Case 2:14-cv-02057-SMM Document 245 Filed 01/30/18 Page 1 of 24
`
`WO
`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF ARIZONA
`
`No. CV-14-2057-PHX-SMM
`
`FINDINGS OF FACT, CONCLUSIONS
`OF LAW, AND ORDER
`
`))))))))))))))
`
`VIP Products, LLC,
`Plaintiff,
`
`vs.
`Jack Daniel’s Properties, Inc.,
`Defendant,
`
`And Related Counterclaims.
`_________________________________
`
`In earlier proceedings, the Court resolved the parties’ cross-motions for summary
`judgment, denying Plaintiff’s motion for summary judgment, and granting Defendant’s
`motion for partial summary judgment. (Doc. 171.) The remaining claims involve trademark
`and trade dress dilution under federal and state law, as well as trademark and trade dress
`infringement under federal and state law. (Id.)
`The Court held a four-day bench trial beginning on October 2, 2017. Pursuant to Rule
`52(a) of the Federal Rules of Civil Procedure, having heard the evidence and determined the
`credibility of the witnesses, THE COURT NOW FINDS BY A PREPONDERANCE OF
`THE EVIDENCE THE FOLLOWING FACTS AND STATES ITS CONCLUSIONS
`OF LAW.
`The Court finds in favor of Defendant and against Plaintiff on all remaining claims.
`Consequently, the Court will grant Defendant’s requests and order permanent injunctive
`
`1 2 3 4 5 6 7 8 9
`
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`

`

`Case 2:14-cv-02057-SMM Document 245 Filed 01/30/18 Page 2 of 24
`
`relief.
`I.
`
`PARTIES
`1. Plaintiff VIP Products, LLC, (“VIP”) designs, manufactures, markets, and sells
`chew toys for dogs. VIP sells various brands of dog chew toys, including the “Tuffy’s” line
`(durable sewn/soft toys), the “Mighty” line (durable toys made of a different material than
`the Tuffy’s line), and the “Silly Squeakers” line (durable rubber squeaky novelty toys). (Doc.
`242 at 3.) VIP is an Arizona limited liability company with its principal place of business in
`Phoenix, Arizona. (Docs. 49 ¶ 1; 204-1, Ex. A.) President of VIP Steven Sacra and his wife
`are the principal owners of VIP. (Doc. 234 at 24.) Mr. Sacra is a talented entrepreneur who
`developed the line of VIP dog toys. (Id. at 30-37.) His talent and creativity often lead to “of
`the moment” inspiration, such as toys Mr. Sacra believes are parodies of other companies’
`products. (See, e.g., Doc. 237 at 102.).
`2. Defendant Jack Daniel’s Properties, Inc. (“Jack Daniel’s”) is a Delaware
`corporation with its principal place of business in San Rafael, California. (Docs. 1 ¶ 2, 15-1
`¶ 2.)
`II.
`
`PRE-LITIGATION FACTUAL FINDINGS
`3. Jack Daniel’s owns and licenses the trademarks and trade dress used in connection
`with Jack Daniel’s products. (Docs. 105; 204-1, Ex. A.)
`4. Jack Daniel’s Tennessee whiskey has been sold in the United States continuously
`since at least 1875, except during Prohibition. (Doc. 105; U.S. Trademark Reg. No. 42,663.)
`5. Jack Daniel’s Tennessee whiskey has borne the JACK DANIEL’S trademark and
`the OLD NO. 7 trademark since 1875. (Doc. 234 at 51-52 (discussing U.S. Trademark Reg.
`Nos. 42,663, 582,789, and 1,923,981).) Jack Daniel’s federal registrations of its trademarks
`and trade dress for whiskey also includes Trademark Reg. No. 4,106,178 for the
`three-dimensional configuration of a square shape bottle container. (Doc. 12 at 7.) Jack
`Daniel’s trade dress has included these trademarks for many decades. (Doc. 234 at 55-56,
`68.)
`
`6. Jack Daniel’s has maintained an active brand licensing program for many years.
`
`- 2 -
`
`1 2 3 4 5 6 7 8 9
`
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`

