Courthouse Steps Oral Argument: Jack Daniel’s Properties, Inc. v. VIP Products LLC

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Sam Fendler:  Hello, and welcome to this Federalist Society virtual event. My name is Sam Fendler, and I’m an Assistant Director of Practice Groups with The Federalist Society. Today, we’re excited to host “Courthouse Steps Oral Argument: Jack Daniel’s Properties Incorporated versus VIP Products, LLC.”

 

      We’re joined today by Adam Mathews. Adam is a member of the Ohio House of Representatives and a practicing attorney with the firm Ashbrook Byrne and Kresge. He is a registered patent attorney, and his practice focuses on a range of intellectual property matters. If you’d like to learn more about Adam, you can read his full bio on our website, fedsoc.org.

 

      After Adam gives his opening remarks, we will turn to you, the audience, for questions. If you have a question, please enter into the Q&A function at the bottom of your Zoom window, and we’ll do our best to answer as many questions as we can. Finally, I’ll note that, as always, all expressions of opinion today are those of our guest speaker and not The Federalist Society.

 

      Adam, thank you very much for joining us today, and the floor is yours.

 

Adam Mathews:  Absolutely. Well, thank you so much, Sam, for having me. Thank you to The Federalist Society, and thank you all for being in the audience today to hear a little bit about Jack Daniels v. VIP Products. We just had oral arguments yesterday, on March 22, 2023, and this is one of the easier-to-grasp cases within the intellectual property field that we’ve had in a long time. It’s distinct in that trademark law is a little bit easier to understand, as well as we don’t have the confounding factors of -- normally, when we get intellectual property cases, it’s coming up through the federal circuit. Here, this is coming from the Ninth Circuit.

 

      So as to part of the background on the case, there is Jack Daniels—a famous bourbon distributor -- has its famous bottle. I’m sure if I mention it right now could conjure up its type of more squarish bottom with its neck and coloration, and they’re famous worldwide and a strong brand. There is a company, VIP Products, which attempts to make humorous products—dog toys, chew toys, stress relievers, things that you may find online or at Spencer’s Gifts or Hot Topics or other types of stores with gifts that way. And they had a product called Bad Spaniels, which -- in the similar script as Jack Daniels, with a little Basset hound on it, and instead of Jack Daniels No. 2, it said, “Bad Spaniels No. 2” -- made many jokes about urination and other types of products. It’s the type that references to -- relevant to a dog chew toy.

 

      Jack Daniels sent a cease and desist letter, in Arizona, to VIP Products on this, and VIP Products responded, asking for a declaratory judgment. Jack Daniels won at the district level. VIP Products appealed, and the Ninth Circuit Court of Appeals found, under a use of the Rogers Test—which is normally used for movie titles and other types of works that way—that the Bad Spaniels was a parody and was -- using the Rogers Test, said, “Divorced from the artistic elements and not misleading, this shouldn’t be held to have First Amendment protections,” and remanded it accordingly.

 

      The district court held, under those rulings, for VIP. Jack Daniels has appealed on up to the Supreme Court now. So the two questions really are—before the Court—what type of test, if any, does the Rogers Test—which it applies to -- it comes out of the Second Circuit for that. And I’ll get a little bit into where the Rogers Test comes from, as well as does that apply? Is there a special stringent First Amendment protection for parody, or is the Lanham Act, which is normally used for trademarks, the more sufficient way? The Rogers Test, again, comes from the Second Circuit, where Ginger Rogers, a famous celebrity, sued a movie that was called Fred and Ginger, and that was really not about them. It was about some other dancers outside of the United States, but it was about them.

 

      Looking at other hypotheticals -- the—sorry about that—other hypotheticals would be if you had a movie about a man that brings bats to a famous home run king and you called him the Batman, it would be something similar, where if it’s not misleading and it’s relevant to the art underneath it, then it’s fine. Here, they said the same thing with Bad Spaniels and moved that way.

 

      Last week, at A Seat at the Sitting, I said, “Normally, Justice Thomas is the one that really digs into the intellectual property questions.” At the oral argument yesterday, he was the one to lead off.  And he was really trying to find what type of test, what type of process, that we’re looking at, to see how do we manage and balance that type of right to speech, as well as the property rights. Justice Alito was trying to pin down Ms. Blatt—the attorney for Jack Daniels—on, “When is this speech? Are you trying to limit speech?” And she responded, saying, “Intellectual property necessitates a limitation on speech. If it is a limited monopoly granted to property owners -- and that’s part of the bundle of sticks that the property owners have is to limit speech to use what you can. Someone cannot just make Coca Cola or Nike t-shirts, and that’s limiting speech.

