AZ toy company squeaks out court victory over Jack Daniel's

But it took a ruling by the 9th Circuit Court of Appeals to conclude that no one is going to confuse a squeaky plastic dog toy with a "Bad Spaniels'' label with the whiskey marketed by Jack Daniel's.

In the new ruling, the three-judge panel did not dispute that the toy, marketed by an Arizona company, looks like a bottle of the famous Tennessee whiskey.

But the judges said nothing about the sale of the product, clearly meant to be a parody, tarnishes the reputation of Jack Daniel's. That means the liquor company doesn't have a legal paw to stand on to try to keep the toy off the market, they decided.

In fact, VIP Products has put it back on the market for the first time since its sale was blocked in 2023 by the U.S. Supreme Court.

But for how long is anyone's guess. There was no response from Jack Daniels to inquiries on whether the company would again appeal court rulings in this case, which has been up and down the legal system since 2014.

Jack Daniel's Properties Inc. insisted the Bad Spaniels Silly Squeaker cannot legally be sold because the company "has a strong interest in protecting its trademarks and trade dress from association with juvenile bathroom humor.''

But there are differences between the whiskey bottle and the toy.

For example, the "Old No. 7 Tennessee Sour Mash Whiskey'' on the label is replaced by "The Old No. 2 on your Tennessee Carpet.'' It's also labeled "Bad Spaniels'' instead of "Jack Daniel's.''

And instead of alcohol-content descriptions, the toy was labeled "43% Poo by Vol.'' and "100% Smelly.''

The case went all the way to the Supreme Court, with the justices in 2023 siding with Jack Daniel's and enjoining further sale of the squeaky toy.

But that just sent the case back to a lower court over an unresolved side issue: Even if the toy does infringe on Jack Daniel's' trademark, does it actually matter?

No, wrote appellate Judge Milan Smith.

The key, the judge wrote in the new 28-page ruling, is whether the existence and sale of the toy actually tarnishes the reputation that Jack Daniel's cultivated for its whiskey.

Smith explained that Jack Daniel's first has to prove that its trademark, including the design of the bottle and the label, is "famous.'' Then it has to show that the design of the other product is similar to that famous mark.

But the judge said there's a third test: does the design of the toy create "a mental image'' associated with the Jack Daniel's trademark that is "likely to damage'' the liquor company's reputation? And Smith said that's where Jack Daniel's fell short.

"Understandably, Jack Daniel's seeks to protect the value of the marks that identify it as 'the producer of a quality product,' '' Smith wrote. The company also wants to ensure it "will reap the financial rewards associated with the product's good reputation.''

The problem with what Jack Daniel's is arguing, the judge said, is that the company has identified only two things that fit the definition of being "famous'' and protected by trademark law: the Jack Daniel's name and the "trade dress,'' meaning the design of the bottle and the label.

What is not protected, Smith wrote, are things written on the label, like "Old No. 7.'' That means the liquor company can't sue because the dog toy is labeled "Old No. 2,'' he said, rejecting the argument that it associated what's in a bottle of Jack Daniel's with excrement.

"Bad Spaniels is a parodic dog toy not intended for human consumption,'' Smith wrote. "There is no evidence from the record from which a court could reasonably infer that scatological references made on a dog toy have the same likelihood of generating disgust as identical references on a consumable product made for humans might.''

The judge noted that even an expert witness called by the whiskey company testified that "no consumer would think there's poo in the Jack Daniel's product.''

"Parody ... is inherent in the Bad Spaniels product,'' Smith wrote. "Indeed, as (the company witness) recognized it, it was the 'whole point.' ''

Unless overturned, the new ruling does more than make the $16.46 Bad Spaniels toy available from the company website. It also clears the way for VIP to continue producing other squeaky dog toys that mimic other products, including Heine Sniff'n in something that looks like a Heineken bottle, Mountain Drool that mimics a Mountain Dew bottle, and Cataroma that bears more than a passing resemblance to a bottle of Corona.