Addressing whether a dog toy meant to humorously evoke a bottle of whiskey was entitled to First Amendment protection, the US Court of Appeals for the Ninth Circuit held that the toy was a protectable expressive work. The Ninth Circuit vacated and remanded the district court’s finding of trademark infringement, reversed the judgment on dilution, and upheld the validity of the whiskey proprietor’s trademark and trade dress rights. VIP Products LLC v. Jack Daniel’s Properties, Inc., Case No. 18-16012 (9th Cir. Mar. 31, 2020) (Hurwitz, J.).

VIP Products sells the “Bad Spaniels Silly Squeaker” dog toy (on the left above). The design of the dog toy is similar, but not identical, to the Jack Daniel’s (JDPI) whiskey bottle, and some of the textual elements vary as well. For example, JDPI’s “Old. No. 7” has been replaced by “Old No. 2” on the dog toy, and underneath this text, VIP’s product says “On Your Tennessee Carpet” where JDPI’s product reads “Tennessee Sour Mash Whiskey.”

JDPI sent VIP a letter shortly after the launch of the Bad Spaniels Silly Squeaker, demanding that VIP stop selling the toy. VIP responded by filing a declaratory judgment action that (1) its product does not infringe or dilute JDPI’s trademark rights, and (2) JDPI’s trade dress and bottle design are not protectable trademarks. VIP also sought to cancel JDPI’s trade dress registration for its bottle design. JDPI counterclaimed, alleging that VIP infringed its state and federal trademark and trade dress rights.

Both parties filed motions for summary judgment. The district court denied VIP’s motion and stated that the defense of nominative fair use was not applicable where the defendant did not use the identical trademark or trade dress. Nor was a First Amendment fair use defense available where the defendant’s product was “a somewhat non-expressive, commercial product,” according to the court. The court granted JDPI’s motion and found that its trade dress and bottle design were protectable because they were “distinctive, non-generic, and nonfunctional.” The court permanently enjoined VIP from selling the Bad Spaniels Silly Squeaker and found that the toy diluted JDPI’s trademark and trade dress rights by tarnishment. VIP appealed.

The Ninth Circuit upheld the district court’s finding on the protectability of JDPI’s trademark and trade dress rights: “Although whiskey companies use many of the individual elements employed by JDPI on their bottles, the Jack Daniel’s trade dress is a combination of bottle and label elements. . . . [T]hese elements taken together are both nonfunctional and distinctive.” Similarly, the Ninth Circuit found that the district court correctly denied VIP’s attempt to cancel JDPI’s trade dress registration for its bottle design, which is entitled to a rebuttable presumption of validity. The Court also agreed with the district court’s finding on nominative fair use, stating that the “differences [between VIP’s product and JDPI’s product] preclude a finding of nominative fair use.”

With respect to the First Amendment defense, however, the Ninth Circuit explained that the district court had failed to consider the toy as an expressive work, noting that “[it] is not rendered non-expressive simply because it is sold commercially.” Pointing to the dog toy’s amusing twists on the serious phrases depicted on the Jack Daniel’s bottle, the Court stated that “the Bad Spaniels dog toy, although surely not the equivalent of the Mona Lisa, is an expressive work.”

Expressive works are not subject to the Lanham Act’s likelihood of confusion test unless the plaintiff first satisfies at least one prong of the Rogers-Grimaldi test, namely (1) the defendant’s product is not “artistically relevant” to the underlying work, or (2) it “explicitly misleads consumers as to the source or content of the work.” The Ninth Circuit therefore vacated the district court’s infringement finding and remanded for further consideration of whether JDPI could satisfy one of the Rogers-Grimaldi requirements.

Finally, the Ninth Circuit reversed the district court’s finding on dilution by tarnishment. The First Amendment protects the humorous message conveyed by the Bad Spaniels Silly Squeaker because the speech “does more than propose a commercial transaction” and is therefore noncommercial: “When the use of a mark is ‘noncommercial,’ there can be no dilution by tarnishment.”