`

`Case 2:14-cv-02057-SMM Document 245 Filed 01/30/18 Page 3 of 24
`
`(Docs. 105, Ex. 1; 234 at 68-69; 111-113.)
`7. Jack Daniel’s trademarks and trade dress have appeared on thousands of products
`other than whiskey, including food, apparel, and a limited number of pet products. (Doc. 230-
`16 thru 231-7.) Jack Daniel’s offers branded dog leashes, collars, and dog houses. (Docs. 234
`at 113, 230-9 thru 230-12.) Jack Daniel’s has offered these dog accessories since before the
`events giving rise to this case. (Doc. 241 at 7.)
`8. Initially launched in approximately 2007, VIP’s Silly Squeakers line of dog toys
`includes a variety of toys in the shapes of beer, wine, soda, and liquor bottles. (Doc. 236 at
`31-38.)
`9. Mr. Sacra’s intent behind producing the Silly Squeakers line of toys was to develop
`a creative parody on existing products. (Id. at 45-47, 56.) Mr. Sacra provided examples of
`this line of toys, including “Smella R-Crotches” a parody of Stella Artois, “Heini Sniff’n”
`a parody of Heineken, and “Pissness” a parody of Guinness. (Doc. 237 at 96-98.) According
`to Mr. Sacra, these parodies are just harmless, clean fun, and are not distasteful or harmful.
`(Id. at 99.)
`10. VIP created and marketed the “Bad Spaniels” silly squeaker dog toy. (Doc. 158.)
`The “Bad Spaniels” toy is in the shape of a liquor bottle and features a wide-eyed spaniel
`over the words “Bad Spaniels”, “the Old No. 2, on your Tennessee Carpet.” (Id.) At the
`bottom of the “Bad Spaniels” toy, it reads: “43% POO BY VOL.” and “100% SMELLY”.
`On the back of the Silly Squeakers label for the “Bad Spaniels” toy, it states: “This product
`is not affiliated with Jack Daniel Distillery.” (Id.)
`11. VIP’s intent behind designing the “Bad Spaniels” toy was to match the bottle
`design for Jack Daniel’s Tennessee Sour Mash Whiskey (“Old No. 7 Brand”). (Doc. 157.)
`These design elements include the size and shape of the product, the use of white lettering
`over a black background, and font styles.
`12. Mr. Sacra originally coined the name “Bad Spaniels”, and then requested
`Designer Elle Phillips to work on a proposed design. (Doc. 236 at 55-56.) Ms. Phillips
`understood that “Bad Spaniels” was a reference to “Jack Daniel’s.” (Doc. 233-1 at 47, 49-
`
`1 2 3 4 5 6 7 8 9
`
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`- 3 -
`
`

`

`Case 2:14-cv-02057-SMM Document 245 Filed 01/30/18 Page 4 of 24
`
`50.) Ms. Phillips was familiar with that brand and had consumed Jack Daniel’s Tennessee
`whiskey in bars and in her home. (Id. at 52-53.)
`13. Prior to starting the design for “Bad Spaniels,” Ms. Phillips recalled various Jack
`Daniel’s packaging features from memory, including “[t]he black and white label, sort of a
`cursive font for Tennessee, simple type,” and the square shape of the bottle, as well as the
`use of a number on the neck label. (Id. at 53-54.)
`14. Ms. Phillips then retrieved a bottle from her liquor cabinet, examined it, and
`placed it on her desk while she developed a sketch. (Id. at 54-55, Docs. 104-1 at 101-02, 225-
`17.) She referenced the Jack Daniel’s bottle “every now and then throughout the process.”
`(Doc. 233-1 at 66-67.) Ms. Phillips wanted her sketch to be close to the same as the Jack
`Daniel’s bottle. (Id. at 67.)
`15. When finished, the “Bad Spaniels” product featured all the elements of the Jack
`Daniel’s Trade Dress, including the bottle shape, color scheme, and trademark stylization,
`as well as the word “Tennessee,” and the font and other graphic elements. (Doc. 158.)
`16. “Bad Spaniels” was introduced in 2014 and in the VIP catalogs, the “Bad
`Spaniels” product appears in a bar setting alongside various hanging bottles, one of which
`can be recognized as a Jack Daniel’s bottle. (Docs. 227-7 and 227-8.)
`III.
`LITIGATION HISTORY
`17. After VIP introduced “Bad Spaniels,” Jack Daniel’s promptly demanded that it
`stop selling the new toy. (Doc. 47.) VIP responded by filing a complaint seeking a
`declaratory judgment that “Bad Spaniels” did not infringe or dilute any trademark or trade
`dress rights owned by Jack Daniel’s. (Doc. 49 at 9-11.)
`18. Subsequently, the parties filed dispositive motions. (Docs. 101, 110.)
`19. In ruling on the motions, the Court ruled in favor of Jack Daniel’s and against VIP,
`rejecting VIP’s defenses of nominative and First Amendment fair use, and that VIP failed to
`rebut the validity of the Jack Daniel’s bottle design registration. (Doc. 171.) In addition, the
`Court found as a matter of law that Jack Daniel’s trade dress and bottle design are distinctive,
`not generic, and that they are nonfunctional. (Id.); see Kendall-Jackson Winery, Ltd. v. E.
`
`1 2 3 4 5 6 7 8 9
`
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`- 4 -
`
`

