IP Law Daily, TRADEMARK—D. Ariz.: ‘Bad Spaniels’ parody dog toy diluted Jack Daniel’s marks but didn’t infringe, (Jan 24, 2025)

By Thomas Long, J.D.

On remand from Supreme Court, district court finds that the toy’s parodic nature made source confusion unlikely, but it tarnished by creating negative associations between Jack Daniel’s and dog feces.

A dog toy that parodies the famous trademarks and trade dress of Jack Daniel’s Tennessee Whiskey did not infringe the distiller’s marks because its parodic nature made it unlikely that consumers would be confused as to the toy’s source, the federal district court in Phoenix has decided in proceedings on remand after the Supreme Court’s 2023 decision in the case. However, the “Bad Spaniels” dog chew toy was likely to dilute Jack Daniel’s marks through “tarnishment,” by creating an unsavory association in the minds of the consuming public between Jack Daniel’s whiskey and dog feces. The district court turned away an attempt by the dog toy’s maker to argue that the dilution by tarnishment provision of the Lanham Act constituted viewpoint discrimination in violation of the First Amendment, because the argument had not been raised in pleadings and was therefore waived. The court determined that Jack Daniel’s was entitled to permanent injunctive relief (VIP Products LLC v. Jack Daniel's Properties Inc., No. 2:14-cv-02057-SMM (D. Ariz. Jan. 23, 2025)).

“Bad Spaniels.” The dispute dates to 2013, when VIP Products LLC began selling its “Bad Spaniels Silly Squeakers” rubber novelty dog toy. The toy was made to resemble a bottle of Jack Daniel’s Old No. 7 Black Label Tennessee Whiskey but replaced the name “Jack Daniel’s” with “Bad Spaniels”; “Old No. 7” with “Old No. 2”; and alcohol content descriptions with “43% POO BY VOL.” and “100% SMELLY.” Jack Daniel’s holds a number of registered trademarks comprising verbal and visual elements of its whiskey bottle.

Litigation history. VIP filed a declaratory judgment action seeking a declaration of noninfringement; Jack Daniel’s Properties counterclaimed for trademark and trade dress infringement and trademark dilution. In January 2018, after a four-day bench trial, the district court found that the “Bad Spaniels” toy infringed and diluted Jack Daniel's registered trade dress and bottle design. The Ninth Circuit held in March 2020 that the toy qualified as a parodic expressive work protected by the First Amendment and remanded the case for evaluation of the infringement claims under the test set forth by the Second Circuit’s decision in Rogers v. Grimaldi, 875 F.2d 994 (2d Cir. 1989). Rogers introduced the proposition that an expressive use of a trademark does not infringe if the mark is artistically relevant to the expression and the use is not explicitly misleading.

The Ninth Circuit also ruled in VIP’s favor on the dilution claim, holding the exclusion for “noncommercial use” in Lanham Act Section 43(c)(3)(C) shielded VIP from liability, even though the trademark was used to sell a product. In the Ninth Circuit’s view, the limitation on dilution claims applied because the Bad Spaniels marks “parodied” and “commented humorously” on Jack Daniel’s.

On remand, following the appellate court’s guidance, the district court granted summary judgment in favor of VIP Products, and the Ninth Circuit summarily affirmed.

Supreme Court decision. Jack Daniel’s filed a petition for certiorari, asking the Court to decide: (1) Whether humorous use of another's trademark as one's own on a commercial product is subject to the Lanham Act's traditional likelihood-of-confusion analysis, or instead receives heightened First Amendment protection from trademark-infringement claims; and (2) Whether humorous use of another's mark as one's own on a commercial product is “noncommercial” under 15 U.S.C. §1125(c)(3)(C), thus barring as a matter of law a claim of dilution by tarnishment under the Trademark Dilution Revision Act.

