Ninth Circuit Rules that Dilution Is Mark by Mark, Not by the Bottle
What You Need To Know
- Courts must assess fame mark by mark for trademark dilution, since fame in a house mark does not necessarily extend to other marks in a brand portfolio.
- Parody is not a complete defense to dilution by tarnishment, but courts may consider whether an obvious parody reduces the likelihood of reputational harm.
- Courts are looking for specific, product-focused consumer evidence on harm; not general consumer psychology testimony.
As part of the ongoing litigation between Jack Daniel’s and VIP Products over VIP’s “Bad Spaniels” dog toy, the U.S. Court of Appeals for the Ninth Circuit recently vacated a permanent injunction against the Bad Spaniels toy, holding that Jack Daniel’s failed to prove that the toy’s parody of the iconic whiskey brand was dilution by tarnishment. The decision offers insight into how courts may handle trademark dilution claims moving forward.
Sips Versus Squeaks
The dispute between Jack Daniel’s and VIP Products began in 2014, when VIP introduced Bad Spaniels as part of its line of parody dog toys modeled on beer, wine, and liquor bottles. The squeaky Bad Spaniels toy borrowed the shape and look of the iconic Jack Daniel’s bottle but replaced “Jack Daniel’s” with “Bad Spaniels”; swapped “Old No. 7” for “Old No. 2”; and used “43% POO BY VOL.” and “100% SMELLY” in place of the alcohol-by-volume language.
In 2023, the Supreme Court ruled on the parties’ dispute in favor of Jack Daniel’s, holding that the Rogers test does not apply when an infringer uses a mark as a source identifier for its own goods. Importantly, the Lanham Act’s noncommercial-use exclusion does not shield parody when the use is similarly source-identifying. This opened the door for Jack Daniel’s to continue to pursue claims against VIP Products’ claimed parody. On remand, the district court found no likelihood of confusion but held VIP liable for dilution by tarnishment. The court entered a permanent injunction, which VIP appealed to the Ninth Circuit.
Ninth Circuit Lets Bad Spaniels Off the Leash
The Ninth Circuit vacated the injunction and held that Jack Daniel’s had not shown dilution by tarnishment. The court first narrowed the relevant marks: Jack Daniel’s proved fame for the “Jack Daniel’s” mark and the whiskey’s trade dress (think: bottle shape), but not for “Old No. 7.” Federal dilution law protects only famous marks, so the court held that Jack Daniel’s could not base its tarnishment claim on “Old No. 7” or on VIP’s parody “Old No. 2.”
The court then addressed what role parody plays in the tarnishment analysis. Joining the Fourth and Second Circuits, the Ninth Circuit held that parody is not an automatic defense to dilution where the use is source-identifying, but courts may still consider it when evaluating likely tarnishment. Successful parodies send two simultaneous messages: They call the original to mind while also signaling that they are not the original and are making a joke. The court found that the dual message matters because consumers are more likely to understand an obvious parody as a joke than as something reputationally harmful to the famous mark.
Jack Daniel’s expert testimony did not bridge that gap. The expert testified that associating food or beverages with defecation can trigger disgust, but he did not have any evidence that Bad Spaniels triggered disgust associated with Jack Daniel’s, and he did not account for the parodic context that would reduce the likelihood of that harmful association. The Ninth Circuit held that this generic consumer psychology testimony was too speculative to prove that Bad Spaniels was likely to harm the reputation of Jack Daniel’s famous marks.
Key Takeaways for Brand Owners and Parodists
For brand owners, this decision underscores the importance of evaluating dilution claims mark by mark. Evidence that a flagship or house mark is famous will not necessarily establish that related sub-brands, slogans, or label elements are also famous among the general consuming public. There was no penumbra of fame.
For tarnishment plaintiffs, the decision confirms that courts may consider the parodic character of the accused use even when parody does not provide a categorical defense. Plaintiffs should be prepared to explain why the specific parody is likely to harm the reputation of a famous mark despite its comedic framing, while defendants should develop evidence showing how consumers encounter and understand the accused use as a parody. The Ninth Circuit made clear that dilution by blurring was not relevant to this appeal (only dilution by tarnishment), so there are still open questions as to how this may apply to future blurring cases.
The evidentiary lesson is equally important: Generic testimony about negative associations may not be enough. Expert analysis and consumer evidence should address the accused product itself and the real-world context in which consumers encounter it, including whether the product’s humor or parody makes reputational harm less likely. The practical lesson is to build the record around the particular mark, the particular parody, and the particular consumer context.