 

      The oral argument was really enjoyable to listen to. I think I searched how many times laughter showed up in the transcript, and it was at least a dozen, which is rare. But you could -- the subject matter lends itself to that type of levity, but it is a serious situation on where do we find that balance? Listening to the questions, I don’t know where the justices may be going. That’s a fool’s game to try to guess how they’re going to vote based on questioning.

 

      But the hypotheticals there were somewhat illuminating. Justice Sotomayor created a hypothetical on if someone would use an animal logo—a donkey or an elephant—and make it drunk, put it on a t-shirt, and say, “It’s time for the country to sober up,” showing that drunk animal. And would that be protected? People thought that was funny, but it does get to the root of how far is -- where does parody hit, and where is it related? 

 

      The attorney, Ms. Blatt, for Jack Daniels, tried to distinguish between parody that is directed towards the underlying product versus that is trying to use the name for commercial benefit. A distinction, say, where there’s a case with De Beers, where there’s a shirt that has diamonds and has graphic representations of the exploitation of people in the diamond trade, and she said that would be protected under parody. However, the film, earlier—an adult film using the Dallas Cowboys as part of its branding—would not be because that’s not commentary on the Cowboys; it’s just using the name and the branding for the benefit of the piece of art. So that is, really, where that argument was going. 

 

      The questions towards the respondents—to VIP Products—was much more on what type of limitations, what type of tests are there that could work—much more on First Amendment grounds—how far could things go? It should be noted that the respondent’s attorneys were much more limited in what they were pushing for compared to many of the amicus briefs on their behalf. Many of the amicus briefs were saying, “People should have free rein to use the marks as they see fit for freedom of speech.”

 

      I believe the respondents were going much more for narrow victory, and Jack Daniels was looking for a broader type of answer. And Justice Jackson was really questioning why you’re trying to go so broadly because at the heart of the question is—that the Ninth Circuit put forward -- was how do -- it said that parody is not commercial. And that was a really deep question because then, is a movie not commercial? Example given was, “Is a tapestry versus a wallpaper commercial or artistic?” -- and trying to get a clean answer for those that own intellectual property for the Court to decide.

 

      So that is, really, what we’re sitting at here. I’m not going to make a guess as to what’s going to happen, but I’ll open it up to questions, and that’s where we are.

 

Sam Fendler:  That’s great. Thank you very much, Adam, for those remarks and for giving us a place to start understanding this case. We’ll now turn to audience questions. If you have a question, again, please enter it into the Q&A function at the bottom of your screen.

 

      Adam, I want to start by asking a question about this broad versus narrow argument. We heard it from several of the justices, but Justice Kagan opened up the question very early on. It may have even been one of the first questions that she asked petitioner. And what she is there’s -- and you mentioned this a bit, but she said, “There’s a broad way for Jack Daniels to win this case. There’s a narrow way for Jack Daniels to win this case.” My understanding is that the broad way has more to do with the Rogers Test—whatever this judicially constructed test is for understanding what we’re dealing with -- perhaps overruling or replace that. That’s the broad way. And the narrow way is just to say, “Hey. On the merits, in the structure that we have right now, this dog toy is infringing on our brand.” Can you talk a little bit more about this broad versus narrow—break it down and understand where the case may go?

 

Adam Mathews:  Sure. So I’ll do the narrow first. The narrow, if you’re looking at the Lanham Act and say, “What’s the likelihood of confusion? What’s the economic impact? Are there competitive products?” And the facts of this case are Jack Daniels does sell dog products, so they are in that space. It could be that Jack Daniels would license in this area. And they don’t make the ones exactly the same—that VIP Products makes—but they could be in that space. And the type of trade design, trade dress, would cause someone to think, yes, Jack Daniels could license this out, and VIP Products is using that likeness, using that goodwill, of Jack Daniels to sell their product. The end. Like, that’s the answer. That could be done at many, many civil litigations elsewhere.

