The Supreme Court Clarifies Trademark Law; Its Implications for the Sports Industry

The Supreme Court Clarifies Trademark Law; Its Implications for the Sports Industry

(Editor’s Note: What follows is a case summary from the most recent Sports Litigation Alert.)

By Jeff Birren, Senior Writer


Licensed merchandise is a significant revenue source for college and professional sports. Team shops, stores and warehouses are over-flowing with licensed merchandise bearing the names, marks, and logos of teams from sea to shining sea, and so, too, for other businesses. Jack Daniel’s, the whiskey maker, frowned on a product that parodied its brand in a chewable dog toy. Litigation followed. The Ninth Circuit was led astray by a prior Second Circuit opinion. Recently the Supreme Court entered the fray. Justice Kagan’s unanimous opinion reversed and remanded the Case. When the infringer uses the protected trademark as the designation of the source of its product, the prior opinion was irrelevant. Trademarks are designed to protect consumers about the product’s source, (Jack Daniel’s Properties, Inc. v. VIP Products LLC, 599 U.S. ___ 2023, No. 22-148 (6-8-23)).

On Your Marks

The Lanham Act, 15 U.S.C. §§ 1051 et seq, “set up a voluntary registration system.” An owner “may apply to the Patent and Trademark Office to get its mark placed on a federal register.” The Act creates a “federal cause of action for trademark infringement.” Typically, the mark’s owner “sues someone using a mark that closely resembles” its mark. The critical question is whether the defendant’s mark “is likely to cause confusion, or cause a mistake, or to deceive.” “Confusion as to source is the bete noire of trademark law.”  The Lanham Act also provides a cause of action “for the dilution of famous marks, which can succeed without likelihood of confusion.” This can happen “by tarnishment”.  A similarity between two marks may harm the reputation of the famous mark.

Jack Daniel’s complete name is “Jack Daniel’s Old No. 7 Tennessee Sour Mash Whiskey.” The company has multiple trademarks including “Jack Daniel’s”, “Old No. 7” and the “arched label” “So, too, are the stylized label and the “distinctive squared bottle.”

Get Set

VIP Products makes chewable dog toys called “Silly Squeakers” because “they squeak when bitten.)” Most of their products “parody—popular beverage brands.” The “Bad Spaniels” toy was added in 2014 though VIP did not register the name “or any other feature of Bad Spaniels.” VIP admitted it uses the Bad Spaniels trademark and trade dress. It was designed to look like the Jack Daniel’s bottle. It is “about the same size and shape” of the Jack Daniel’s bottle, including the label. Above the arch is an image of a spaniel, and below the arch, the words “The Old No. 2 On Your Tennessee Carpet” are used rather than “Old Tennessee No. 7 Sour Mash Whiskey.” It is done in similar graphic form. Instead of “40% alc. by vol. (80% proof)” it says “43% poo by volume” and “100% smelly.” The disclaimer states that it is not associated with Jack Daniel’s. Jack Daniel’s failed to laugh and sent a letter demanding that VIP stop selling the toy.


VIP instead sued Jack Daniel’s for declaratory relief, asserting that it neither infringed nor diluted Jack Daniel’s’ brand. It argued that it owned its “Bad Spaniels trademark and trade dress.” Jack Daniel’s counterclaimed pursuant to the Lanham Act for trademark infringement and dilution by tarnishment.

VIP sought summary judgment on both claims. It claimed First Amendment protection for “expressive works”. VIP further argued that Jack Daniel’s could not prevail on its dilution claim because “Bad Spaniels” was a “parody of Jack Daniel’s and made “fair use” of the famous marks. The District Court rejected both arguments. VIP “used the cribbed Jack Daniel’s features as trademarks—that is, to identify the source of its own products.” The court used the “standard” test: whether the use “is likely to cause consumer confusion.” Following a bench trial, the District Court ruled that consumers were likely to be confused by the source of Bad Spaniels, based largely on survey evidence. For a tarnishment claim, the so-called “parody” exclusion only applies when the use of the famous mark does not designate the source of the goods. It ruled that the toy created “negative associations” with “canine excrement” that would cause Jack Daniel’s “reputational harm.”