`

`Case 2:14-cv-02057-SMM Document 245 Filed 01/30/18 Page 5 of 24
`
`& J. Gallo Winery, 150 F.3d 1042, 1047 (9th Cir. 1998) (stating that whether it be a
`trademark or a trade dress claim, a plaintiff must meet three basic elements: (1)
`distinctiveness, (2) nonfunctionality, and (3) likelihood of confusion).
`20. The Court left for trial the remaining issues of Jack Daniel’s claim for dilution by
`tarnishment and Jack Daniel’s claim for infringement–the remaining issue of likelihood of
`confusion. (Doc. 171.)
`21. At this point in the litigation, VIP does not contest the validity of Jack Daniel’s
`prior trademarks and trade dress registrations. (Doc. 242 at 33.)
`IV. DILUTION BY TARNISHMENT
`22. On October 6, 2006, the Trademark Dilution Revision Act of 2006 (the “TDRA”),
`was signed into law. See Pub.L. 109–312, 120 Stat. 1730 (Oct. 6, 2006). The TDRA defines
`dilution as follows:
`Subject to the principles of equity, the owner of a famous mark that is
`distinctive, inherently or through acquired distinctiveness, shall be entitled to
`an injunction against another person who, at any time after the owner’s mark
`has become famous, commences use of a mark or trade name in commerce that
`is likely to cause dilution by blurring or dilution by tarnishment of the famous
`mark, regardless of the presence or absence of actual or likely confusion, of
`competition, or of actual economic injury.
`15 U.S.C. § 1125(c)(1) (establishing a likelihood of dilution standard).
`23. The phrase “likely to cause dilution” used in the TDRA significantly changes the
`meaning of the law from “causes actual harm” under the preexisting law to “likely” or
`“likelihood” which means probably. See V Secret Catalogue, Inc. v. Moseley, 605 F.3d 382,
`388 (6th Cir. 2010).
`24. The TDRA further defines dilution by tarnishment, as follows: “For purposes of
`[15 U.S.C. § 1125(c)(1)], ‘dilution by tarnishment’ is association arising from the similarity
`between a mark or trade name and a famous mark that harms the reputation of the famous
`mark.” 15 U.S.C. § 1125(c)(2)(C); Mattel, Inc. v. MCA Records, Inc., 296 F.3d 894, 903 (9th
`Cir. 2002) (stating that generally dilution “refers to the whittling away of the value of a
`trademark when the mark is used to identify different products.”) (further quotation and
`citation omitted).
`
`1 2 3 4 5 6 7 8 9
`
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`- 5 -
`
`

