake. In that case, actress Ginger Rogers claimed that use of “Ginger and Fred” as a movie title violated the Lanham Act by creating the false impression that she had sponsored the movie. The Second Circuit found that the “expressive element” of a movie title required more protection than the labeling of ordinary commercial products. But that was a movie title—classic expressive conduct. How should that apply to a parodist who is simply trying to sell a product? Last Thursday the Supreme Court weighed in—and squarely in favor of trademark law principles.

The Court’s opinion began by finding, as the Arizona court had done initially, that the Rogers test did not apply here. To the Court, the problem here was simple: VIP used its trademark “in the way the Lanham Act most cares about: as a designation of source for the infringer’s own goods.” That made Rogers distinguishable. So when Mattel sued a band over the song “Barbie Girl”—you know the one: “Life in plastic, it’s fantastic”—that was covered by Rogers because the band’s use of the Barbie name was “not [as] a source identifier.” (Think also of Janis Joplin’s “Oh Lord, won’t you buy me a Mercedes Benz?”—nobody would suspect, the Court noted, “that she and the carmaker had entered into a joint venture.”). But where the expressive use of a trademark also used it to designate source, the Court noted, the outcome in lower courts had traditionally been different. Ultimately, the Court concluded, “the Rogers test has applied only to cases involving “non-trademark uses”—that said, cases in which “the defendant has used the mark” at issue in a “non-source-identifying way.” Indeed, the Court noted, “[w]ere it otherwise, Rogers might take over much of the world.”) The Jack Daniels case therefore fell safely on the trademark protection side of the line.

Nor could free speech principles protect the dog chew maker from a second claim—trademark dilution—brought by Jack Daniels. The Ninth Circuit found that a trademark dilution claim could not survive if the accused product parodied the original. Again, the Supreme Court reasoned, the argument was way too broad. illustrates. “Given the fair-use provision’s carve-out, parody (and criticism and commentary, humorous or otherwise) is exempt from liability only if not used to designate source,” the Court reasoned. “Whereas on the Ninth Circuit’s view,” the Court pointed out, “parody (and so forth) is exempt always—regardless whether it designates source.” That was the wrong rule of law—and as of this morning, and it null and void.

That said, all is not lost for the Arizona dog-chew toy manufacturer. To be sure, in the wake of this decision it could no longer insulate itself from a trademark claim merely because its label was expressive. But it was still entitled to a hearing on perhaps the central issue of trademark law: whether there was a likelihood of confusion between its product and the Jack Daniels bottle. After all, the Court noted, “a trademark’s expressive message—particularly a parodic one, as VIP asserts—may properly figure in assessing the likelihood of confusion.” The Arizona federal court would get another chance, the Court held, to consider this issue on remand.