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IP Intelligence Report

Ninth Circuit Clarifies the Limits of Trademark Tarnishment in the Long-Running Bad Spaniels Dispute

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More than a decade after the dispute began, the Ninth Circuit recently issued another significant decision in the Bad Spaniels litigation, ultimately handing a victory to dog-toy maker VIP Products and providing important guidance on what trademark owners must prove to establish dilution by tarnishment. Notably, the decision states that an offensive or scatological association with a famous mark does not necessarily constitute evidence that the association is likely to damage the mark’s reputation.

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On Aug. 4, the Ninth Circuit vacated the Arizona district court’s permanent injunction against VIP’s Bad Spaniels dog toy and directed entry of judgment in VIP’s favor on Jack Daniel’s dilution-by-tarnishment claim. The decision follows the U.S. Supreme Court’s 2023 ruling that parody is not categorically exempt from trademark claims when the accused use also functions as a source identifier.

The Bad Spaniels toy at issue closely resembles the appearance of a Jack Daniel’s whiskey bottle while replacing key elements with humorous references, including Bad Spaniels, Old No. 2, 43% Poo By Vol. and 100% SMELLY. Although the Supreme Court rejected application of the Rogers test because VIP was using the design as a trademark for its own product, it left the merits of the infringement and dilution claims for the lower courts to decide.

On remand, the district court again found dilution by tarnishment. The Ninth Circuit disagreed.

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The Ninth Circuit emphasized that creating an association with a famous mark is only the starting point for a tarnishment claim. A plaintiff must go further and show that the association is likely to harm the famous mark’s reputation.

Jack Daniel’s relied heavily on expert testimony suggesting consumers generally react negatively when food or beverage products are associated with bathroom humor. The court found that evidence insufficient because it did not address whether consumers encountering the Bad Spaniels toy were likely to think less of the Jack Daniel’s brand as a result.

Although parody no longer provides an automatic shield where the accused use functions as a trademark, the Ninth Circuit reaffirmed that parody remains highly relevant to the merits analysis.

A successful parody simultaneously evokes the original brand while also signaling that it is not the original. According to the court, that second message can reduce the likelihood that consumers will perceive the use as harming the reputation of the famous mark. Because Bad Spaniels was an obvious joke, the court found that Jack Daniel’s had failed to show likely reputational injury.

Another important aspect of the decision is the court’s holding that fame must be analyzed separately for each asserted mark. Jack Daniel’s successfully established fame for the JACK DANIEL’S word mark and its bottle trade dress, but the court stated it failed to prove that OLD NO. 7 independently qualified as a famous mark under the federal dilution statute.

Audit your portfolio and identify which marks can be proven “famous” under the federal dilution statute.

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Do not assume that fame in a house mark extends to taglines, sub-brands, product names or packaging elements.

Develop product-specific consumer surveys and expert evidence when pursuing tarnishment claims.

Focus on proving actual reputational harm, not merely consumer association.

Consider whether litigation may amplify the challenged use and generate more attention than the parody itself.

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Practice Pointers for Accused Parody Users

Evidence showing consumers understand the use as an obvious joke may help defeat claims of reputational harm, even when parody is not a complete defense.

Context matters: the stronger the signal that the product is commentary rather than a source-identifying extension of the famous brand, the harder it may be for a plaintiff to prove tarnishment.

Survey evidence, marketplace context and the nature of the accused product all may help show that consumers understand the parody without transferring negative perceptions to the famous mark.

The Ninth Circuit’s decision does not eliminate dilution-by-tarnishment claims for parodies, but it makes clear that plaintiffs must present rigorous evidence of fame and likely reputational injury. Unless altered through rehearing or Supreme Court review, the decision directs entry of judgment for VIP and vacates the injunction against the Bad Spaniels toy. Going forward, courts are likely to scrutinize tarnishment claims more closely where the challenged use is humorous, obviously parodic and disconnected from the plaintiff’s actual goods or services. For now, Bad Spaniels stands as an important reminder that tarnishment requires more than a joke in bad taste; it also requires evidence that the joke is likely to damage the brand.

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