`

`Case 2:14-cv-02057-SMM Document 245 Filed 01/30/18 Page 6 of 24
`
`25. To prove dilution by tarnishment under the TDRA, Jack Daniel’s must prove that
`at least one of its asserted trademark and trade dress rights was not only valid but also famous
`before the accused use began, and that the accused use is likely to cause negative associations
`that harms the reputation of the famous mark. See 15 U.S.C. § 1125(c); A.R.S. § 44-1448.01;
`Jada Toys, Inc. v. Mattel, Inc., 518 F.3d 628, 634 (9th Cir. 2008); Moab Industries, LLC v.
`FCA US, LLC, No. CV 12-8247, 2016 WL 5859700, *8 (D. Ariz. 2016) (stating that the
`“elements necessary to prove [an Arizona] state law trademark dilution counterclaim are
`basically identical” to federal trademark dilution claims).
`(A) Fame
`26. A trademark or trade dress is famous if “it is widely recognized by the general
`consuming public of the United States as a designation of source.” 15 U.S.C. §
`1125(c)(2)(A). All relevant factors may be considered, including: “the duration, extent, and
`geographic reach of advertising and publicity of the mark”; “the amount, volume, and
`geographic extent of sales of goods or services offered under the mark”; “the extent of actual
`recognition of the mark”; “and whether the mark [has been] registered . . . on the principal
`register.” 15 U.S.C. § 1125(c)(2)(A)(i)-(iv); accord A.R.S. § 44-1448.01(A)(1-8).
`27. Based on the relevant fame factors, 15 U.S.C. § 1125(c)(2)(A)(i)-(iv), advertising,
`sales, actual recognition, and prior registration, the Court finds that Jack Daniel’s trademarks
`and trade dress are famous and were famous before VIP introduced “Bad Spaniels” in July
`2014.
`
`28. Regarding advertising, Jack Daniel’s spent hundreds of millions of dollars to
`promote Jack Daniel’s whiskey. (Docs. 234 at 55-56, 59-69, 80; see also Docs. 220, Exs.
`105-24; Doc. 229-5 thru 229-9, 229-13, and 229-16.)
`29. Regarding sales, Jack Daniel’s is the best-selling whiskey in the United States
`since 1997, exceeding 75 million cases and 10 billion dollars in sales. (Doc. 234 at 48-50.)
`30. Regarding actual recognition, Jack Daniel’s trademarks have been used
`continuously for over a century, except during Prohibition. (Doc. 234 at 49-52.) Jack
`Daniel’s trademarks and trade dress have been seen by millions of Americans in movies, and
`
`1 2 3 4 5 6 7 8 9
`
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`- 6 -
`
`

`

`Case 2:14-cv-02057-SMM Document 245 Filed 01/30/18 Page 7 of 24
`
`television programs. (Doc. 234 at 62-66, 68; Doc. 220, Exs. 107, 109-11, and 146.) Jack
`Daniel’s is prominently featured at jackdaniels.com, which was visited more than four
`million (4,000,000) times during 2014. (Docs. 234 at 66; Docs. 220, Ex. 112, and 229-8.)
`Jack Daniel’s trade dress is prominently featured on social media pages for the brand. (Doc.
`234 at 66, Doc. 229-9.) Based on Jack Daniel’s internal records, aided consumer awareness
`of the Jack Daniel’s brand is consistently around 98%.1 (Doc. 234 at 50.)
`31. Based on the foregoing, the Court finds that Jack Daniel’s carried its burden of
`demonstrating that its trademarks and trade dress were famous before VIP’s “Bad Spaniels”
`use began in July 2014. Jack Daniel’s trademark and trade dress were widely recognized by
`the general consuming public of the United States in July 2014. Thus, Jack Daniel’s
`established its fame under both the federal TDRA and Arizona state law, A.R.S. §
`44-1448.01(A)(1-8).
`(B) Similarity
`32. Under the TDRA’s likelihood of dilution standard, in order to establish similarity
`in a dilution by tarnishment case, a party must show only “similarity,” not substantial
`similarity or nearly identical, between the famous mark and the accused mark. See Levi
`Strauss & Co. v. Abercrombie & Fitch Trading Co., 633 F.3d 1158, 1159 (9th Cir. 2011)
`(stating that “the ‘identical or nearly identical’ standard did not survive Congress’s enactment
`of the TDRA.”) Now a party only must show “similarity” between the famous mark and the
`accused mark. Id. at 1171.
`33. The factors under consideration for determining similarity in a dilution by
`tarnishment case have not been clearly defined. See Nordstrom, Inc. v. NoMoreRack Retail
`Grp., Inc., No. CV 12-1853, 2013 WL 1196948, at *11 (W.D. Wash. Mar. 25, 2013). To
`resolve the question of similarity, the Court considers “the factors of appearance, sound and
`meaning,” factors that are also relevant in evaluating infringement. See Nordstrom, 2013 WL
`1196948, at *11.
`
`1Aided brand awareness measures the number of people who express knowledge of
`a brand or product when prompted (brand recognition).
`
`1 2 3 4 5 6 7 8 9
`
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`- 7 -
`
`