 

      The stronger, broader question is, “Do we keep using the Rogers Test? Do we apply the Rogers Test that looks to be expansive coming from the movie space—from the title space—into commercial products? Do we allow that test to continue?” The petitioner would say, “No. We shouldn’t do that.” A lot of the questioning along there is on origin rather than misleading or creative elements. And the petitioner would say, “No. We don’t need to use the Rogers Test. We can rely on the Lanham Act. We should deny the Rogers Test—” escaping the quarantine of just movie titles. And that would be a much broader question, as well as potentially defining what dilution of mark means, saying that trademark -- part of the communication -- part of the argument was saying, “Trademarking copyright and intellectual property even predate the First Amendment,” saying that having the ability to create goodwill in a name or a likeness or a logo has been recognized for centuries. And that should be protected, as well, against dilution even if you’re not in that same space. As long as what you’re doing is not a commentary on the underlying product or underlying mark, then that should not be allowed. So that would be the much broader question that could go.

 

Sam Fendler:  So in either case, whether -- it doesn’t necessarily matter where the justices take this. It doesn’t matter if it goes to a narrow or a broad, insofar as any way that this plays out, the justices are going to have to decide on the confusion of source or the infringement in the dilution. So those are two main factors in this case, and I -- as a layperson, I would assume in every IP case. But can you talk to us a little bit about those two elements: the infringement or the confusion and the dilution?

 

Adam Mathews:  Sure. For the Lanham Act, you can have either confusion of source or dilution, where it looks like it’s coming from somebody -- that you’re pretending that I am the one that either’s geographical or corporation or otherwise, saying, “This is the same product that you expect.” If someone else made Pampers gym shorts for children, many would assume that’s coming from P&G, even though they’re not in that space. And as such, that could be likelihood of confusion that you are moving into that space. So a question is often -- and there was some digression on surveys of what would the normal consumer think of where is this coming from? Sometimes things can be so distinct that there’s no issue of confusion. For example, there’s both Burlington Mattress and Burlington Coat Factory. Those are different companies and have been able to get marked the same way because it’s seen as a relatively localized mark and not as creative and out of the way. We’re often taught that the more exotic or esoteric series of syllables or logos are, the stronger it is. An example given is -- Exxon is a made-up word. Sea-Doo is a made-up word. And so, those are much stronger marks that if you see those anywhere else, you assume that they’re tied into the originators.

 

      The next level after that is uses of words that do not relate to what you’re doing. So Apple computers has nothing to do with the fruit, but that is still a very strong mark because it’s not related to computing. Down the line, Microsoft has become larger, but it is somewhat related to micro packets of software, so it would not be -- when you’re looking on these types of tests without looking on the business side of things, just that the marks in and of themselves, lend themselves, more or less, to confusion, if you’re using them. So that is where the confusion comes in.

 

      Dilution is similar but is -- if used, is disparaging the mark in a way not really intended in that space. So you may not -- you might not think that a -- if there’s a company, if there’s a -- someone starts selling old, repurposed cars and putting Nike on it, many people won’t think that’s Nike, but it weakens the mark in the space. And so, that’s dilution. It’s connecting it with low-quality products or products in which they don’t want to operate. Many of the amicus briefs talked about how advertising could get lewd and gross if this type of holding would be -- as long as it’s -- someone thinks it’s funny, you can use a mark, really, however you want is how that could breakdown if that’s how -- if that’s how the Court comes down.

 

      One of the amicus briefs filed on behalf of, I believe, Wholesale Beer and Wine or others talked about, “You’re going to have all types of joke shirts, products, and otherwise targeted to kids, targeted to different markets with half jokes on Budweiser, marijuana, other types of marks that exist in that space—in highly regulated areas. So that is where dilution can get in, and looking at this space is a way that you’re trying to balance that. And that is all under the Lanham Act inquiries. So, great. I think we have questions.

 

Sam Fendler:  Absolutely. That’s very helpful. That’s helpful. Adam, one of our attendees is wondering what you found to be Jack Daniels’s weakest argument on the trademark infringement claim and how you might reframe that argument?

 

Adam Mathews:  Sure. I believe Jack Daniels’s weakest argument was -- I think it was probably -- the weakest argument was that there wasn’t anything creative in the parody of Bad Spaniels. It is clearly different enough. There are things, if you look in the design patent world -- that there’s things that are inherent in a bottle of bourbon that has to have that shape. There’s things that are inherent there that has that label. And while the Jack Daniels has a distinctive trade dress, Bad Spaniel’s -- it’s a joke. Mad Magazine has, for years, taken off slight variations of celebrities or brands and mocked them in that way. And I do think that Bad Spaniels and VIP had legitimate creative elements there that could be protected as trademarked if they were stand alone. I think I would rephrase that—if I were on Jack Daniels’s side—to argue that while these are creative elements and while they may exist in parody, they are not directed to parodying Jack Daniels itself. It is parodying the experience of raising dogs. It is parodying defecation. It is parodying those types of elements.

