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

DETERMINING THE APPROPRIATE TEST TO ADDRESS CONSUMER CONFUSION

JDPI argues that VIP’s dog toy violates the Lanham Act, a federal law that, among other things, prohibits a party from designing their products with marks so similar to a registered trademark owned by another party that the similarity could confuse consumers. Brief for Petitioner, Jack Daniel’s Properties, Inc. at 22, 27. JDPI explains that, to determine whether a product’s marks violate the Lanham Act, courts compare a wide range of factors that assess whether, from the consumer’s perspective, the two products have confusingly similar marks. Id. at 24–25. JDPI argues that every factor of this multifactor test, such as the products’ similarity in appearance and the companies’ overlap in product offerings, suggests that the marks on VIP’s dog toy confuse consumers about who produced it. Id. at 27.

JDPI further argues that the Second Circuit’s decision in Rogers v. Grimaldi, in which the court adopted a two-part test for exempting certain uses of borrowed trademarks from the Lanham Act’s prohibition of confusingly similar marks, was wrong. Id. at 21–22. JDPI asserts that the test’s two parts, which consider whether an alleged infringer’s use of a registered trademark has “artistic relevance” or “explicitly misleads” consumers to determine whether the “public interest in avoiding consumer confusion outweighs the public interest in free expression,” are inconsistent with the text of the Lanham Act. Id. at 22–23. JDPI points to Congress’s explicit protection of others from liability for using registered trademarks to suggest that, had Congress intended to protect the users covered by the two-part test under Rogers, it would have said so itself. Id. JDPI also asserts that the Rogers test undermines the Lanham Act’s purposes of protecting consumers and preventing opportunistic infringers from undermining trademark owners’ investment into their registered trademark’s reputation with consumers. Id. at 36–38.

JDPI asserts that the First Amendment, which provides protections for freedom of expression, does not require the two-part test under Rogers. Id. at 28. Because the Second Circuit did not have to avoid addressing the Lanham Act’s constitutionality in Rogers, JDPI contends, the Second Circuit would have declared its application to expressive marks unconstitutional if it ran afoul of the First Amendment. Id. at 28. Regardless, JDPI adds, the Lanham Act’s application to expressive uses does not violate the First Amendment because the First Amendment allows for regulations of misleading commercial speech, which Congress and the courts have historically enacted. Id. at 29–32. JDPI notes that the Rogers test incompletely considers the First Amendment-related expressiveness of the original registered trademark, whereas the multifactor test accounts for it. Id. at 34–35. In the alternative, JDPI claims that the two-part test under Rogers only applies to artistic works, not to information about the source of a product, and that the marks on VIP’s dog toy concern the source of the dog toy. Id. at 38–39.

VIP counters that the marks on its dog toy do not confuse consumers about who produced the toy. Brief for Respondent, VIP LLC at 13. VIP emphasizes that the marks do not cause confusion because they parody JDPI’s whiskey bottle and are an artistic expression about a “fictional product” that no one sells. Id. at 14. VIP underscores that its dog toy is a garden-variety brand parody, not at all confusing to consumers, and a longstanding application of artistic expression. Id. at 14–16.

VIP also responds that courts should use both tests to analyze claims under the Lanham Act: the multifactor test for commercial products and the Rogers test for expressive works. Id. at 27. Pointing out that the Lanham Act does not specifically call for either test, VIP argues that courts created the two tests to fill in gaps left behind by the Act’s sparse wording. Id. at 27–28. VIP contends that the Rogers test performs a distinct function from the multifactor test by assessing marks that creatively reference the registered trademark from which they are borrowed, rather than identify the source of a product. Id. at 30–31. The Rogers test, VIP argues, is responsive to the risk that the multifactor test would disallow expressive messages and appropriately weighs consumer confusion against the public interest in hearing the message. Id. at 31–32. VIP highlights that the long history of the Rogers test’s use in courts demonstrates that the test is easy for courts to apply and prevents trademark litigation from suppressing free speech. Id. at 33–34. VIP further argues that the multifactor test’s factors sometimes excessively favor the trademark owner because of their origin in the commercial context and reliance on flawed consumer confusion surveys. Id. at 40–43. The Rogers test, VIP compares, properly corrects for these problems by asking whether marks involve “artistic relevance” that would provide them with greater protection under the First Amendment without being “explicitly misleading” in the marketplace. Id. at 46–47.

