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U.S. Supreme Court chews on Jack Daniel's fight against parody dog toy

By John Kruzel and Andrew Chung

WASHINGTON (Reuters) -U.S. Supreme Court justices on Wednesday sniffed around for a way to resolve a dispute over a dog toy parodying a Jack Daniel's whiskey bottle, though they clearly did not consider the case - exploring the boundary between creative expression and trademark infringement - an easy walk in the park.

The justices heard arguments in Jack Daniel's appeal of a lower court's ruling that the pun-laden "Bad Spaniels" vinyl chew toy sold by Phoenix-based VIP Products LLC qualifies as an "expressive work" protected by the U.S. Constitution's First Amendment. Jack Daniel's Properties Inc is owned by Louisville, Kentucky-based Brown-Forman Corp.

Some justices seemed wary of scrapping a longstanding legal test that provides an early off-ramp from costly litigation when parody items draw trademark infringement challenges, even as they acknowledged its imperfections and searched for alternatives.

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"I'm concerned about the First Amendment implications of your position," conservative Justice Samuel Alito told an attorney for Jack Daniel's, referring to the constitutional provision enshrining free-speech protections.

"Could any reasonable person think that Jack Daniel's had approved this use of the mark?" Alito asked.

The dispute pits the whiskey brand's trademark rights against legal protections for creative expression - in this case a send-up by VIP Products of Jack Daniel's Old No. 7 Tennessee whiskey bottle featuring excrement-themed changes like a label reading "the Old No. 2, on your Tennessee Carpet."

Lower courts ruled in favor of VIP Products after applying the so-called Rogers test - stemming from a dispute between actress Ginger Rogers and film director Federico Fellini. This test lets artists lawfully use another's trademark when doing so has artistic relevance to their work and would not explicitly mislead consumers about its source.

The justices expressed mixed sentiments about whether the Rogers test, arising from a 1989 case in which she sued over a Fellini movie, struck the right balance between a company's interest in protecting its corporate image against free speech protections.

Liberal justice Ketanji Brown Jackson posed sharp questions to a lawyer for VIP Products about whether the Rogers test was too permissive of "expressive works" that cause confusion. Jackson asked if products that risk confusing consumers should be allowed to sidestep a more-rigorous judicial test under which the nature of the product is just one of several factors under review.

"It sounds like what you're doing is saying when you're dealing with an expressive work, we get a pass under the Lanham Act," Jackson said, referring to the federal statute that governs trademark law.

A lawyer for President Joe Biden's administration urged the justices to discard the Rogers test in favor of the more-rigorous multi-factor test normally used in trademark-infringement cases, which looks squarely at whether the acts would likely cause marketplace confusion.

This so-called likelihood-of-confusion test can adequately account for lawsuits involving parodies, Justice Department lawyer Matthew Guarnieri said.

"Reasonable people are not likely to be confused about the source of those products," Guarnieri added. "That intuition is fully captured by the likelihood-of-confusion test."

Jack Daniel's also contested a finding by the San Francisco-based 9th U.S. Circuit Court of Appeals that VIP Product's use of its trademark was noncommercial. The 9th Circuit reasoned that because the trademark was used not only to sell dog toys but also "to convey a humorous message," it had not tarnished the distiller's distinctive mark.

Liberal Justice Elena Kagan expressed skepticism that the dog toy implicated free speech rights.

"This is a standard commercial product," Kagan told a lawyer for VIP Products, Bennett Cooper. "This is not a political T-shirt, it's not a film, it's not an artistic photograph."

Kagan added: "You're using it as a source identifier. It seems like just not a First Amendment-Rogers kind of case."

A decision in the case is expected by the end of June.

(Reporting by John Kruzel in Washington; Additional reporting by Blake Brittain; Editing by Will Dunham)