Infringement lessons from the Jack Daniel’s case

You don’t need to be a whiskey drinker to be acquainted with the ‘Jack Daniel’s’ name. As one of the most well-known liquor brands globally, it is unsurprising that the name would be used as part of spoof products.

In July 2023, the United States Supreme Court unanimously ruled that VIP Products LLC’s (VIP’s) pun-laden ‘Bad Spaniels’ chew toy resembling the Jack Daniel’s (JD) black-label whiskey bottle was in violation of US trade mark law. The decision significantly narrowed the application of two fundamental defences concerning trade mark infringement and dilution in the United States and is likely to immediately impact pending trade mark cases relying upon the Rogers test. In this article, we will explore the guiding principles of the Rogers test and how Australian trade mark legislation addresses similar issues in relation to Australian trade mark disputes. We will also consider how Australian law would have been applied under similar circumstances.

The Rogers test

Freedom of speech in the US is most commonly protected by the notorious Rogers test.

The test was established in 1989 when Ginger Rogers brought a claim against the producers of the film ‘Ginger and Frank’ alleging it created a false impression of involvement due to the similarities between herself and the protagonist. She argued before the Supreme Court that the film was a commercial product and therefore breached the Lanham Act, the federal statute governing trade mark law in the US. Under the Lanham Act, acts of trade mark infringement, trade mark dilution and false advertising are prohibited.

In response, the defendants argued that the film was not a commercial product, but rather a work of artistic expression and was protected by the First Amendment. It was further argued that a mere similarity of name did not demonstrate the film intended to portray or resemble Miss Rogers.

The Supreme Court ruled that the film was a work of artistic expression and not a commercial product, meaning it was in fact not subject to the Lanham Act. As a result, the Rogers test has continued to be applied to subsequent cases that query whether use of a third-party mark in an expressive work violates the Lanham Act.

What happened?

VIP invoked the Rogers defence claiming that the Bad Spaniels chew toy qualifies as an ‘expressive work’ protected by the US Constitution’s First Amendment, and thereby is entitled to free speech. The Arizona-based company further claimed that use of the JD marks in a satirical manner raised the express exclusion for dilution liability for ‘non-commercial use’ of a mark under the Lanham Act.

In response, JD argued that the ‘non-commercial’ exception is not applicable given VIP used the JD marks with the intention of driving sales, and the toy is likely to confuse consumers into believing JD endorsed VIP’s products and/or is affiliated with the company.

The Supreme Court held that:

• the Bad Spaniels toy used the JD trade marks as trade marks for the dog toy company and therefore the defence pursuant to Rogers is not applicable; and
• the satirical use of the mark is not considered to be non-commercial merely because it mimics another’s product, meaning the express limit on the fair use exclusion for parody under the Lanham Act is not valid.

How is this relevant to Australia?

Though the case was heard in the United States, there are corresponding implications for Australian trade mark disputes. The JD case provides a contrast to how Australian trade mark legislation addresses similar issues relating to parody, distinctive trade dress, and consumer protection. We consider these issues in further detail below.

Parody and satire

The case emphasises the crucial impact parody can have on the perception of consumers. Per the Copyright Act 1968 (Cth) (Copyright Act), copyright is taken to subsist in an original literary, dramatic, musical, or artistic work that is either unpublished or published in Australia.¹ If such material is used without the consent of the author and/or without a licence, the copyright in the original work is infringed and therefore a breach of copyright has occurred.² Section 41A of the Copyright Act specifies that fair dealing with copyright material does not constitute infringement if the purpose is proven to be for parody or satire.

Since the Copyright Act does not provide an express definition for ‘parody’ or ‘satire’, commentary of the Australian courts is often applied. Previous judgements suggest a parody is to be interpreted as ‘a humorous or satirical imitation of a serious piece of literature or writing’. Given such a subjective interpretation, whether material is deemed to be a form of parody is determined on a case-by-case basis. In addition, Australian courts have accepted a parody must involve elements of imitation and demonstrate a sufficient degree of separation from the original work, ultimately resulting in the creation of a new work. In simpler terms, a parody makes comment on the original work and does not rely on the entirety of the original work.

