On June 8, the U.S. Supreme Court issued its opinion in the case of Jack Daniel’s Properties v. VIP Products, a litigation of interest to the Brewers Association (BA) and the alcohol beverage industry.

The Supreme Court’s unanimous decision in favor of Jack Daniel’s Properties vindicated brand owners’ trademark rights and reflected the positions taken by the BA and other industry trade groups in a “friend of the court” (amicus) brief urging the Court to reverse the Ninth Circuit Court of Appeals’ prior decision.

The central issue in Jack Daniel’s Properties involved whether a trademark owner could halt the infringing use of its trademarks by another company (here, VIP Products) where the infringing product conveyed a “humorous” message. VIP Products manufactures and sells dog toys that lampoon famous alcohol beverage brands (in this case, “Bad Spaniels”) using humor often centered around dog poop (“The Old No. 2 On Your Tennessee Carpet”). A federal district court found that VIP Products’ Bad Spaniels toy was likely to confuse consumers into believing that Jack Daniel’s had produced or authorized the dog toy, and that the toy (particularly its repeated use of potty humor) could harm Jack Daniel’s reputation.

The Ninth Circuit Court of Appeals reversed, holding that because VIP Products’ use of Jack Daniel’s trademarks were “humorous,” the dog toy accordingly was an “expressive” work. As such, the toy was entitled to First Amendment protection and the case should be examined under a test (the “Rogers test”) that made it much harder for Jack Daniel’s to prevail. The Ninth Circuit also held that VIP Products’ humorous use of Jack Daniel’s trademarks was “non-commercial” even though it was used to sell a product. Applying the Ninth Circuit’s reasoning on remand, the district court ruled for VIP Products, and Jack Daniel’s appealed the matter back up through the Ninth Circuit to the Supreme Court.

The Supreme Court’s unanimous opinion, written by Justice Kagan, emphatically rejects both aspects of the Ninth Circuit’s reasoning. The opinion begins by stressing the core purpose of trademark law: to identify the source of products to facilitate consumer choice and protect producer goodwill. It then turns to the question of whether VIP Products’ dog toys deserve the extra protection given to “expressive” uses of a trademark as articulated in a Court of Appeals opinion called Rogers (the plaintiff was Ginger Rogers and she objected to the use of her name in a Federico Fellini film about two fictional Italian dancers).

While careful not to endorse or reject the often-used but never Supreme Court-sanctioned Rogers test, the Jack Daniel’s Properties opinion holds that any protection for expressive works does not apply where the alleged trademark infringer, like VIP Products, uses the trademark as its own source of identification for goods. In other words, where an alleged infringer uses a trademark as a trademark, it does not get the benefit of First Amendment protection that a filmmaker or songwriter referencing a famous trademark might.

The Supreme Court took issue with the Ninth Circuit’s conclusion that, because the Bad Spaniel’s dog toy conveyed “a humorous message,” it deserved First Amendment protection as an expressive work. Pointing out that giving infringing goods automatic protection if they are humorous would quickly become the primary realm of trademark law, encompassing an enormous universe of infringing trademark uses. Quoting a federal district court in a similar case, the opinion states:

Whatever First Amendment rights you may have in calling the brew you make in your bathtub “Pepsi” are outweighed by the buyer’s interest in not being fooled into buying it.

The Supreme Court next took on the Ninth Circuit’s conclusion that VIP Products’ use of the Jack Daniel’s trademark, because it was humorous, qualified the Bad Spaniels dog toy as “noncommercial use” subject to the “fair use” exception to federal trademark statute. The Court explained that the fair use exception expressly does not apply where the alleged trademark infringer uses the trademark as a source identifier for its own goods. As VIP Products claimed trademark rights over the Bad Spaniels toy and used that trademark, among others, to market its products, it was not entitled to take advantage of the fair use exception.

While the opinion was unanimous, five justices joined in two short concurring opinions, and both concurrences stressed that they agreed with the majority opinion written by Justice Kagan. Justice Sotomayor, joined by Justice Alito, wrote briefly about the dangers of over-relying on survey evidence of the type relied upon by the district court in the Jack Daniel’s Properties case. Justice Gorsuch, joined by Justices Thomas and Barrett, wrote separately to highlight some unanswered questions about the Rogers test applied by the Ninth Circuit.

Bottom line: The Brewers Association is pleased with the Jack Daniel’s Properties v. VIP Products opinion, as it preserves the protection brewers enjoy in the trademarks they work so hard to build and maintain. The decision also empowers alcohol beverage brand owners to enforce their trademarks in cases where an infringing use would be particularly damaging, such as associating a brand of beer with children’s toys or drinking games.