Vip Products LLC v. Jack Daniel's Properties, Inc.

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
VIP PRODUCTS LLC, an Arizona No. 18-16012
limited liability company,
Plaintiff-Counter-Defendant- D.C. No.
Appellant, 2:14-cv-02057-
SMM
v.
JACK DANIEL’S PROPERTIES, INC., a OPINION
Delaware corporation,
Defendant-Counter-Plaintiff-
Appellee.
Appeal from the United States District Court
for the District of Arizona
Stephen M. McNamee, District Judge, Presiding
Argued and Submitted February 7, 2020
Arizona State University, Phoenix
Filed March 31, 2020
Before: A. Wallace Tashima, Andrew D. Hurwitz,
and Eric D. Miller, Circuit Judges.
Opinion by Judge Hurwitz
2 VIP PRODUCTS V. JACK DANIEL’S PROPERTIES
SUMMARY *
Trademark
The panel affirmed in part, vacated in part, and reversed
in part the district court’s judgment after a bench trial and
permanent injunction in favor of Jack Daniel’s Properties,
Inc., in a trademark suit brought by VIP Products, LLC,
concerning VIP’s “Bad Spaniels Silly Squeaker” dog toy,
which resembled a bottle of Jack Daniel’s Old No. 7 Black
Label Tennessee Whiskey but had light-hearted, dog-related
alterations.
The panel affirmed the district court’s summary
judgment in favor of Jack Daniel’s on the issues of aesthetic
functionality and distinctiveness. The panel held that the
district court correctly found that Jack Daniel’s trade dress
and bottle design were distinctive and aesthetically
nonfunctional, and thus entitled to trademark protection.
Accordingly, the district court correctly rejected VIP’s
request for cancellation of Jack Daniel’s registered
trademark. The district court also correctly rejected VIP’s
nominative fair use defense because, although the Bad
Spaniels toy resembled Jack Daniel’s trade dress and bottle
design, there were significant differences between them,
most notably the image of a spaniel and the phrases on the
Bad Spaniels label.
Vacating the district court’s judgment on trademark
infringement, the panel concluded that the Bad Spaniels dog
toy was an expressive work entitled to First Amendment
*
This summary constitutes no part of the opinion of the court. It
has been prepared by court staff for the convenience of the reader.
VIP PRODUCTS V. JACK DANIEL’S PROPERTIES 3
protection. Accordingly, the district court erred in finding
trademark infringement without first requiring Jack Daniel’s
to satisfy at least one of the two prongs of the Rogers test,
which requires a plaintiff to show that the defendant’s use of
a mark is either (1) not artistically relevant to the underlying
work or (2) explicitly misleads consumers as to the source or
content of the work.
The panel reversed the district court’s judgment on
claims of trademark dilution by tarnishment. Although VIP
used Jack Daniel’s trade dress and bottle design to sell Bad
Spaniels, they were also used to convey a humorous
message, which was protected by the First Amendment. VIP
therefore was entitled to judgment in its favor on the federal
and state law dilution claims.
In summary, the panel affirmed the district court’s
summary judgment in favor of Jack Daniel’s on the issues of
aesthetic functionality and distinctiveness, affirmed the
judgment as to the validity of Jack Daniel’s registered mark,
reversed the judgment on the issue of dilution, vacated the
judgment after trial on the issue of infringement, and
remanded for further proceedings. The panel also vacated
the permanent injunction prohibiting VIP from
manufacturing and selling the Bad Spaniels dog toy.
COUNSEL
David G. Bray (argued), David N. Ferrucci, and Holly M.
Zoe, Dickinson Wright PLLC, Phoenix, Arizona, for
Plaintiff-Counter-Defendant-Appellant.
D. Peter Harvey (argued), Harvey & Company, San
Francisco, California; Isaac S. Crum, Rusing Lopez &
4 VIP PRODUCTS V. JACK DANIEL’S PROPERTIES
Lizardi PLLC, Tucson, Arizona; for Defendant-Counter-
Plaintiff-Appellee.
OPINION
HURWITZ, Circuit Judge:
VIP Products sells the “Bad Spaniels Silly Squeaker”
dog toy, which resembles a bottle of Jack Daniel’s Old No.