`

`Case 2:14-cv-02057-SMM Document 245 Filed 01/30/18 Page 8 of 24
`
`34. Here, VIP intended and produced a dog toy that included and was similar to Jack
`Daniel’s trademarks and trade dress. (Doc. 241 at 13-15.) VIP appropriated the Jack Daniel’s
`trade dress in every aspect: “Jack Daniel’s” became “Bad Spaniels, ” “Old No. 7” became
`“Old No. 2,” and “Tennessee whiskey” became “Tennessee carpet.” Meanwhile, the square
`bottle shape, the nearly identical size of the two products, the ribbed neck, arched lettering,
`filigreed border, black-and-white color scheme, fonts, shapes, and styles remain virtually
`unchanged. “With a single glance . . . one is immediately struck by their similarity.”
`GoTo.com, Inc. v. Walt Disney Co., 202 F.3d 1199, 1206 (9th Cir. 2000).
`35. VIP does not contest similarity; rather, despite some minor artistic variations, VIP
`concedes that it used Jack Daniel’s trademarks and trade dress as a model for its “Bad
`Spaniels” dog toy. (Doc. 242 at 31.)
`36. Based on the foregoing, the Court finds that Jack Daniel’s established the
`requisite similarity between VIP’s “Bad Spaniels” and Jack Daniel’s trademark and trade
`dress. Thus, the Court finds similarity between the two products under both the federal
`TDRA and Arizona state law, A.R.S. § 44-1448.01(A)(1-8).
`(C) Reputational Harm
`37. Finally, under the TDRA, the last factor focuses on reputational harm, that is,
`whether associations from VIP’s “Bad Spaniels” product “harms the reputation of the famous
`mark,” Jack Daniel’s trademarks and trade dress. See 15 U.S.C. § 1125(c) (2)(C).
`38. Reputational harm “generally arises when the plaintiff’s trademark is linked to
`products of shoddy quality, or is portrayed in an unwholesome or unsavory context likely to
`evoke unflattering thoughts about the owner’s product.” Tiffany (NJ) Inc. v. eBay Inc., 600
`F.3d 93, 111 (2d Cir. 2010) (quoting Deere & Co. v. MTD Prods., Inc., 41 F.3d 39, 43 (2d
`Cir. 1994)). For example, there is a strong consensus among courts across jurisdictions that
`a famous mark is tarnished when it is semantically associated with a new mark that it is using
`to sell sex-related products. See V Secret, 605 F.3d at 388 (citing cases in support).
`39. A trademark may also be tarnished if the mark loses its ability to serve as a
`“wholesome identifier” of the plaintiff’s product. Starbucks Corp. v. Wolfe’s Borough
`
`1 2 3 4 5 6 7 8 9
`
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`- 8 -
`
`