 

      And we’ve seen with the Dr. Seuss cases and otherwise, you can do parody when you are using the parody to critique or comment upon the underlying work. Here, the only underlying work -- the only comment that was said back by the respondent’s attorneys on this type of space was, “Well, Jack Daniels is kind of full of itself, and so we’re mocking them for that.” But that isn’t apparent anywhere within the Bad Spaniels product, and so that would be a way, I think, could be reframed stronger. I hope that answers that question.

 

Sam Fendler:  Absolutely. Do you have any -- this comes from another one of our attendees. Do you have any sense of if the parties have given thought to how this ruling may affect other types of IP rights and to give some context? The idea is that maybe a ruling that is too broadly in favor of Jack Daniels could risk silencing some people—maybe some First Amendment implications there. On the other hand, a ruling that is too narrow in favor of the dog toy company, it risks the ruling possibly not being applicable in other cases and, therefore, may not actually achieve a clear precedent. Just for some bookending on the question, but have you given any of this some thought, or do you think the parties have?

 

Adam Mathews:  Sure. I think VIP would just be happy with a win, so I don’t think they’re really looking out for that many. I think some of the amicus briefs are. So I think they just -- they want to win and keep having their product. And then the -- what is it called? If it’s too broad in favor of Jack Daniels, I think having the -- there’s definitely the First Amendment rights issues that you have a chilling effect on parody, on chilling effect on use.

 

      Say, if you went way too broadly, you could say -- it would be a -- not only get rid of the Rogers Test, you get rid of the Polaroid Test. You get rid of all these other elements and say, you could have an infringement suit for the use of non-approved vehicles in the background shots of TV shows, and say, “Well, I wouldn’t have wanted my car in that zombie show, so that’s a dilution of my mark.” That’s generally found like, “No. No one knows -- no one thinks that an upside down F150 at the back of dystopian Georgia says anything bad about F150 or that F150 was there—that Ford was there. But that could be, if it opens up too far, a way to -- that could be unleashed. I think some of the amicus briefs talk about that a little bit. And the other is -- say it is held too tightly -- the example given by Justice Sotomayor with the political speech because you do have trademark registrations in the political realm. Does that chill the use of mockery and parody within that space?

 

Sam Fendler:  Certainly. We got a -- this is an interesting question from our audience. If Campbell’s Soup found Warhol’s famous painting unflattering, would that be the same analysis as we have in this case, or does the sort of crude, disparaging humor that we have in the Jack Daniels case make it different? To put another way, is art more entitled to, I guess, a larger latitude than an article of manufacture or what I think the justice is referring to as a utilitarian product in the argument?

 

Adam Mathews:  Right. I believe—at least, what was being argued—the plaintiff in oral argument was saying that the Campbell’s Soup would be fine even if it were disparaging in the same way that the De Beers shirt is still disparaging, but it’s directed towards the element there. So if having a commercial product that’s riding in the wake of a brand helps -- well, it hurts the case of those making the commercial element. If Bad Spaniels made a -- put this back -- if VIP made the Bad Spaniels and just said straight up, “We think Jack Daniels tastes like urine, and so we’re making this joke, and we make a shirt, and we put billboards up saying it,” that would probably be fine. I mean, Jack Daniels would not be happy but would not have this type of infringement or dilution. If it started, then, making a brand of it itself, I think that’s where it starts becoming commercial utilitarian practice and would get into more space.

 

Sam Fendler:  That’s helpful. Thanks, Adam. Well, Adam, we’re two minutes away from the top of the hour, and I know that you’re a busy man. It looks like you’re in the Ohio house right now, doing the people’s work, but before you leave, I was curious if you had any parting wisdom, any final thoughts that you wanted to share?

 

Adam Mathews:  Grateful for The Federalist Society. Thank you for your interest, everyone on the call. It is great that the niche elements of IP get to make it on the big stage every -- from now and then, and I’m excited to see how this one turns out. Thanks for having me.

 

Sam Fendler:  Excellent. Thanks a lot, Adam. Well, on behalf of The Federalist Society, I want to thank you for the benefit of your time and expertise today. And to our audience, I want to thank you as well for joining us. We greatly appreciate your participation. Please check out our website, fedsoc.org, or you can follow us on all major social media platforms at FedSoc to stay up to date with announcements and upcoming webinars. Thank you all, once more, for tuning in, and we are adjourned.

 

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