Speakers: John Walsh, Felicia Ellsworth and Thomas Saunders
John Walsh: Welcome to In the Public Interest, a podcast from WilmerHale. I'm John Walsh.
Felicia Ellsworth: And I'm Felicia Ellsworth. John and I are partners at WilmerHale, an international law firm that works at the intersection of government, technology and business.
Walsh: Today's episode is the latest installment of our new Supreme Court mini-series, where we dive into the most hotly contested decisions coming out of the court this term and discuss the implications of several of the court’s rulings going forward.
Ellsworth: For our first episode, we'll be discussing the Supreme Court's recent decision in Jack Daniel's Properties Inc. v. VIP Products LLC, which involves trademark law and freedom of expression. Joining me to discuss this case is Tom Saunders, a partner in WilmerHale’s Washington DC office, who specializes in appellate litigation and intellectual property law. Thank you so much, Tom, for joining us on this episode of our Supreme Court mini-series.
Thomas Saunders: Thanks, it's nice to be here.
Ellsworth: This is a pretty important case and has large implications for trademark law and for freedom of expression, and we'll get into all of that. But first, I was hoping you could help us out by starting with some basic facts and a quick overview of what happened in this lawsuit.
Saunders: Sure. As the opening line of the Supreme Court's opinion explains, this case is about dog toys and whiskey, two items seldom appearing in the same sentence. The case began when VIP products made a chewable dog toy designed to look like a bottle of Jack Daniel's whiskey, but the toy changed the name Jack Daniel's to Bad Spaniels and inserted a bunch of jokes about dog excrement, and they replaced the old #7 brand with the old number 2 on your Tennessee carpet. They replaced the alcohol content with a fake 43% poop by volume, sort of full of a lot of dog jokes and scatological humor. So, after Jack Daniel's told VIP to stop it, you're infringing our trademarks, VIP filed a lawsuit seeking a declaration that it didn't infringe. And that strategy backfired because when the District Court took a look at this and held a trial, it determined, no, this is trademark infringement. And one of the important pieces of evidence there was, there was a consumer survey that showed that about a third of potential customers were likely to be confused into thinking that this was actually associated with Jack Daniel's. Where the legal issues came in for the Supreme Court is on appeal. The Court of Appeals for the 9th Circuit said that the District Court hadn't adequately protected VIP's First Amendment interests. And it said, before you get to this issue of consumer confusion, you have to apply a test designed to protect free speech. It's called the Rogers test. It had been created by another court in a case about a movie directed by Federico Fellini called Ginger and Fred. Ginger Rogers had sued over that movie, saying that it was improperly using her name and associated with her. And, in that context, the court had created this test that said, well, before we get to any of these issues of trademark, when you have an artistic work like this, something like a movie title, a suit can't go forward unless the use of that name or trademark has no artistic relevance, or it seems designed to mislead. And under that test, which is very protective of First Amendment interests, the suit against the VIP products couldn't go forward. There was also another claim for trademark dilution, which is when you have a really famous mark, there are limits on the way people can use it, even without consumer confusion. And there is an exception in the Statute there for non-commercial use. And so, the Court of Appeals said, because this was parody, it was non-commercial use even though there was a product being sold.
Ellsworth: So, obviously a pretty interesting set of facts for the Supreme Court to consider. As you noted, an unusual combination, but, of course, some really important legal issues as well. So, what was essentially the core legal issue or issues that the Supreme Court ultimately addressed in their opinion?
Saunders: The primary question was whether the humorous use of somebody else's mark as an identifier like this on the product is subject to traditional likelihood of confusion analysis, or whether there's some higher standard that the trademark owner needs to meet in order to satisfy First Amendment concerns. And then there was a secondary question in the case about the non-commercial use holding, and was the parody here really a non-commercial use.
Ellsworth: Got it. So, with that context and factual backdrop in mind, let's dive into the court’s ultimate decision. What did the court decide and what was its reasoning?
Saunders: In a unanimous opinion, written by Justice Kagan, the Court was really trying to chart a middle course between two extremes. It criticized the parties for addressing the issues, in what it called the broadest possible way, with Jack Daniel's attacking this Rogers First Amendment test across the board and VIP invoking the First Amendment in a way that would really make it difficult to enforce any trademark. And the Supreme Court says, we don't need to decide whether the Rogers test or some other First Amendment standard properly applies in other cases; it's enough for us to look at the product here and say when you're using a mark like this as the designation of source on your goods — I mean, this is the name on the product being sold — then there's no heightened standard under the First Amendment. And importantly, the court said that's true even if there is some other expression that comes along with it. So, it recognizes there's humor here, there's parody, there's something being added, but basically made the conclusion that the traditional likelihood of confusion test is the right balance in that area, and that the public interest in not being misled as to who's the source of the product, outweighs the interest of the person doing the parody in this expression. Importantly, the court said this doesn't mean that parody is irrelevant and explained, done right, a good parody is going to borrow some from the original, but in a way that's not likely to cause confusion. The court just said that's already accommodated by the confusion analysis, and we don't need some extra First Amendment overlay on top of that when we're talking about the identification of who's making this product.
Ellsworth: And what about that second ancillary issue about trademark dilution? Did the court address it, and how did it handle it?
Saunders: It did. It was sort of an afterthought at the end of the session because I think the court saw it as a pretty easy issue. It said, we don't need to decide the outer boundaries of what constitutes non-commercial use. This doesn't qualify. I think the court was particularly concerned because the trademark dilution statute already has an exception in it for parody as a form of fair use. And Congress, when it made that exception, drew a careful line and says, well, but that doesn't apply if you're using the trademark as a source identifier. And so, the Supreme Court was really concerned if you had a non-commercial use exception that swept in all parody, you really would erase the line that Congress had drawn, and so they just extended that line. They said that line is also applying to parody, really across the board.