7 Black Label Tennessee Whiskey, but has light-hearted,
dog-related alterations. For example, the name “Jack
Daniel’s” is replaced with “Bad Spaniels,” “Old No. 7” with
“Old No. 2,” and alcohol content descriptions with
“43% POO BY VOL.” and “100% SMELLY.” After Jack
Daniel’s Properties, Inc. (“JDPI”) demanded that VIP cease
selling the toy, VIP filed this action, seeking a declaration
that the toy did not infringe JDPI’s trademark rights or, in
the alternative, that Jack Daniel’s trade dress and bottle
design were not entitled to trademark protection. JDPI
counterclaimed, asserting trademark infringement and
dilution. After ruling on cross-motions for summary
judgment and conducting a four-day bench trial, the district
court found in favor of JDPI and issued a permanent
injunction enjoining VIP from manufacturing and selling the
Bad Spaniels toy.
We affirm the district court’s summary judgment in
favor of JDPI on the issues of aesthetic functionality and
distinctiveness. However, because the Bad Spaniels dog toy
is an expressive work entitled to First Amendment
protection, we reverse the district court’s judgment on the
dilution claim, vacate the judgment on trademark
infringement, and remand for further proceedings.
VIP PRODUCTS V. JACK DANIEL’S PROPERTIES 5
I
A. Factual Background
VIP designs, markets, and sells “Silly Squeakers,”
rubber dog toys that resemble the bottles of various well-
known beverages, but with dog-related twists. One Silly
Squeaker, for example, resembles a Mountain Dew bottle,
but is labeled “Mountain Drool.” VIP’s purported goal in
creating Silly Squeakers was to “reflect” “on the
humanization of the dog in our lives,” and to comment on
“corporations [that] take themselves very seriously.” Over a
million Silly Squeakers were sold from 2007 to 2017.
In July of 2013, VIP introduced the Bad Spaniels
squeaker toy. The toy is roughly in the shape of a Jack
Daniel’s bottle and has an image of a spaniel over the words
“Bad Spaniels.” The Jack Daniel’s label says, “Old No. 7
Brand Tennessee Sour Mash Whiskey;” the label on the Bad
Spaniels toy instead has the phrase “the Old No. 2, on your
Tennessee Carpet.” A tag affixed to the Bad Spaniels toy
states that the “product is not affiliated with Jack Daniel
Distillery.”
B. Procedural History
In 2014, JDPI “demand[ed] that VIP cease all further
sales of the Bad Spaniels toy.” VIP responded by filing this
action, seeking a declaration that the Bad Spaniels toy “does
not infringe or dilute any claimed trademark rights” of JDPI
and that Jack Daniel’s trade dress and bottle design are not
entitled to trademark protection. The complaint also sought
cancellation of the Patent and Trademark Office registration
for Jack Daniel’s bottle design. JDPI counterclaimed,
alleging state and federal claims for infringement of JDPI’s
trademarks and trade dress, see 15 U.S.C. §§ 1114(1),
6 VIP PRODUCTS V. JACK DANIEL’S PROPERTIES
1125(a)(1); A.R.S. §§ 44-1451, et seq., and dilution by
tarnishment of the trademarks and trade dress, see 15 U.S.C.
§ 1125(c); A.R.S. § 44-1448.01.
VIP moved for summary judgment, and JDPI cross-
moved for partial summary judgment. The district court
denied VIP’s motion and granted JDPI’s. The district court
held that VIP was not entitled to the defenses of nominative
and First Amendment fair use. The district court rejected the
nominative fair use defense because VIP “did not use JDPI’s
identical marks or trade dress in its Bad Spaniels toy.” The
district court rejected JDPI’s First Amendment defense
because the trade dress and bottle design were used “to
promote a somewhat non-expressive, commercial product.”
The district court also found as a matter of law that Jack
Daniel’s trade dress and bottle design were distinctive, non-
generic, and nonfunctional, and therefore entitled to
trademark protection. This left for trial only JDPI’s dilution
by tarnishment claims and whether JDPI could establish the
likelihood of confusion for trademark infringement. See
Kendall-Jackson Winery, Ltd. v. E. & J. Gallo Winery,
150 F.3d 1042, 1046–47 (9th Cir. 1998) (“To state an
infringement claim . . . a plaintiff must meet three basic
elements: (1) distinctiveness, (2) nonfunctionality, and
(3) likelihood of confusion.”).
