Summary
The Ninth Circuit vacated a permanent injunction entered in favor of Jack Daniel’s Properties, Inc. and remanded for judgment in favor of VIP Products, LLC on the trademark-dilution claim. The court held that Jack Daniel’s failed to prove that VIP’s “Bad Spaniels” mark and dog-toy trade dress were likely to harm the reputation of the famous “Jack Daniel’s” mark and registered trade dress under the Trademark Dilution Revision Act. The court also concluded that the record established fame for “Jack Daniel’s” and its trade dress, but not independently for “Old No. 7.”
Topics
Practice areas
Questions Presented
- What elements must a plaintiff establish to prevail on a claim for dilution by tarnishment under the Trademark Dilution Revision Act?
- Whether Jack Daniel's proved that the specific senior marks at issue were famous under the TDRA, including whether fame could be borrowed from the “Jack Daniel's” mark to establish fame for “Old No. 7.”
- Whether Jack Daniel's proved that Bad Spaniels or its trade dress created an association with the corresponding famous marks likely to harm their reputations.
- Whether the court could consider the obvious parodic nature of Bad Spaniels in evaluating likelihood of dilution by tarnishment.
- Whether the district court's permanent injunction and judgment in favor of Jack Daniel's should stand.
Holdings
- To prove dilution by tarnishment, a plaintiff must establish that its mark is famous, the allegedly diluting mark is similar to the famous mark, and the allegedly diluting mark creates a mental association with the famous mark likely to damage the famous mark's reputation.
- A plaintiff may not establish the fame of one senior mark by borrowing fame from another; fame must be assessed separately for each allegedly famous mark under the TDRA's statutory factors.
- Jack Daniel's failed to prove that Bad Spaniels or the toy's trade dress was likely to harm the reputation of the corresponding famous “Jack Daniel's” mark and registered trade dress.
- The obvious parodic nature of a source-identifying junior mark is relevant to whether the plaintiff has established a likelihood of dilution by tarnishment, even though parody is not automatically a complete defense and cannot invoke the TDRA's noncommercial-use exception when the mark is used as a source identifier.
Key quotations
“To prove dilution of its mark by tarnishment, the plaintiff must establish that its mark is famous, the allegedly diluting mark is similar to the famous one, and the diluting mark creates a mental association with the famous mark likely to damage the famous mark’s reputation.” (7)
“Thus, when conducting a tarnishment analysis, courts may only consider the dilutive effect of a junior mark that is similar to a corresponding famous mark.” (14-15)
“Failing to consider the effect of VIP’s obvious parody on the likelihood of tarnishment was a critical misstep, and the district court erred in adopting the conclusions that followed.” (27)
Factual background
VIP Products created and sold Bad Spaniels, a parody dog toy shaped like a Jack Daniel's whiskey bottle and using altered versions of Jack Daniel's labeling and trade dress. The toy substituted phrases such as “Bad Spaniels,” “Old No. 2 On Your Tennessee Carpet,” “43% POO BY VOL.,” and “100% SMELLY.” Jack Daniel's owned the famous “Jack Daniel's” mark and registered trade dress, but the Ninth Circuit concluded that the record did not independently establish fame for “Old No. 7.” Jack Daniel's relied principally on expert testimony using generic consumer-psychology research rather than a study of Bad Spaniels specifically to show that the toy was likely to harm the reputation of the famous marks.
Procedural history
VIP sued for a declaratory judgment that its Bad Spaniels dog toy did not infringe or dilute Jack Daniel's trademarks, and Jack Daniel's counterclaimed for infringement and dilution. After a bench trial, the district court found infringement and dilution and entered a permanent injunction. The Ninth Circuit reversed on dilution and vacated on infringement, the district court later granted VIP summary judgment on both claims, and the Ninth Circuit summarily affirmed. The Supreme Court vacated and remanded, holding that the Rogers test and the TDRA's noncommercial-use exception did not apply because VIP used the challenged marks as source identifiers. On remand, the district court found no infringement but held VIP liable for dilution by tarnishment, rejected VIP's constitutional challenge as waived, and entered a permanent injunction; the Ninth Circuit vacated the injunction and remanded for entry of judgment in VIP's favor on the tarnishment claim.
Remand instructions
Vacate the district court's permanent injunction and judgment in favor of Jack Daniel's on the dilution-by-tarnishment claim, and remand for entry of judgment in favor of VIP Products.