Ellsworth: So, Tom, you noted that the decision was a unanimous one by Justice Kagan, which is increasingly rare these days. So, it was joined by all 9 Justices, but did anybody write separately and share any additional thoughts?
Saunders: They did, and I think they got to a unanimous opinion by taking this middle course, and saying we're not deciding some of the bigger issues. We're going to decide them in the context of this case. We did have two separate opinions, and they were really pointing in different directions. So, Justice Sotomayor, joined by Justice Alito, which is not a pairing we typically see, were urging the lower courts to be really careful with survey results in cases involving parody. The point they wanted to make was that survey answers can reflect the mistaken belief among the public that all parody somehow requires permission of the brand owner. In other words, the consumer, in saying this is attributable to Jack Daniel's, wouldn't actually be confused about the source of the product, but really is confused about the law and what would be required here and so assumed, oh well, Jack Daniel's must have approved this. Pointing in the opposite direction, we had another concurrence by Justice Gorsuch, joined by Justice Thomas and Justice Barrett, and they urged caution about applying the Rogers test, in general. The Rogers test had been created by the lower courts. It hadn't been endorsed by the Supreme Court, so they had questions as to where it came from, and is it an interpretation of the First Amendment. Is it an interpretation of the statute? Are judges just making it up? They sort of questioned whether Rogers was right in all of its particulars, so I think they just wanted to put in that note of caution to try to influence how lower courts would think of that test going forward.
Ellsworth: So, backing up a little bit, I've listened to portions of the oral argument in this case, but I understood it was a pretty interesting one, and I think you may have been there. So, can you tell us, Tom, a little bit about what the oral argument was like in this case earlier this year.
Saunders: Yes. Now I was in the courtroom and it was a pretty wild argument. Counsel for Jack Daniel's mentioned dog poop in her opening sentence, and you could tell from the way that the justices were looking at each other that they probably had bets about how scatological the argument was going to be. There was also a light moment — Justice Alito was asking a question about a product purported to contain dog urine, another sort of parody product example. I think the litigant thought this was an actual question about someone selling dog urine and started talking about that that would be prohibited under state law, you know, all the consumer protections that would come into play, at which point Justice Alito had to intervene and make a clarification. I thought I would never hear from the Supreme Court and say no, no, my question isn't about someone actually selling urine, and that's just a flavor of what was a pretty crazy argument. I will say that the argument itself showed more division on the underlying First Amendment question than we saw in the final opinion, but that you did see a little bit in the concurrences and, in particular, you could tell that Justice Sotomayor was really not happy about an answer she got to a hypothetical she posed, where the answer implied that a political party could sue somebody for making a T-shirt that had a drunken donkey or a drunken elephant. She was concerned, is this ruling going to become a way for people to just suppress criticism, suppress speech that they don't like. And Justice Alito had telegraphed some of the concerns you saw in that concurrence with Justice Sotomayor about is it too easy to prove confusion and then, so again, are we not being protective enough of free speech?
Ellsworth: So, building off some of those concerns, at least that were expressed by the justices during oral argument, how do you see the ultimate opinion issued by the Court affecting some of these issues about freedom of speech and artistic expression going forward?
Saunders: Yeah, I think even though the opinion ruled for the trademark owner, I think it leaves a lot of scope for expression. It doesn't touch parodies that are a bit more removed from the product being parodied. For example, you can still have a skit on Saturday Night Live that's making fun of a product or doing a fake product, you could have an art exhibit that stacks 1000 soda bottles as commentary on consumer culture. Where it creates more doubts and risks is for parody products, things that are actually physical products that have on them the parody itself in a way that could be confused as the designation of origin. One thing I'm going to be looking at, in particular, and I think it's going to emerge as a battle ground is what do you do with T-shirts? Are they just another consumer product where the logo is telling you the source as is true of a lot of T-shirts that get sold or are they more like walking canvases, on which the logo is the expression of the message. And so, if you're going to enforce the trademark against that, it's a little harder to draw lines. I also think we're going to see some courts struggle with certain forms of advertising where you're not selling the product, but where it may be unclear from the parody — are you making fun of somebody's other product? Are you associating your own product with the trademark? So, I think, there's nothing in this opinion that should make people concerned about core parody and there's a lot in this opinion, to reassure trademark owners. But, as always, they're always going to be five more questions for every one question the Supreme Court answers, and it's going to take a while for lower courts to work through these.
Ellsworth: That's certainly true for pretty much anything the Supreme Court says these days. Tom, can you let me know a little bit about WilmerHale’s involvement in this case.
Saunders: We filed a friend of the court brief on behalf of Campari. And, in that brief, we were trying to give the courts a broader historical perspective on the peaceful coexistence between the First Amendment and trademark. We really traced the history of trademark law, we talked about George Washington's own trademarks, and showed that a lot of the concerns that had been raised here could be built into the likelihood of confusion tests. So, we were really supporting the path that the court ultimately took. It was a fun case to work on, and yes, it was a very interesting brief to write.
Ellsworth: Well, a really interesting case legally and, of course, a pretty fun one factually. So, thanks so much for joining us today, Tom, to talk a little bit about the case and the Court's opinion, and we appreciate your time on this episode of In the Public Interest.
Saunders: It was my pleasure. Thanks so much for having me.