`

`Case 2:14-cv-02057-SMM Document 245 Filed 01/30/18 Page 9 of 24
`
`Coffee, Inc., 588 F.3d 97, 110 (2d Cir. 2009) (citing Hormel Foods Corp. v. Jim Henson
`Prods., Inc., 73 F.3d 497, 507 (2d Cir. 1996)). The Second Circuit found that the relevant
`inquiry is how the junior mark’s product affects the positive impressions about the famous
`mark’s product, and not whether a consumer simply associates a negative sounding junior
`mark with the famous mark. Starbucks, 588 F.3d at 110.
`40. Regarding reputational harm, both parties engaged experts. The determination of
`an expert’s credibility and the weight to be given expert testimony and evidence is a matter
`within the discretion of the trier of fact, which in a bench trial like the instant case, is a matter
`for the Court. See Fox v. Dannenberg, 906 F.2d 1253, 1256 (8th Cir. 1990). This Court
`decides how much weight to give the evidence and the testimony presented. Id.
`41. Jack Daniel’s engaged Dr. Itamar Simonson, a Professor of Marketing at Stanford
`University. (Doc. 234 at 154-62.) Dr. Simonson, relying on consumer psychology research,
`concluded that VIP’s introduction of “Bad Spaniels” into the marketplace resulted in Jack
`Daniel’s trademarks and trade dress being diluted by tarnishment. (Id. at 162-74.)
`42. VIP engaged Mr. Bruce Silverman, an advertising, marketing, and branding
`consultant for the past 40-50 years, to rebut the opinion of Dr. Simonson and his findings.
`(Doc. 238 at 9-31.)
`Dr. Itamar Simonson, Credentials and Findings
`43. Dr. Simonson has served as an expert witness on numerous occasions, providing
`testimony on issues related to marketing, consumer behavior, trademark-related matters, false
`advertising, and branding. (Doc. 234 at 161.)
`44. Dr. Simonson has conducted, supervised, or evaluated over one thousand
`marketing research studies. (Id. at 155-59, 61-62.) Such studies related to consumer behavior,
`consumer information processing, brand equity, trademarks, branding, marketing strategies,
`and advertising. (Id.)
`45. Dr. Simonson’s opinions here are supported by empirical studies in which there
`are two stages to establish a likelihood of dilution by tarnishment. (Id. at 162-63.) One,
`whether the allegedly diluting product will bring to mind or call to mind the allegedly diluted
`
`1 2 3 4 5 6 7 8 9
`
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`- 9 -
`
`

`

`Case 2:14-cv-02057-SMM Document 245 Filed 01/30/18 Page 10 of 24
`
`mark, and two, assuming that the allegedly diluting product does call to mind the allegedly
`diluted mark, has it affected the brand equity and brand association of the allegedly diluted
`mark. (Id.)
`46. The first stage was satisfied because the whole point of VIP’s product was to bring
`“Jack Daniel’s Old No. 7 to mind.” (Id. at 163.)
`47. Consumer psychology research utilized to evaluate the second stage was based on
`numerous empirical studies: The Court credits that the studies relied upon by Dr. Simonson
`support certain conclusions that apply to all products and services regarding the impact of
`adding a negative association onto the association of the existing brand. (Id.)
`48. The Associative Network Model has been empirically tested and verified
`numerous times since the 1970’s. (Id. at 164-66.) Regarding application of the Associative
`Network Model, the Court credits Dr. Simonson that when consumers are evaluating brands
`certain mental associations come to mind. (Id. at 164.)
`49. In accordance with the Associative Network Model and based upon Dr.
`Simonson’s review of Jack Daniel’s commercials and advertisements, his understanding
`about the Jack Daniel’s brand, and the key messages Jack Daniel’s communicates regarding
`its brand values (namely authenticity, integrity, independence, loyalty), the Court credits Dr.
`Simonson’s testimony of documented positive mental associations that come to mind when
`evaluating Jack Daniel’s before VIP introduced the “Bad Spaniels” dog toy. (Doc. 234 at
`169-70.)
`50. Based upon the Associative Network Model, the Court credits Dr. Simonson’s
`conclusion regarding the effects of “Bad Spaniels” and the negative mental associations that
`come to mind when you include defecation, feces, and poo upon consumers who are
`evaluating Jack Daniel’s whiskey. (Id. at 170-72.)
`51. Dr. Simonson relied on consumer psychology research to establish that when you
`associate any food or beverage with defecation, you are creating disgust in the mind of the
`consumer with respect to that food or beverage associated with defecation. (Id. at 172-74,
`180.) Well documented empirical research supports that the negative associations of “Old
`
`1 2 3 4 5 6 7 8 9
`
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`- 10 -
`
`

