USA – TEXAS Trends and Developments Contributed by: John Flaim and Dyan House, Baker McKenzie
trade marks. The Court’s judgment resulted in a permanent injunction that prevented VIP Prod - ucts from “sourcing, manufacturing, advertis - ing, promoting, displaying, shipping, importing, offering for sale, selling or distributing” its Bad Spaniels dog toy. II) Ninth Circuit and First Remand to District Court VIP Products appealed to the Ninth Circuit who revered the lower court’s ruling as to dilution and vacated the judgment as to trade mark infringe - ment. The Ninth Circuit, in particular, held that VIP Products’ Bad Spaniels mark was protect - ed under the First Amendment as the mark was expressive in nature. The case was remanded to the Arizona District Court who then applied the two-prong test from Rogers v Grimaldi, the seminal case that balanc - es trade mark rights against First Amendment concerns. Under the Rogers test, a complainant must show that the challenged use of the mark (i) “has no artistic relevance to the underlying work”; or (ii) that it “explicitly misleads as to the source or the content of the work.” The District Court held that Jack Daniel’s did not satisfy either of the prongs of the Rogers test. III) Supreme Court Jack Daniel’s appealed to the US Supreme Court who granted certiorari as to the Ninth Circuit’s rulings on both trade mark infringement and dilu - tion. On 8 June 2023, the US Supreme Court issued its opinion in which it vacated the Ninth Circuit’s decision and remanded the case. The Supreme Court held that Rogers did not apply when the mark at issue was being used by the infringing party as a trade mark.
IV) Outcome and discussion of additional issues On remand from the Ninth Circuit, the Arizona District Court issued an Amended Findings of Fact, Conclusions of Law, and Order on 23 Janu - ary 2025, in which it held that VIP Products’ Bad Spaniels mark did not infringe, but does tarnish, the Jack Daniel’s marks. The Court concluded that a permanent injunction is appropriate in this case. The Court also addressed VIP Products’ First Amendment defence in the most recent rul - ing. In short, Jack Daniel’s argued, and the Court agreed, that VIP Products waived its First Amendment challenge because VIP Products did not raise the challenge in the pleadings. V) Trademark Dilution Revision Act (TDRA) The TDRA defines dilution by tarnishment as “associating arising from the similarity between a mark or trade name and a famous mark that harms the reputation of the famous mark” (15 USC Section 1125(c)(2)(C)). Stated another way, dilution is the “whittling away of the value of a trade mark when it’s used to identify different products” (4 J. Thomas McCarthy, McCarthy on Trademarks and Unfair Competition Sec - tion 24.67, at 24–120; Section 24.70, at 24–122 (2001)). There are three factors to be considered in a dilution by tarnishment claim: • fame; • similarity of the marks; and • reputational harm. i) Fame As US trade mark lawyers are well aware, demonstrating that a mark is famous is a dif - ficult task. With a dilution by tarnishment claim,
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