Woof: Jack Daniels Takes Fight Over Doggy Chew Toy To The Supreme Court
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Back in April, we wrote about a trademark dispute between Jack Daniels and VIP Products LLC. At issue was a doggy chew toy made as clear parody of the Jack Daniels bottle, with the branding changed to "Bad Spaniels", along with other parody references. While Jack Daniels had initially won in court when VIP sought declaratory judgement that its use was non-infringing, upon appeal to the U.S. Court of Appeals for the 9th District, that decision was reversed. Key to that ruling was the court's assessment that, due to the parody nature of the product, it was an "expressive work", and the lower court ought to therefore have applied the Rogers test, and vacated an injunction the lower court had applied.Accordingly, the court held that, as a threshold matter, the Rogers test needed to be applied. Under that test, a trademark infringement plaintiff must show that the defendant’s use of the mark either (1) is “not artistically relevant to the underlying work” or (2) “explicitly misleads consumers as to the source or content of the work.” Id. at 9 (quoting Gordon, 909 F.3d at 265). The Ninth Circuit vacated the district court’s finding of infringement and remanded for a determination, in the first instance, of whether Jack Daniel’s can satisfy either element of the Rogers test. But instead of proceeding along those lines, it seems that Jack Daniels instead wants to have a fight at the U.S. Supreme Court over whether a parody dog chew toy truly is expressive. The appeal takes particular umbrage at the lower court's sense of humor.Because the court of appeals thought [VIP Products’] notorious copying was funny, it held that the company has a First Amendment interest in confusing consumers into believing that Jack Daniel’s sponsors a dog toy spotlighting poop. The more serious aspects of the filing focus on just where and how Fair Use can be applied in trademark law.The Lanham Act provides that certain categories of use “shall not be actionable” as dilution. One excluded category is “[a]ny fair use . . . other than as a designation of source for the person’s own goods or services.” 15 U.S.C. § 1125(c)(3)(A) (emphasis added). The Act identifies parody as a permitted fair use, but it excludes the parodist from liability only so long as the parodist does not use a trademark as its own designation of source. Id. § 1125(c)(3)(A)(ii). The Ninth Circuit did not apply that exclusion here, presumably because it had no basis to reverse the district court’s conclusion that VIP Products used Jack Daniel’s trademarks as a designation of source. Which is one hell of a presumption. What the court actually did, instead, is recognize the product as parody, deem it expressive because of that, and then indicated that the use of any trade dress or marks therefore didn't act as a source identifier. In other words, the lower court indicated that this ought to be a fight over customer confusion rather than how closely the parody's branding compared with the subject of that parody.Which is exactly the correct arena for this to be fought in. Because of the clear parody nature of the product, the proper question is will the public be confused into thinking it was buying a product that has any actual association with Jack Daniels. That Jack Daniels doesn't want to have this fight on those grounds should tell you everything you need know.
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posted at: 12:00am on 25-Sep-2020
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If Patents Are So Important To Innovation, Why Do Innovative Companies Keep Opening Up Their Patents Rather Than Enforcing Them?
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To hear many politicians (and, tragically, many academics) tell the story, patents and patent policy are keys to innovation. Indeed, many studies trying to measure innovation use the number of patents as a proxy. For years, we've argued that there is little evidence that patents are in any way correlated with innovation. Indeed, in practice, we often see patents get in the way of innovation, rather than being a sign of innovation. If anything, an influx of patents seems to indicate a decline in innovation, because as the saying goes, smart companies innovate, while failed companies litigate. Litigating patents tends to happen when a more established company no longer is able to compete by innovation, and has to bring in the courts to block and stop more nimble competitors.Indeed, over and over again we seem to see the most innovative companies eschewing the anti-competitive powers that patents give them. I was reminded of this recently with the announcement that payments company Square had agreed to put all of its crypto patents into a new non-profit called the Crypto Open Patent Alliance to help fight off the unfortunate number of crypto patent trolls that are showing up.Of course, we see this throughout the companies generally considered to be the most innovative. A decade ago, Twitter came up with a very clever Innovator's Patent Agreement, which effectively would block patent trolls from ever being able to use Twitter's patents, should they somehow fall into trollish hands. A bunch of other top internet companies including Google, Dropbox, Asana, and Newegg launched the License on Transfer network, as a basic poison pill to, again, stop patent trolls.And, most famously, Elon Musk flat out gave away Tesla's patents and encouraged anyone else to use them to compete with Tesla, license-free.If patents really were so vital to innovation, why would all of these innovative companies be so quick to give them up? And why is it so incredibly rare that any of them assert patents against competitors? Instead, so much of the patent litigation we see is against those innovative companies coming from a variety of patent trolls (frequently lawyers who never innovated at all) or also ran companies which may have been innovative in the past but have long since seen their innovative days in the rearview mirror.It would be nice if policymakers, the media, and academics finally started recognizing the idea that patents are not just a bad proxy for actual innovation, but often antithetical to innovation, and we can see all the evidence we need for that in the fact that the most innovative companies are "devaluing" in their own patents to improve the ecosystem, rather than enforce those patents.
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posted at: 12:00am on 25-Sep-2020
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