`

`Case 2:14-cv-02057-SMM Document 245 Filed 01/30/18 Page 11 of 24
`
`No. 2” defecation and “poo by weight” creates disgust in the mind of the consumer when the
`consumer is evaluating Jack Daniel’s whiskey. (Id. at 171-72.)
`52. Dr. Simonson relied on consumer psychology research in his evaluation of the
`second phase regarding likelihood of dilution by tarnishment. (Id.)
`53. Based on the Associative Network Model, the Court credits Dr. Simonson that the
`“Bad Spaniels” product is likely to tarnish the Jack Daniel’s trademarks and trade dress by
`creating negative associations, either consciously or unconsciously, and undermining the pre-
`existing positive associations with its whiskey (“Old No. 2 on your Tennessee carpet”). (Doc.
`234 at 172-74, 220.)
`54. The Court credits Dr. Simonson’s conclusion that such negative associations are
`particularly harmful for a company such as Jack Daniel’s because the goods it offers for sale
`involves human consumption and human consumption and canine excrement do not mix. (Id.
`at 172-74.) Further, because Jack Daniel’s brand name along with its equity is a very
`important asset. (Id. at 160.)
`Mr. Bruce Silverman, Credentials and Findings
`55. VIP engaged its own expert, Bruce Silverman, to rebut the opinion of Dr.
`Simonson and his findings. (Doc. 238 at 31.) Mr. Bruce Silverman has been an advertising,
`marketing, and branding consultant for the past 40-50 years. (Id. at 9-31.) He has worked
`with companies that manufacture or produce goods and services, as well as his main work
`with advertising and public relations agencies. (Id.)
`56. In West Los Angeles, Mr. Silverman arranged four focus groups2 to test consumer
`reactions to “Bad Spaniels” which according to Mr. Silverman had an overall favorable
`impression of Jack Daniel’s upon discussing the “Bad Spaniels” dog toy. (Id. at 44-50.)
`57. Mr. Silverman’s reliance on the West Los Angeles focus groups is flawed because
`
`2Focus groups are a research method whereby consumers from a target market are led
`through a discussion regarding a particular topic and give insight as to why and how
`consumers use a product or service, what is important to them in choosing a particular brand,
`what they like and don’t like about various products or services, and any special needs they
`might have that aren’t being satisfied.
`
`- 11 -
`
`1 2 3 4 5 6 7 8 9
`
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`

`

`Case 2:14-cv-02057-SMM Document 245 Filed 01/30/18 Page 12 of 24
`
`the groups were initially directed by the moderator that the product under evaluation, “Bad
`Spaniels”, was a joke, a spoof product, and as a result the focus groups produced
`predetermined results. (Doc. 234 at 181, 183.) This tainted the group’s conclusions.
`Moreover, Mr. Silverman did not have expertise or specialized knowledge in trademark
`dilution matters; rather, his experience was in advertising. (Id. at 208.)
`58. Finally, Jack Daniel’s trademarks and trade dress are tarnished by associating
`them with toys, particularly the kind of toys that might appeal to children. (Doc. 238 at 96-
`97, 110-11.) The Court finds that while an association with toys may not ordinarily cause
`reputational harm, Jack Daniel’s is in the whiskey business, and does not market to children,
`does not license goods for children, and does not license goods that might appeal to children.
`(Id.)
`
`59. Here, the Court credits and gives prevailing weight to Dr. Simonson’s specialized
`knowledge and specific expertise in consumer psychology to evaluate and conclude a
`likelihood of dilution by tarnishment regarding the effect of the “Bad Spaniels” dog toy upon
`the Jack Daniel’s trademarks and trade dress. (Doc. 234 at 172-74, 184-87; see Eastman
`Kodak Co. v. Rakow, 739 F. Supp. 116, 118 (W.D.N.Y. 1989) (stating that it does not matter
`whether this association is humorous or intended as such and enjoining use of the stage name
`KODAK by a stand-up comedian); Grey v. Campbell Soup Co., 650 F. Supp. 1166, 1175
`(C.D. Cal. 1986) (enjoining use of DOGIVA and CATIVA as harmful to Campbell’s
`GODIVA business reputation because of the negative association the public makes between
`Godiva’s premium quality food products and animal treats); Steinway & Sons v. Robert
`Demars & Friends et al., 210 U.S.P.Q. 954 (C.D. Cal. 1981) (enjoining sale of clip-on
`beverage can handles under the name STEIN-WAY, finding that such association will
`inevitably tarnish Steinway’s reputation and image with the public as sponsoring only
`products of taste, quality and distinction); see generally Chemical Corp. of Am. v.
`Anheuser–Busch, Inc., 306 F.2d 433, 436–38 (5th Cir. 1962) (enjoining use of “Where
`there’s life ... there’s bugs!” slogan); Original Appalachian Artworks, Inc. v. Topps Chewing
`Gum, Inc., 642 F. Supp. 1031, 1039 (N.D. Ga. 1986) (tarnishment “occurs when a defendant
`
`1 2 3 4 5 6 7 8 9
`
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`- 12 -
`
`

