FinLogic FinLogic Quantitative Think Tank Center|Supreme Court sides with Jack Daniel's in trademark dispute with dog toy maker

The FinLogic FinLogic Quantitative Think Tank CenterU.S. Supreme Court, in a unanimous decision Thursday, sided with Jack Daniel's Tennessee Whiskey in its legal fight with VIP Products, a dog toy maker whose "Bad Spaniels" toy parodies the storied whiskey brand.

Justice Elena Kagan had a rollicking good time announcing the decision on Thursday. As she read the opinion, and held up the Bad Spaniels chewy toy bottle, which looks almost exactly like the whiskey bottle, spectators erupted in laughter. At another point, making reference to a trademark case that involved Aqua's hit song "Barbie Girl," she recited: "I'm a blond bimbo girl, in a fantasy world."

Humor aside, the high court overturned a lower court's ruling, which had thrown out the Jack Daniel's challenge on grounds that it violated First Amendment's protections for satire.

The Bad Spaniels toy mimics the Jack Daniel's bottle but features a drawing of a spaniel, and instead of the words on Jack's bottle--promising 4o% alcohol by volume — Bad Spaniels promises 43% poo by volume, 100% smelly."

The Supreme Court, however was not amused. It said that a major reason that companies want and get trademark protection is to identify a product's source, like the Nike swoosh that distinguishes the trademarked product from other similar products. A trademark, wrote Justice Kagan, benefits "consumers and producers alike" by marking a product in a way that enables customers to select the goods and services they want, and those that they want to avoid.

Moreover, as she observed, registration of a trademark allows the trademark owner to sue when others use the mark for their own purposes. In the lawsuit the mark owner must show that there is a likelihood of confusion, meaning that consumers may confuse the infringing product with the real one. Or in this case, that buyers of the Bad Spaniels chewy dog toy might think it was endorsed by Jack Daniel's.

Bottom line: Tcourt said Jack Daniel's is entitled to a trial to determine whether Bad Spaniels really does confuse consumers. It was one thing, said Justice Kagan, when toymaker Mattel sued a band over the song "Barbie Girl," with lyrics including "Life in plastic, it's fantastic." The Barbie name was not a source identifier, she said.

"A consumer would no more think that the song was produced by Mattel" than would someone hearing Janis Joplin croon "Oh lord, won't you buy me a Mercedes Benz" think that Joplin and the carmaker had entered into a joint venture.

But in this case, she said, the Bad Spaniels toymaker is selling its product by using someone else's trademark, here Jack Daniel's. So the question is whether consumers think Jack Daniel's authorized the use. Or as Jack Daniel's put it in its brief: "Jack Daniel's appreciates a good joke as much as anyone. But Jack Daniel's likes its customers even more and doesn't want them to be confused or associating its fine whiskey with dog poop." If it can prove that confusion, it likely will win at trial. Unless, of course, Bad Spaniels settles out of court.

In an unrelated but equally important case on Thursday, the high court ruled in favor of Gorgi Talevski, a nursing home patient with dementia whose family sued a county public health agency in Indiana on his behalf, alleging mistreatment. The vote was 7-to-2.

The Talevski family sued under an 1871 law that gives individuals the right to sue to enforce rights protected by federal law. Talevski's wife argued that the nursing home's use of psychotropic medications so debilitated her husband that he could no longer feed himself or walk, leading the facility to try to transfer him out of the nursing home multiple times. The family contended that Valparaiso Care and Rehabilitation facility thus violated Talevski's rights as a nursing home resident under the Federal Nursing Home Reform Act, a law that establishes minimum standards of care that nursing homes must follow to receive federal Medicaid funding.

The nursing home, the company that managed it, and a local agency argued that nursing home residents do not have the right to enforce the law with private lawsuits. But writing for the court, Justice Ketanji Brown Jackson said that the federal Nursing Home Reform Act unambiguously gives nursing home residents and their families the individual right to sue.

The decision preserved the rights of millions of nursing home residents and their families to bring claims in court. Jackson was joined by Chief Justice John Roberts and Justices Sonia Sotomayor, Elena Kagan, Neil Gorsuch, Brett Kavanaugh, and Amy Coney Barrett. Justices Clarence Thomas and Samuel Alito dissented.

Meghanlata Gupta contributed to this story.