The Ninth Circuit Goes Astray

Supposedly the “District Court had gotten the pretrial legal issues wrong”, based on a Second Circuit opinion in Rogers v. Grimaldi, 875 F. 2nd 994 (1989). Rogers created a test for artistic titles that have an expressive element. This, so the reasoning goes, implicates First Amendment values, and therefore carries only a slight risk of confusing customers about the source or content of the work in question. “Bad Spaniels” apparently was an “expressive work” because it “communicates a humorous message.” It consequently remanded the case to the District Court to see if Jack Daniel’s could satisfy the Rogers test. The Ninth Circuit ruled for VIP on the dilution claim. Apparently, the parody meant that the “noncommercial use” of the mark shielded VIP from liability. That, seemingly, was appropriate because Bad Spaniels “parodies” and “comments humorously” on the Jack Daniel’s” mark. The District Court ruled that Jack Daniel’s could not satisfy Rogers and granted VIP summary judgment. The Circuit “summarily affirmed.” The Supreme Court granted certiorari on both claims.

The Supreme Court Disagrees

The Court first addressed the “more substantial question” of whether Jack Daniel’s “had to satisfy the Rogers threshold test before the case could proceed to the Lanham Act’s likelihood-of-confusion inquiry?” It did not decide whether Rogers ever had merit, but rather “we hold that it does not when an alleged infringer uses a trademark in the way the Lanham Act most cares about: as a designation of source for the infringer’s own goods.” VIP’s marks were derived from Jack Daniels’ mark “so the infringement claim here rises or falls on the likelihood of confusion.” That inquiry is not blind to the “expressive aspects” of the toy because in “assessing confusion” “consumers are not so likely to think that the maker of a mocked product is itself doing the mocking.”

“Rogers” is a Fellini film about fictitious cabaret performers who imitated Ginger Rogers and Fred Astaire. Ms. Rogers sued over “the use of her name.” The Second Circuit rejected the claim because the title had an “’expressive element’ implicating First Amendment values.” There was also a very slight risk of consumer confusion. That court admitted “that it was not announcing a general rule.” Subsequent courts confined Rogers when the trademark was used “solely perform some other expressive function.”

However, “whatever you make of Rogers—and again, we take no position of that issue—it has always been a cabined doctrine”, only applied to “non-trademark uses.” The Court gave two examples wherein a defendant claimed that their it parodied the mark at issue and thus passed muster under Rogers. Those courts rejected this defense, and the fight shifted to “the usual battleground of ‘likelihood of confusion.’” This “conclusion fits trademark law, and reflects its primary purpose.”

The Lanham Act “views marks as source identifiers—as things that function to ‘indicate the source’ of goods, and so to ‘distinguish’ them from the one’s ‘manufactured or sold by others.’” Confusion is “most likely to arise when someone uses another’s trademark—meaning again, as a source identifier—rather than for some other expressive purpose.” That result does not change” because the mark “conveys some message on top of source.”

That is where the Court “most dramatically part ways part ways with the Ninth Circuit, which thought that because Bad Spaniels ‘communicates a humorous message’ it is automatically entitled to Rogers’ protection… On that view, Rogers might take over much of the world.” After all, “trademarks are often expressive, in any number of ways.” The “Ninth Circuit was mistaken to believe that the First Amendment demanded the result” it created. When “a mark is used as a mark (except, potentially, in rare situations), the likelihood-of-confusion inquiry does enough work to account for the interest in free expression.”