Consumer protection

As Justice Kagan expressed in her decision of the JD case, ‘a parody must “conjure up” enough original to make the object of its critical wit recognisable‘ and must implement blatant contrasts to ensure confusion is unlikely to occur amongst consumers.

An essential consideration in both US and Australian trade mark law is the likelihood of consumer confusion. Although Australian legislation is not influenced by the right to free speech, consumers are offered protection from misleading and deceptive conduct under aspects of trade mark and consumer law.

The Australian Consumer Law (ACL) establishes the general rules of misleading and deceptive conduct in relation to the ‘standard, quality, value, grade, composition, style or model’ of goods and services. Sections 18 and 29 prohibit persons from both engaging in conduct that is misleading or deceptive or likely to mislead or deceive and from making false or misleading representations regarding goods and/or services respectively. Notwithstanding the obvious difference between an alcoholic beverage and a dog toy, there is scope in arguing that VIP relied upon the JD Marks in such a way to mislead consumers about the endorsement of its products.

In addition, the specific creative elements that make the JD trade dress, such as the packaging designs and labels, could potentially be protected by copyright. JD could enforce its copyright to prevent the reproduction or distribution of products deemed to be a ‘replica’ of its original works. Copyright therefore plays a relevant role in reducing and limiting the risk of consumer confusion in the marketplace.

The likelihood of confusion between ‘lookalike’ products was recently considered by the High Court of Justice of England and Wales in a case between Aldi v Thatchers. Thatchers claimed that Aldi’s Taurus lemonade brand amounted to trade mark infringement and passing off when compared to its Cloudy Lemon Cider due to the substantial similarities in packaging, design, and taste.

However, the Court ruled that there was no trade mark infringement or passing off by Aldi on the basis of a ‘low degree of similarity’ between the two products for multiple reasons. The Court reached such conclusion through an assessment of the relevant context for an average consumer when purchasing the Aldi product. By way of example, the Court considered the use of whole lemons and green leaves on both products to be a point of visual similarity and conceptual identity, but the style and arrangement of the lemons decreased the importance of the similarity of use of lemons and leaves. An important factor in the case is that consumers will only look at such a product on a shelf for a few seconds prior to deciding which to buy. Visual cues are therefore the primary point of focus and are to be considered when assessing the degree of similarity. The High Court also found that due to substantial use of its trade mark nationally, Thatchers had enhanced distinctiveness in its brand. Irrespective of the final outcome, the case emphasises the importance of protecting packaging of products through trade mark protection and if possible, registered design protection. In addition, the case demonstrates use and protection of distinctive elements are crucial when developing a brand to obtain a broader scope of protection.

Trade mark infringement

The Copyright Amendment Act 2006 (Cth) introduced parody as a ‘fair dealing’ exception to protect and encourage creative expression. However, in cases of trade mark infringement, the TMA does not provide for parody as an exception.

Trade mark infringement arises in Australia where a mark is used that is deemed to be either substantially identical or deceptively similar to a registered mark. Per the TMA, the mark must be in relation to:

• the goods or services which the earlier mark is registered;³ or
• goods of the same description as the registered goods, or in relation to services closely related to the registered goods unless it is established that use of the mark is unlikely to deceive or cause confusion.⁴

There are other factors that can be considered to determine whether infringement of a registered mark has occurred, including:

• the reputation of the mark in Australia;
• whether the earlier registered mark has such a reputation that the later mark is likely to be perceived by consumers to be affiliated with the owner of the registered mark and the unrelated goods and/or services of the mark; and
• whether the interests of the registered owner are likely to be adversely affected.⁵

In the recent decision of Self Care IP Holdings Pty Ltd & Anor v Allergan Australia Pty Ltd & Anor [2023], HCA 8, the High Court unanimously held that the trade mark ‘PROTOX’ was not deceptively similar to the trade mark ‘BOTOX’ because ‘persons of ordinary intelligence and memory were not likely to confuse PROTOX and BOTOX‘. We have discussed this decision in more detail in our previous article available here. The Court also made it clear that in an infringement proceeding under section 120(1) the determination of deceptive similarity is to be resolved without any consideration of the registered owner’s reputation. Evidently, the Court held that there was no real or tangible risk of consumer confusion or deception as both marks were sufficiently different. If a similar approach was taken to address the issues presented in the JD case, the reputation of JD is unlikely to have been considered at a high degree.

