The Real Takeaway From VIP Products LLC v. Jack Daniel’s

Much has already been written about the Supreme Court’s holding in the trademark dispute between Jack Daniel’s and VIP Products regarding the “Bad Spaniels” dog toy that VIP began selling back in 2014. Yes, the High Court’s opinion is important and is discussed below, but another important takeaway from VIP Products, LLC v Jack Daniel’s is the fact that it was filed in 2014 and is still going on. The first round of briefing since the Supreme Court remanded the case back to the trial court will not be completed until April 19, 2024—nearly ten years after the case was filed! And that will not be the end. There could still be additional proceedings in the trial court and once that court makes its next “final” ruling, that decision will be appealable.

The Supreme Court’s opinion was decided on a narrow legal issue and they vacated the Ninth Circuit Court of Appeal’s ruling and remanded the case back to the trial court. The legal analysis is interesting but this case is also a cautionary tale about sending out demand letters and filing declaratory judgment suits.

VIP makes chewable rubber toys called “Silly Squeakers” that squeak when bitten (presumably by a dog). Most of their dog toys look like parodies of popular beverages with dog related puns. For example, in addition to “Bad Spaniels” they also offer Dos Perros (a parody of Dos Equis), Smella Arpaw (a parody of Stella Artois), and Doggie Walker (a parody of Johnnie Walker). In its Complaint, VIP alleged that it was “the owner of all rights in its “Bad Spaniels” trademark and trade dress for its durable rubber squeaky novelty dog toy.” This admission was noted by both the trial court and Supreme Court and factored heavily in their rulings against VIP.

VIP was relying on a widely adopted case from the Second Circuit: Rogers v. Grimaldi, 875 F. 2d 994, 999 (CA2 1989). That case established what is now known as the “Rogers test.” Under the Rogers test, the plaintiff has the burden to show that the defendant’s use of the mark is either: 1) “not artistically relevant to the underlying work” or 2) “explicitly misleads consumers as to the source or content of the work.”

VIP argued that under that test, Jack Daniel’s infringement claim failed because Jack Daniel’s could not show that the challenged mark “has no artistic relevance to the underlying work” or that it “explicitly misleads as to the source or the content of the work.” But as the Court explained, the Rogers test has only ever applied to cases involving “non-trademark uses”—cases in which the mark was not as source identifier itself.

Because VIP was using the disputed marks as trademarks—that is as an identification of their source—the Court held that Rogers did not even apply. This gutted VIP’s entire legal theory.

Reflection on Trademark Litigation History

Looking back on the origin of this case, it is easy to see how a breakdown in communication lead to a decade of legal bills. On September 9, 2014, VIP received a demand letter from Jack Daniel’s which demanded that VIP stop selling its “Bad Spaniels” dog toy. Just one week later, VIP responded by filing a lawsuit seeking a declaration that that its use of the “Bad Spaniels” name and mark for its novelty dog toy did not infringe or dilute any trademark rights claimed by Jack Daniel’s.

When Jack Daniel’s asked their attorney’s to send a cease and desist letter to VIP, it is doubtful they were anticipating that this letter would cause a decades long legal battle that would be appealed twice to the Ninth Circuit Court of Appeals and once to the Supreme Court. Likewise, when VIP filed its action for declaratory judgment in a federal court in Arizona, it probably did not anticipate grinding out litigation for four years in the trial court and then an additional six years on the appeals.

Had VIP won this case, it would have been heralded as a big win for free speech and a cautionary tale against sending out overly aggressive cease and desist letters. But it didn’t work out that way. The courts were largely dismissive of VIP’s arguments. The case really came down to the fact that VIP used the similar marks as trademarks rather than merely expressively as parodies. This was a major miscalculation likely based on a poor analysis of the legal playing field.

The narrowness of the Court’s holding means that this is not really an affront to free speech—as was feared by many commentators—and will have a very limited real-world application. In fact, had VIP not insisted that they were using their parody as a trademark, the outcome of this case might have been different. They are now arguing over whether or not the trial court should reinstate its initial ruling or require additional proof of actual confusion. Here, VIP may have a good argument—their product has been on the market for the last decade, if Jack Daniel’s cannot demonstrate evidence of actual confusion or some tangible harm after such a long time, are they entitled to any relief?

Another interesting aspect of this case comes from the two concurring opinions. While the Supreme Court opinion was unanimous, there were two concurring opinions that indicate issues the Court might take up in the future. The first, issued by the unlikely pairing of Justice Sotomayor and Justice Alito, cautions against giving uncritical or undue weight to survey evidence. At trial, Jack Daniel’s had commissioned a survey that purport to show that consumers were likely to be confused by VIP’s allegedly infringing product. They noted that this is a common practice but were concerned that in cases where a parody was involved, surveys could be misused and prompt confusion by “making consumers think about complex legal questions around permission that would not have arisen organically out in the world.” They highlighted a couple of instances from Jack Daniel’s survey responses that indicated the respondents were clearly confused about legal issues rather than the products themselves. They ended by cautioning courts to “ensure surveys do not completely displace other likelihood-of-confusion factors, which may more accurately track the experiences of actual consumers in the marketplace.” This will be an important issue on remand because Jack Daniel’s is taking the position that the trial court should reissue its original opinion. If the trial court takes this opinion to heart, it may give VIP an advantage in the coming proceedings.

The second, and more interesting, concurrence issued by Justices Gorsuch, Thomas and Barrett, called into questions the use of the “Rogers test” at all. These Justices questions the fundamental assumptions of that case, noting that “it is not entirely clear where the Rogers test comes from—is it commanded by the First Amendment, or is it merely gloss on the Lanham Act, perhaps inspired by constitutional-avoidance doctrine?” In discussing this 35 year old case from the Second Circuit, they went so far as to say that “is not obvious that Rogers is correct in all its particulars.” They went on to say that that was a question for another day but it is clear that at least a third of the Court seems ready to abandon that method of analysis. Therefore, this area of the law will likely continue to evolve.

Key Takeaways from Jack Daniel’s Litigation

There are two key takeaways from this case. First, the Rogers test does not apply if the challenged mark is used as a trademark. As mentioned above, this is a very narrow holding. And even though one of the concurring opinions seemed to question the Rogers test at baseline, that case is still good law and has been followed in nearly all other Federal Circuits.

The Second key takeaway is that VIP was too aggressive in responding to the demand letter with a lawsuit. That response is a hyper aggressive tactic that works best against a smaller opponent who either doesn’t want to litigate or cannot afford to. But bully tactics only work if you are a bully facing a weaker opponent. Arming yourself with a sling when facing a giant might sound good on paper, but the outcome is more predictable when you are just a small company making squeeze toys for dogs.

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This article has been provided for informational purposes only and is not intended and should not be construed to constitute legal advice. Please consult your attorneys in connection with any fact-specific situation under federal law and the applicable state or local laws that may impose additional obligations on you and your company. © 2024 Klemchuk PLLC