Lastly, VIP argues that because the marks on its dog toy carry a humorous message, parodying both dog owners and the Jack Daniel’s brand, the marks warrant First Amendment protection. Id. at 17. VIP claims that the First Amendment’s protection of messages like the one conveyed on its dog toy apply regardless of the medium through which they are conveyed. Id. at 26. Rather than focusing on the medium of the message, VIP posits, the applicability of the First Amendment’s protections to a message is based on whether the recipient of the message would perceive the message as communicative in nature. Id. at 25. VIP also notes that the First Amendment’s protections still apply to a message conveyed on a product that is sold for profit. Id. VIP maintains that the Rogers test is consistent with courts’ longstanding preferences for clear, categorical tests to answer questions under the First Amendment. Id. at 35–37. By contrast, VIP suggests that multifactor tests like the one for commercial uses under the Lanham Act are inherently uncertain or imprecise and accordingly take a long time to resolve, making multifactor tests ill-suited to expressive works. Id. at 34–37.

ANALYZING THE CONSTITUTIONALITY OF THE LANHAM ACT’S DILUTION PROVISION UNDER THE FIRST AMENDMENT

JDPI argues that VIP’s dog toy violates the Lanham Act’s anti-dilution provision, which prohibits marks that harm the public perception of a registered trademark. Brief for Petitioner at 40. Pointing to the dog toy’s purpose as a saleable product, JDPI disputes the Ninth Circuit’s finding that the dog toy qualifies for the anti-dilution provision’s “noncommercial use” exception based on the toy’s humorous purpose. Id. JDPI argues that the term “noncommercial use” is ordinarily defined by courts and Congress to exclude any circumstance involving the sale of goods or services. Id. at 40, 47–49. JDPI contends that the Ninth Circuit’s approach would subsume other, narrower exceptions to the anti-dilution provision, which JDPI maintains would be inconsistent with common statutory interpretation methods. Id. at 42. Finally, JDPI argues that the Ninth Circuit’s expansion of the noncommercial-use exception would prevent the anti-dilution provision from preserving the economic value of registered trademarks by allowing lewd marks to harm registered trademarks’ reputations. Id. at 43–44.

JDPI further explains that a broad noncommercial-use exception would encourage companies to bypass usual practices of licensing trademarks from their owners by simply claiming that their marks use the registered trademark humorously. Id. at 46–47. Finally, JDPI maintains that applying the dilution statute to a commercial product, even a humorous one, does not run afoul of the First Amendment because intellectual property laws only restrict the manner, rather than content, of speech and therefore do not implicate the First Amendment. Id. at 49–51.

VIP counters that the Lanham Act’s dilution provision violates the First Amendment. Brief for Respondent at 51. Pointing to its restriction on uses that “harm[] the reputation” of the trademark owner, VIP contends that the restriction amounts to viewpoint discrimination. Id. at 51–52. VIP points out that the restriction is inconsistent with traditionally permissible restrictions on speech. Id. at 53. VIP elaborates that the restriction, because it only restricts critical speech of a registered trademark’s owner, is effectively a one-sided content-based restriction. Id. VIP highlights the salience of this effect on humorous speech, like parody, pointing to its inherently critical targeting of the subject matter. Id.

VIP also argues that the noncommercial-use exception relies on the Supreme Court’s historic distinction between commercial and noncommercial speech rather than common definitions of the term “commercial.” Id. at 56. The Supreme Court’s approach, VIP maintains, only considers speech “commercial” when it solely presents an economic transaction. Id. When the speech is combined with any other purpose, VIP suggests, the Supreme Court considers it “noncommercial.” Id. at 57–58. Here, VIP argues that, because the speech contained in the marks on the dog toy are part of the product sold, and not merely part of a proposal to purchase the product, the dog toy falls into the “noncommercial” category established by the Supreme Court. Id. at 58.