After a four-day bench trial, the district court found that
JDPI had established dilution by tarnishment and
infringement of JDPI’s trademarks and trade dress. The
court permanently enjoined VIP “from sourcing,
manufacturing, advertising, promoting, displaying,
shipping, importing, offering for sale, selling or distributing
the Bad Spaniels dog toy.”
VIP PRODUCTS V. JACK DANIEL’S PROPERTIES 7
II
We have jurisdiction of VIP’s appeal under 28 U.S.C.
§ 1291. We review the grant of summary judgment and the
district court’s conclusions of law following a bench trial de
novo. See Lenz v. Universal Music Corp., 815 F.3d 1145,
1150 (9th Cir. 2016); Dolman v. Agee, 157 F.3d 708, 711
(9th Cir. 1998). The “district court’s findings of fact
following a bench trial are reviewed for clear error.” Id. at
711.
A. Aesthetic Functionality and Distinctiveness
To obtain trademark protection, a product’s trade dress
or design must be nonfunctional and distinctive. See Wal-
Mart Stores, Inc. v. Samara Bros., Inc., 529 U.S. 205, 210
(2000); Talking Rain Beverage Co., Inc. v. S. Beach
Beverage Co., 349 F.3d 601, 603 (9th Cir. 2003). “[T]he
proper inquiry is not whether individual features of a product
are functional or nondistinctive but whether the whole
collection of features taken together are functional or
nondistinctive.” Kendall-Jackson Winery, 150 F.3d at 1050.
The district court correctly found Jack Daniel’s trade
dress and bottle design are distinctive and aesthetically
nonfunctional. Although whiskey companies use many of
the individual elements employed by JDPI on their bottles,
the Jack Daniel’s trade dress “is a combination [of] bottle
and label elements,” including “the Jack Daniel’s and Old
No. 7 word marks,” and the district court correctly found that
these elements taken together are both nonfunctional and
distinctive. See Tie Tech, Inc. v. Kinedyne Corp., 296 F.3d
778, 785 (9th Cir. 2002) (stating that “‘an assurance that a
particular entity made, sponsored, or endorsed a product,’
. . . if incorporated into the product’s design by virtue of
arbitrary embellishment” is not functional (quoting Vuitton
8 VIP PRODUCTS V. JACK DANIEL’S PROPERTIES
et Fils S.A. v. J. Young Enters., Inc., 644 F.2d 769, 774 (9th
Cir. 1981))).
VIP also failed to rebut the presumption of
nonfunctionality and distinctiveness of the Jack Daniel’s
bottle design, which is covered by Trademark Registration
No. 4,106,178. See Tie Tech, 296 F.3d at 783 (“[T]he
plaintiff in an infringement action with a registered mark is
given the prima facie or presumptive advantage on the issue
of validity, thus shifting the burden of production to the
defendant to prove otherwise.”). None of the evidence cited
by VIP demonstrates that, “taken together,” the elements of
the bottle design registration—including “an embossed
signature design comprised of the word ‘JACK
DANIEL’”—are functional or nondistinctive. The district
court therefore correctly rejected VIP’s request for
cancellation of the registered mark.
B. Nominative Fair Use Defense
The district court also correctly rejected VIP’s
nominative fair use defense. Although the Bad Spaniels toy
resembles JDPI’s trade dress and bottle design, there are
significant differences between them, most notably the
image of a spaniel and the phrases on the Bad Spaniels label.
These differences preclude a finding of nominative fair use.
See Playboy Enters., Inc. v. Welles, 279 F.3d 796, 801 (9th
Cir. 2002); E.S.S. Entm’t 2000, Inc. v. Rock Star Videos, Inc.,
547 F.3d 1095, 1099 (9th Cir. 2008) (finding nominative fair
use defense did not apply where mark was “not identical to
the plaintiff’s” mark).
C. First Amendment Defense
“In general, claims of trademark infringement under the
Lanham Act are governed by a likelihood-of-confusion test,”
VIP PRODUCTS V. JACK DANIEL’S PROPERTIES 9
Twentieth Century Fox Television v. Empire Distribution,
Inc., 875 F.3d 1192, 1196 (9th Cir. 2017), which seeks to
strike the appropriate balance between the First Amendment
and trademark rights, see Gordon v. Drape Creative, Inc.,
909 F.3d 257, 264 (9th Cir. 2018). The likelihood-of-
confusion test requires that the plaintiff have “a valid,
protectable trademark” and defendant’s “use of the mark is
likely to cause confusion.” S. Cal. Darts Ass’n v. Zaffina,
762 F.3d 921, 929 (9th Cir. 2014) (quoting Applied Info.
Scis. Corp. v. eBAY, Inc., 511 F.3d 966, 969 (9th Cir. 2007)).