The JD case reiterates the importance of registering key distinctive elements of a product as trade marks, with the unique bottle shape (Australian trade mark registration 880284) and label design (Australian trade mark registration 707140) of the JD marks playing a crucial factor in establishing and protecting the brand. These elements assist consumers in identifying and differentiating JD products in the marketplace and over time, this has led to consumers associating these specific elements with the JD brand. It is worth noting that the case also emphasises the importance of securing protection for various elements of branding (ie trade dress) and not just the name. As demonstrated in earlier cases, such as Kraft Food Group Brands LLC v Bega Cheese Limited (No 8) [2019] FCA 593, registering all distinctive aspects of product labelling and packaging is necessary to protect and maintain the goodwill of a business.

Likely outcome in Australia

Not only does JD have a range of Australian trade mark registrations in relation to alcoholic beverages, but trade marks such as registration 760350 for an ‘Old No. 7’ label design extend to promotional items in class 28, including ‘playthings’. Although a ‘plaything’ is generally a children’s toy, there is an argument that such specification may be broad enough to capture a dog toy. In comparison, VIP Products does not appear to have any Australian trade mark applications or registrations in relation to its BAD SPANIEL brand, or any of its other marks and/or labelling. Therefore, the design on the BAD SPANIEL product could infringe JD’s marks, such as its label design, if it is using something which is either substantially identical or deceptively similar to JD’s registrations. Following the approach in Selfcare v Allergen, this assessment needs to be made based solely on the appearance of JD’s marks as they appear on the trade mark register, not taking into account any fame or notoriety of the JACK DANIELS brand.

The scale of JD’s reputation does become relevant when considering the likelihood of consumer confusion. It is not necessary for the consumer to believe that JD is selling the dog toy but rather that there is a real likelihood that that there is an affiliation between JD and VIP Products and/or that JD has provided consent to the selling of such dog toy. Notwithstanding the visual similarities and design concept of both products, we consider it unlikely that consumers will think a relationship exists between JD and VIP Products. In the context of Aldi v Thatchers, it is unlikely that the Bad Spaniels toy in question is likely to be misleading and deceptive due to its ‘low degree of similarity’ between the two different products.

Key takeaways

While Australian courts are not bound by international decisions, the case sheds light on the nuanced intersection of parody and copyright, distinctive trade dress, and consumer protection in trade mark law. The lessons arising from the case offer valuable insights for legal practitioners. It is important that you consider the following steps when enforcing and protecting your product packaging and trade mark rights in Australia:

• undertake comprehensive due diligence prior to applying for trade mark protection so that you are aware of existing trade marks;
• ensure intellectual property protection is secured;
• consider protecting the broader products that may not be considered as ‘core’ to your brand, but that may represent the trade mark;
• maintain your brand identity and commercial position by actively monitoring the market for potential unauthorised use of acquired trade mark rights; and
• develop and implement an enforcement strategy, which may involve the preparation and sending of cease and desist letters, negotiating settlements, or taking legal action if necessary.

If you require any further information or assistance in respect of trade mark registration and protection, please feel free to contact a member of our Intellectual Property & Technology, team to discuss possible solutions and next steps.

This article was written by Luke Dale, Partner and Alexia Daminato, Solicitor.

¹Section 32(1) and (2) Copyright Act
²Ibid section 36(1).
³Section 120(1)
⁴Section 120(2)
⁵Section 120(3)