The District Court “correctly held” that VIP used its trademark and trade dress “as source identifiers of its dog toy” and VIP “conceded that point below.” It “thus represented in this very suit that the mark and dress, although not registered, are used to ‘identify and distinguish [VIP’s] goods’ and to indicate [their] source.” Back pedaling, VIP changed its position, and told the Court that this “was a mere ‘form allegation’—as a matter of ‘rote.’” “But even if we knew what that meant, VIP has said and done more in the same direction.” VIP “has consistently argued in court that it owns, though it has never registered the trademark and trade dress” in its various dog toys. Their conduct is “more than ‘form’ or ‘rote’” behavior. It is an “admission that it is using the Bad Spaniels (nee Jack Daniel’s) trademarks as trademarks, to identify product source.”

“[T]he only question in this suit going forward is whether the Bad Spaniels marks are likely to cause confusion.” There “is no threshold test working to kick out all cases involving ‘expressive works’”. However, “a trademark’s ‘expressive message’” may “properly figure in assessing the likelihood of confusion.” It remanded the case as the Supreme Court “is generally ‘a court of review, not of first view.”

Dilution By Tarnishment

The Ninth Circuit thought that non-commercial use of the mark was permitted simply because it involved a parody. This “fair-use exclusion” by statute “does not apply when the use is ‘as a designation of source for the person’s own goods or services… In that event, no parody, criticism, or commentary will rescue the alleged dilutor. It will be subject to liability regardless.” The Ninth Circuit went astray because it “reverses” the “statutorily directed result.” Parody, “(and criticism and commentary, humorous or otherwise) is exempt only if not used to designate source.” The opinion below “effectively nullifies Congress’s express limit on the fair-use exclusion for parody, etc.”

The Court’s “opinion is narrow”. For “infringement, we hold only that Rogers does not apply when the challenged use of a mark is as a mark. On dilution, we hold only that the noncommercial exclusion does not apply to shield parody or other commentary when its use of a mark is similarly self-identifying. It is no coincidence that both our holdings turn on whether the use of a mark is serving as a source-designation function. The Lanham Act makes that fact crucial”.

Concurring Opinions

Justice Sotomayor concurred, joined by Justice Alito. “[C]ourts should treat the results of surveys with particular caution”, as “merely one piece of the multifaceted likelihood of confusion analysis.” In trademark cases “there is a particular risk in giving uncritical undue weight to surveys.” Surveys “may reflect a mistaken belief” that “all parodies required permission” from the owner of the “parodied mark.”

Justice Gorsuch’s concurring opinion, joined by Justices Thomas and Barrett, stated that lower courts “should handle … Rogers with care.” The Court’s opinion “rightly concludes” that “Rogers does not apply to cases like the one before us.” However, it left unaddressed questions about Rogers, including where the test came from, whether “commanded by the First Amendment” or “merely gloss on the Lanham Act.” It is “not obvious that Rogers is correct in all its particulars”. These issues remain “for another day” and “lower courts should be attuned to that fact.”


The Jack Daniel’s-Bad Spaniels dispute will be returned to the District Court. Unless VIP throws in the towel, along with its unregistered marks, discovery will resume, though likely with some added expert witnesses. Jack Daniel’s should now rely less on survey evidence. After the District Court rules, the case will go back to a chastened Ninth Circuit. Rogers will no longer cloud its judgment.

Daniels is striking.  It is a 9-0 opinion from the current Supreme Court, and “it is about dog toys and whiskey, two items seldom appearing in the same sentence.” The case has direct consequences for all sports organizations. Sports entities are often confronted by those who seek to make a profit by creating products that apparently originate from the entity that owns the underlying trademarks. Litigation constantly follows. Rogers provided an easy out for defendants asserting that their competing trademarks were “expressive works.” As Justice Gorsuch makes clear, Rogers may soon be a relic of the past.

“On your marks” signifies that it is the mark that matters, and how confusing the mark may be to consumers. This is significant. The Lanham Act sanctions are unusually harsh. It can include the defendant’s profits, the damages suffered by the plaintiff, the costs of the suit, treble damages, and in exceptional cases, attorney’s fees (15 U.S.C. §1117). The sports world will see continued Lanham Act litigation, but Daniel’s will keep it consistent with the statute.