In a unanimous decision on June 8, 2023, the Court held that Rogers did not apply when an alleged infringer uses a trademark as a designation of source for its own goods. Because VIP had used the marks to identify the source of its dog toy product, it would have to face Jack Daniel’s infringement claims. The Court also determined that the federal trademark dilution statute’s exemption for noncommercial uses of marks did not shield parody, criticism, or commentary under these circumstances. The Court further explained that although VIP’s effort to parody Jack Daniel’s marks did not justify use of the Rogers test, the parodic nature of the use might make a difference in the trademark infringement analysis.

Remand. The Supreme Court sent the case back to the Ninth Circuit, which in turn remanded to the district court for further proceedings. In a status conference, the parties agreed that the case could be resolved on the record established at the 2018 bench trial, without additional fact-finding. With this proviso, the district court took up the questions of whether (1) VIP’s “Bad Spaniels” dog toy tarnishes Jack Daniel’s trademarks, and (2) “Bad Spaniels” infringes Jack Daniel’s marks.

Dilution—First Amendment. The district court noted that the Supreme Court held that a parody cannot be encompassed by the Lanham Act’s “noncommercial use” exclusion for dilution liability when it is used as a source identifier. Therefore, VIP’s source-identifying use of the “Bad Spaniels” mark could not benefit from the fair-use exclusion for parody.

On remand, VIP raised a different speech-based argument, citing the Supreme Court’s decisions Matal v. Tam, 582 U.S. 218 (2017) and Iancu v. Brunetti, 588 U.S. 388 (2019). In those cases, the Court determined that Lanham Act provisions barring registration of marks that disparaged others or comprised “immoral” or “scandalous” matter, respectively, were invalid restrictions on speech. VIP contended that the Lanham Act’s provision prohibiting trademark dilution by tarnishment violated the First Amendment. According to VIP, Lanham Act Section 43(c)(2)(C), 15 U.S.C. § 1125(c)(2)(C)—which authorizes courts to enjoin mark uses that harm the reputation of a famous mark—amounted to unconstitutional viewpoint discrimination.

Jack Daniel’s argued that VIP waived this argument because it had not raised it previously. The district court agreed. First, it stated that the First Amendment challenge was not properly before the court because VIP had not raised the argument in its pleadings. Although the challenge was not precluded by the doctrine of the law of the case or by the mandate rule—since the case was on remand on a general mandate with the only limitation being that the new proceedings must be consistent with the Supreme Court’s order—the district court concluded that VIP could not now raise the challenge because it was an affirmative defense, and VIP had not moved to amend its pleadings. For this reason, the constitutional challenge had been waived.

Dilution—tarnishment. VIP next argued that the dilution by tarnishment claim failed because (1) Jack Daniel’s failed to show actual reputation harm; (2) VIP’s toy was innocuous compared to other products that other courts have found to be tarnishing; and (3) Jack Daniel’s did not prove that its “Old No. 7” designation was famous. Because the Ninth Circuit had vacated the district court’s previous ruling on dilution in most respects, VIP was not precluded from raising these arguments now. The court therefore examined the tarnishment claim with respect to the three factors of fame, similarity, and reputational harm.

As for fame, the court had found in its 2018 Order that “Jack Daniel’s trademarks and trade dress are famous and were famous before VIP introduced ‘Bad Spaniels’ in July 2014.” The court rejected VIP’s contention that it had to delineate between “Jack Daniel’s” and “Old No. 7” in the fame analysis. Furthermore, the court explained that it was VIP’s use of the Jack Daniel’s marks “on a poop-themed dog chew toy” that allegedly tarnished the Jack Daniel’s marks, not “Bad Spaniels” itself when taken in isolation. The court repeated its conclusion that Jack Daniel’s had established the requisite fame of its asserted marks.

The court needed little time to determine that there was a high degree of similarity between the parties’ marks. VIP did not contest that similarity had been established.

