Jack Daniels and Dog Poop-A Trademark Owner’s Worst Nightmare: Disgust may Equal Dilution but not Trademark Infringement

The latest decision in the decade-long battle between whiskey maker Jack Daniel’s and the poop-themed squeaky dog toy maker VIP Products (“VIP”) is a win for the distiller giant. However, although Jack Daniel’s prevailed, it failed to obtain the decisive judgment on all counts for which it likely hoped. After the case went all the way to the Supreme Court in 2023 and was remanded to the district court where the lawsuit started, the district court judge issued an order granting relief to Jack Daniel’s on its dilution by tarnishment claim but denying its trademark infringement cause of action.

VIP Products sued Jack Daniel’s in 2014, seeking a declaratory judgment that its chewable rubber dog toy (referred to as “Bad Spaniel’s”) did not infringe Jack Daniel’s JACK DANIELS trademark or trade dress (the shape of its bottle with accompanying design elements, including filigree and the “Old No. 7” insignia) or dilute them in connection with Jack Daniel’s Black Label Whiskey. VIP posited that its use of Jack Daniel’s trademarks was done for parodic effect and protected under the First Amendment and the doctrine of nominative fair use. Jack Daniel’s counterclaimed that such use would likely confuse consumers regarding source, affiliation, or approval and dilute its brand. After a four-day bench-trial in 2017, the judge sided with Jack Daniel’s on both counts and issued a permanent injunction enjoining VIP from selling the product.

VIP appealed to the Ninth Circuit, which reversed the district court on the issue of dilution and vacated its infringement decision, finding that the dog toy was an expressive work and thus protected by the First Amendment. On remand, the district court changed course, followed the Ninth Circuit, and agreed with VIP that there was no infringement or dilution after applying the Roger’s-test analysis instead of the traditional multi-factor test to evaluate infringement. (The Roger’s test is considered a more lenient standard for assessing trademark infringement, favoring junior users of a mark, but is traditionally reserved for expressive works, such as films, books, and songs). Jack Daniels then appealed to the Ninth Circuit, which affirmed the district court’s ruling. Jack Daniels’ appealed again, but this time to the Supreme Court, which agreed to hear the case.

In 2023, the Supreme Court found that, although the dog toy may be a form of parody, funny to some, and contain expressive elements, that was not dispositive of what test should be used to determine infringement. Instead, the Court instructed that how the junior mark (a mark that resembles a different mark that was used earlier, known as the senior mark) in question is used in commerce determines the proper test to apply. So, suppose the junior mark is used as a source identifier, i.e., as a trademark, to inform the public that it denotes the source for particular goods or services. In that case, the traditional multi-factor test should be used to analyze infringement irrespective of whether expressive elements are embodied in the product associated with the junior mark. However, the Court noted that the issue of parody may play an essential factor in that analysis. When consumers believe that a junior trademark is used in connection with a product to parody a different product identified by a senior trademark, confusion will be unlikely because consumers understand that a brand owner won’t tend to make fun of its own products by using a derivative mark that is obviously meant to evoke the original mark. And without likely consumer confusion, there can be no trademark infringement.

With that in mind, the district court employed the traditional trademark test to decide the infringement claim. But first, it had to settle the controversy of whether VIP’s conduct diluted Jack Daniel’s trademark and trade dress by tarnishment. Proving dilution is a high standard because it requires that the diluted mark be “famous”-and being known to millions of people is insufficient. Fame requires that the mark be widely recognized by the general consuming public of the United States as a designation of source. Tarnishment is proven by showing that the use of a mark is likely to cause harm to the reputation of a famous mark. Jack Daniel’s proved that its mark was famous by showing that it has been used continuously since 1875 (except during Prohibition), that it has been the best-selling whiskey in the U.S. since 1997, that from 1997 to 2015 its revenues exceeded 10 billion dollars, and that its had spent hundreds of millions of dollars to promote its whiskey products. Both VIP and Jack Daniel’s used expert witnesses to prove or disprove reputational harm. VIP’s expert witness based his opinions on the findings of focus groups he conducted, and Jack Daniel’s witness relied on consumer psychology research. The judge was persuaded by Jack Daniel’s witness’s empirically-based methodology and wholly disregarded VIP’s witness’s testimony as “flawed” and “biased.” Supported by Jack Daniel’s witness’s findings that the pairing of dog excrement and human food or beverage tends to engender disgust in the minds of consumers, the judge found in favor of Jack Daniel’s on the issue of dilution by tarnishment. He stated that VIP’s replacement of Jack Daniel’s “Old No. 7” insignia on its dog toy with “the Old No. 2, on your Tennessee Carpet,” coupled with the addition of “43% POO BY VOL.” and “100% SMELLY,” undermined the positive attributes consumers had of Jack Daniel’s trademarks and trade dress and caused it reputational harm.

The judge found, however, that confusion was unlikely and, consequently, there was no trademark infringement. He performed a two-part analysis to decide whether VIP’s use of Jack Daniel’s trademarks constituted parody by weighing whether such use evoked Jack Daniel’s marks while simultaneously creating a humorous distinction between Jack Daniel’s marks and VIP’s marks. In finding that VIP’s use constituted parody, the judge noted that the same facts that doomed VIP’s defense against dilution enabled it to prevail on the issue of likelihood of confusion. Consumers won’t tend to believe that a company would purposefully associate its trademarks and trade dress for a beverage with dog feces.

Jack Daniel’s won on dilution but lost on infringement. However, since a victory on all counts wasn’t necessary to obtain a permanent injunction, the judge has given Jack Daniel’s 30 days from the date of his order to file a proposed form of injunction. Furthermore, the case still may not be over because VIP could once again appeal to the Ninth Circuit, which has already vacated and reversed orders from the same district court.

Companies have a First Amendment right to mock and poke fun at other brands through parody. A successful parody in the trademark context accomplishes two goals: the junior mark uses just enough of the senior trademark to conjure up the senior mark in the minds of consumers but also is sufficiently distinguishable and humorous so that consumers can conclude that the marks are probably not related, thereby negating any likely confusion. Most brand owners probably don’t want their trademarks mocked and certainly wouldn’t want them associated with dog poop. But unless the brand owner has spent millions of dollars over decades to make its trademarks famous, it will probably have little recourse if its mark is ridiculed and the positive aspects consumers associate with it are diminished. Under the Jack Daniel’s ruling, a successful parody will not give rise to trademark infringement and will only create liability for dilution if the mark is famous.