When “artistic expression is at issue,” however, the
general likelihood-of-confusion test “fails to account for the
full weight of the public’s interest in free expression.”
Gordon, 909 F.3d at 264 (quoting Mattel, Inc. v. MCA
Records, 296 F.3d 894, 900 (9th Cir. 2002)). Accordingly,
we have held that the Lanham Act only applies to expressive
works if the plaintiff establishes one of the two requirements
in the test set forth in Rogers v. Grimaldi, 875 F.2d 994 (2d
Cir. 1989). See MCA Records, 296 F.3d at 902 (adopting
Rogers test for use of a trademark in the title of an expressive
work); see also Gordon, 909 F.3d at 267 (noting that after
MCA Records, this Court “extended the Rogers test beyond
a title”). Rogers requires the plaintiff to show that the
defendant’s use of the mark is either (1) “not artistically
relevant to the underlying work” or (2) “explicitly misleads
consumers as to the source or content of the work.” Gordon,
909 F.3d at 265.
In determining whether a work is expressive, we analyze
whether the work is “communicating ideas or expressing
points of view.” MCA Records, 296 F.3d at 900 (quoting
L.L. Bean, Inc. v. Drake Publishers, Inc., 811 F.2d 26, 29
(1st Cir. 1987)). A work need not be the “expressive equal
of Anna Karenina or Citizen Kane” to satisfy this
10 VIP PRODUCTS V. JACK DANIEL’S PROPERTIES
requirement, Brown v. Elec. Arts, Inc., 724 F.3d 1235, 1241
(9th Cir. 2013), and is not rendered non-expressive simply
because it is sold commercially, see MCA Records, 296 F.3d
at 906–07.
We recently had “little difficulty” concluding that
greeting cards, which combined the trademarked phrases
“Honey Badger Don’t Care” and “Honey Badger Don’t Give
a S - - -” alongside announcements of events such as
Halloween and a birthday, were “expressive works” entitled
to First Amendment protection. Gordon, 909 F.3d at 261–
63, 268. Even if the cards did not show great “creative
artistry,” they were protected under the First Amendment
because the cards “convey[ed] a humorous message through
the juxtaposition of an event of some significance—a
birthday, Halloween, an election—with the honey badger’s
aggressive assertion of apathy.” Id. at 268–69.
Like the greeting cards in Gordon, the Bad Spaniels dog
toy, although surely not the equivalent of the Mona Lisa, is
an expressive work. See Empire Distribution, 875 F.3d
at 1196 (“We decide this legal question de novo.”). The toy
communicates a “humorous message,” see Gordon, 909
at 268–69, using word play to alter the serious phrase that
appears on a Jack Daniel’s bottle—“Old No. 7 Brand”—
with a silly message—“The Old No. 2.” The effect is “a
simple” message conveyed by “juxtaposing the irreverent
representation of the trademark with the idealized image
created by the mark’s owner.” L.L. Bean, Inc., 811 F.2d at
34 (affording First Amendment protection to a message “that
business and product images need not always be taken too
seriously”). Unlike the book in Dr. Seuss Enterprises, L.P.
v. Penguin Books USA, Inc., 109 F.3d 1394 (9th Cir. 1997),
which made “no effort to create a transformative work with
‘new expression, meaning, or message,’” Bad Spaniels
VIP PRODUCTS V. JACK DANIEL’S PROPERTIES 11
comments humorously on precisely those elements that Jack
Daniels seeks to enforce here. Id. at 1401 (quoting Campbell
v. Acuff-Rose Music, Inc., 510 U.S. 569, 578, 580 (1994)).
The fact that VIP chose to convey this humorous message
through a dog toy is irrelevant. See Hurley v. Irish-Am. Gay,
Lesbian & Bisexual Grp. of Bos., 515 U.S. 557, 569 (1995)
(“[T]he Constitution looks beyond written or spoken words
as mediums of expression.”).
