The Ninth Circuit has reversed a permanent injunction by the District of Arizona after ruling that Jack Daniels failed to prove that the defendant’s “Bad Spaniels” parody dog toy caused dilution by tarnishment.
“This case is about dog toys and whiskey, two items seldom appearing in the same sentence,” noted the court.
The court explained that
In 1996, Congress created the first federal cause of action for dilution. See Federal Trademark Dilution Act of 1995 (FTDA), Pub. L. No. 104-98, § 3(a), 109 Stat. 985, 985 (1996). The purpose of the antidilution provision was “to protect famous trademarks from subsequent uses that blur the distinctiveness of the mark or tarnish or disparage it, even in the absence of a likelihood of confusion.”
To assuage First Amendment concerns, noted the court, ‘Congress included exceptions for “fair use,” noncommercial use of registered marks, and “[a]ll forms of news reporting and news commentary.”’
As the court explained,
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.
Jack Daniel’s Properties, Inc. (JDPI) has held trademarks for “Jack Daniel’s” since 1875 and “Old No. 7” since 1904.
JDPI also holds a trademark for the three-dimensional square-shaped bottle it uses for Jack Daniel’s Tennessee whiskey, and additional trademarks for the arched Jack Daniel’s logo, stylized label, and filigree. JDPI’s marks have been used by the company continuously for over a century — except during Prohibition.
VIP Products, LLC designs, manufactures, and sells dog toys, including a “parody line” of toys shaped like beer bottles, wine bottles, and liquor bottles – including “Bad Spaniels,” based on the Jack Daniels bottle.
Other toys have names like “Smella RCrotches,” “Heini Sniff’n,” “Pissness,” “Dos Perros,” “Smella Arpaw,” and “Doggie Walker.”
As the court noted,
“Bad Spaniels” replaced “Jack Daniel’s”; “Old No. 2” replaced “Old No. 7”; and “Tennessee carpet” replaced “Tennessee whiskey.” At the bottom of the toy are the words “43% POO BY VOL.,” in place of standard alcohol-by-volume language, and “100% SMELLY.” The top of the label features, as the district court put it, “a wide-eyed spaniel.” The back of the toy includes a disclaimer stating that the “product is not affiliated with Jack Daniel Distillery.” The toy is in the shape of a square liquor bottle, and, like Jack Daniel’s Old No. 7 whiskey, features a black label with white lettering and filigree.
Soon after VIP introduced Bad Spaniels in 2014, JDPI demanded that VIP stop selling the toy.
JDPI argued that the “Bad Spaniels” toy diluted its trademarks “by associating the famed whiskey with,” as the Supreme Court put it, “dog excrement.”
More than ten years of litigation ensued, including the trip to the US Supreme Court.
In 2018, a district court entered a permanent injunction in favor of JDPI.
In its latest ruling, the Ninth Circuit found that expert testimony did not establish that the Bad Spaniels’ dog toy tarnished the “Jack Daniel’s” mark and trade dress because the record didn’t show that the trade dress and “Jack Daniel’s” mark were “portrayed in an unwholesome or unsavory context that was likely to tarnish the reputation of the famous marks.”
The court noted that
Bad Spaniels is a parodic dog toy not intended for human consumption. There is no evidence in the record from which a court could reasonably infer that scatological references made on a dog toy have the same likelihood of generating disgust as identical references on a consumable product meant for humans might.
The court thus held that JDPI was not entitled to an injunction for dilution by tarnishment, vacated the district court’s permanent injunction to JDPI, and remanded for entry of judgment in VIP’s favor.
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