Turning to reputational harm, the court mentioned expert testimony that the “Bad Spaniels” toy was likely to create unsavory associations between Jack Daniel’s marks and dog feces. The court rejected VIP’s contention that there was no evidence of actual reputational harm because the parties had agreed that no further fact-finding was required in the case. Moreover, in the court’s view, the evidence in the record was enough for Jack Daniel’s to prevail on the issue. First, the dilution statute does not require a showing of actual tarnishment, only a likelihood that tarnishment will occur. The court said that the expert’s testimony was sufficient to show a likelihood of tarnishment, noting that the expert had evaluated consumer psychology research. Consumer surveys or focus groups were not needed. The expert based his conclusions on “well-documented research suggesting that such feces-related associations lead to negative consumer associations with food and drink products.” The court also turned away VIP’s contention that its toy was “innocuous” compared to associations involving sex and drugs in other cases, explaining that tarnishment “is not limited to seamy conduct.” In the court’s view, the association created by the toy between Jack Daniel’s whiskey—a product made for human consumption—with dog feces was “particularly detrimental” and likely to undermine the positive associations Jack Daniel’s had created.

The court therefore found that Jack Daniel’s had met all of the requirements for establishing a claim for dilution by tarnishment.

Infringement—parody. The court reached a different conclusion, however, with respect to the trademark infringement claim. The fact that the “Bad Spaniels” toy was conceived as a parody of Jack Daniel’s marks and trade dress affected the likelihood of confusion analysis and led to a conclusion that the toy did not create a likelihood of confusion as to source. The toy met the test for trademark parodies set forth in Louis Vuitton Malletier, S.A. v. Haute Diggity Dog, LLC, 507 F.3d 252, 263 (4th Cir. 2007). Specifically, the court determined that VIP’s parody (1) evoked Jack Daniel’s original marks and dress and (2) created contrasts through humor adequate to dispel confusion as to the source of the parody. With respect to the first element, the parties agreed that VIP’s toy closely copied the style of Jack Daniel’s label and the size and shape of the bottle. The court had no trouble concluding that the toy was a successful parody in that it conjured up the image of Jack Daniel’s.

The second element presented a closer and more hotly contested question. The court determined that the “Bad Spaniels” toy did not have to contain some message of ridicule aimed at Jack Daniel’s in order to constitute a parody. It was enough that the toy contained visible features contrasting it from Jack Daniel’s marks, such as the prominent cartoon image of a spaniel dog on the label (not present on Jack Daniel’s label) and the replacement of “Jack Daniel’s” with “Bad Spaniels.” These and other distinctions communicate that the dog toy is a parody. “While ‘Bad Spaniels’ may not contain a message of ridicule about Jack Daniel’s as a brand,” the court said, “the toy’s references to the product containing dog feces in place of alcohol do convey a message of humor to some, and the Court finds that this suffices as a parody.”

Infringement—likelihood of confusion. The conclusion that the “Bad Spaniels” toy was a parody did not obviate the need to conduct a likelihood of confusion analysis. After looking at the Sleekcraft factors, the court concluded that the infringement claim failed. Although there were similarities between the parties’ marks, these were necessary for VIP’s toy to be a successful parody, so that factor favored VIP. And while Jack Daniel’s marks were strong, this factor also “inverted” to favor VIP because a successful parody depended on the widespread recognition of the parodied mark. The court deemed that VIP’s intent to copy Jack Daniel’s marks did not favor Jack Daniel’s because VIP intended to create a parody. With respect to actual confusion evidence, the court noted consumer survey evidence showing that some respondents mistakenly believed that there was a connection between the toy and Jack Daniel’s, the court gave this evidence limited weight because the survey did not account for the fact that the toy was a parody.

Weighing all the factors, the court concluded that Jack Daniel’s did not show that there was a likelihood of confusion, and VIP did not infringe Jack Daniel’s marks. However, because Jack Daniel’s prevailed on its dilution claim, Jack Daniel’s was entitled to permanent injunctive relief and was directed by the court to file a proposed injunction.

The case is No. 2:14-cv-02057-SMM.

Judge: McNamee, S.

Attorneys: Alexandra Crandall (Dickinson Wright PLLC) for VIP Products LLC. Amy Mason Saharia (Williams & Connolly LLP) for Jack Daniel's Properties Inc.

Companies: VIP Products LLC; Jack Daniel's Properties Inc.

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