The Fourth Circuit’s decision in Louis Vuitton Malletier
S.A. v. Haute Diggity Dog, LLC, 507 F.3d 252 (4th Cir.
2007), supports our conclusion. That opinion held that dog
toys which “loosely resemble[d]” small Louis Vuitton
handbags were “successful parodies of LVM handbags and
the LVM marks and trade dress” and therefore did not
infringe the LVM trademark. 1 Id. at 258, 260, 263. The
Fourth Circuit reasoned that although “[t]he dog toy is
shaped roughly like a handbag; its name ‘Chewy Vuiton’
sounds like and rhymes with LOUIS VUITTON; its
monogram CV mimics LVM’s LV mark; the repetitious
design clearly imitates the design on the LVM handbag; and
the coloring is similar,” “no one can doubt . . . that the
‘Chewy Vuiton’ dog toy is not the ‘idealized image’ of the
mark created by LVM.” Id. at 260. No different conclusion
is possible here.
Because Bad Spaniels is an expressive work, the district
court erred in finding trademark infringement without first
requiring JDPI to satisfy at least one of the two Rogers
prongs. See Gordon, 909 F.3d at 265; see also E.S.S. Entm’t
1
The Fourth Circuit decision was based on likelihood of confusion,
not the First Amendment, see id. at 259–60, as it had not yet adopted the
Rogers test, see Radiance Found., Inc. v. NAACP, 786 F.3d 316, 329 (4th
Cir. 2015) (later applying it).
12 VIP PRODUCTS V. JACK DANIEL’S PROPERTIES
2000, 547 F.3d at 1101 (stating that “the First Amendment
defense applies equally to . . . state law claims as to [a]
Lanham Act claim”). We therefore vacate the district court’s
finding of infringement and remand for a determination by
that court in the first instance of whether JDPI can satisfy a
prong of the Rogers test. 2
D. Trademark Dilution by Tarnishment
When the use of a mark is “noncommercial,” there can
be no dilution by tarnishment. 15 U.S.C. § 1125(c)(3)(C);
see A.R.S. § 44-1448.01(C)(2). Speech is noncommercial
“if it does more than propose a commercial transaction,”
Nissan Motor Co. v. Nissan Comput. Corp., 378 F.3d 1002,
1017 (9th Cir. 2004) (quoting MCA Records, 296 F.3d
at 906), and contains some “protected expression,” MCA
Records, 296 F.3d at 906. Thus, use of a mark may be
“noncommercial” even if used to “sell” a product. See
Nissan Motor Co., 378 F.3d at 1017; MCA Records,
296 F.3d at 906.
Although VIP used JDPI’s trade dress and bottle design
to sell Bad Spaniels, they were also used to convey a
humorous message. That message, as set forth in Part II.C
above, is protected by the First Amendment. VIP therefore
was entitled to judgment in its favor on the federal and state
law dilution claims. See Nissan Motor Co., 378 F.3d
at 1017; MCA Records, 296 F.3d at 906.
2
If the plaintiff satisfies one of the Rogers elements, “it still must
prove that its trademark has been infringed by showing that the
defendant’s use of the mark is likely to cause confusion.” See Gordon,
909 F.3d at 265; see also Louis Vuitton Malletier, 507 F.3d at 260 (noting
that the application of likelihood-of-confusion factors “depend[s] to a
great extent on whether its products and marks are successful parodies”).
VIP PRODUCTS V. JACK DANIEL’S PROPERTIES 13
III
We affirm the district court’s summary judgment in
favor of JDPI on the issues of aesthetic functionality and
distinctiveness, affirm the judgment as to the validity of
JDPI’s registered mark, reverse the judgment on the issue
of dilution, vacate the judgment after trial on the issue of
infringement, and remand for further proceedings. The
permanent injunction is vacated. 3
AFFIRMED IN PART, REVERSED IN PART,
VACATED IN PART, AND REMANDED. Each party
to bear its own costs.
3
Because we hold that VIP was entitled to judgment in its favor on
the trademark dilution claims and that the judgment in favor of VIP on
the infringement claims must be vacated, we do not address VIP’s
alternative challenges to these claims. And, because we vacate the
permanent injunction, we do not address VIP’s argument that the district
court erred in not limiting the scope of the permanent injunction.