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 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.
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