`

`Case 2:14-cv-02057-SMM Document 245 Filed 01/30/18 Page 13 of 24
`
`uses the same or similar marks in a way that creates an undesirable, unwholesome, or
`unsavory mental association with the plaintiff’s mark”).
`60. Accordingly, Dr. Simonson established that, the “Bad Spaniels” product is likely
`to tarnish the Jack Daniel’s trademarks and trade dress by creating negative associations,
`either consciously or unconsciously, and undermining the pre-existing positive associations
`with its whiskey (“Old No. 2 on your Tennessee carpet”). (Doc. 234 at 172-74, 220.) This
`negative association is particularly harmful for a company such as Jack Daniel’s because the
`goods it offers for sale involves human consumption and human consumption and canine
`excrement do not mix. (Id. at 172-74.)
`61. The Court further finds that dilution by tarnishment will occur due to Jack
`Daniel’s trademarks and trade dress being associated with toys, particularly the kind of toys
`that might appeal to children; Jack Daniel’s is in the whiskey business and its reputation will
`be harmed due to the negative mental association of evoking whiskey with children,
`something Jack Daniel’s has never done. (Id. at 96-97, 110-11.)
`law, A.R.S. §
`62. Thus, under
`the federal TDRA and Arizona state
`44-1448.01(A)(1-8), Jack Daniel’s has established the requisite reputational harm to its
`trademarks and trade dress as a result of VIP’s creation and introduction of “Bad Spaniels”
`into the pet toy market.
`(D) Conclusion–Dilution by Tarnishment
`63. The Court finds that Jack Daniel’s established by a preponderance of the evidence
`all the requisite elements for dilution by tarnishment: fame, similarity, and reputational harm,
`caused by VIP’s “Bad Spaniels” against Jack Daniel’s trademark and trade dress under both
`the federal TDRA and Arizona state law, A.R.S. § 44-1448.01(A)(1-8).
`V.
`TRADEMARK/TRADE DRESS INFRINGEMENT
`64. Whether a trademark or trade dress claim, Jack Daniel’s must meet three elements
`in order to establish infringement: (1) distinctiveness; (2) nonfunctionality, and (3) the
`likelihood of confusion. See Kendall-Jackson, 150 F.3d at 1047.
`65. This Court previously ruled as a matter of law that Jack Daniel’s trademarks and
`
`1 2 3 4 5 6 7 8 9
`
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`- 13 -
`
`

`

`Case 2:14-cv-02057-SMM Document 245 Filed 01/30/18 Page 14 of 24
`
`trade dress are distinctive and nonfunctional. The issue remaining at trial is likelihood of
`consumer confusion. (Doc. 171.)
`66. To prevail on its trademark and trade dress infringement claims under federal and
`state law, Jack Daniel’s must show ownership, meaning that at least one of its asserted rights
`was valid before VIP’s alleged infringing use began, and VIP’s use caused a “likelihood of
`confusion.” See 15 U.S.C. §§ 1114, 1125(a); Brookfield Commc’ns v. West Coast Entm’t
`Corp., 174 F.3d 1036, 1046 n.8 (9th Cir. 1999); Kendall-Jackson, 150 F.3d at 1047; Angel’s
`Gate Inc. v. All-Star Grand Canyon Tours Inc., No. CV 12-8181, 2013 WL 12114580, *2 (D.
`Ariz. 2013) (“Because Arizona’s trademark infringement statute mirrors the Lanham Act, 15
`U.S.C. § 1125(a), cases interpreting the Lanham Act guide the interpretation of A.R.S. §
`44-1451.”)
`67. Here, the Court found that Jack Daniel’s asserted rights are senior and valid
`because they have appeared on the Principal Register of the United States Patent and
`Trademark Office since before VIP’s use began. (See Docs. 224-25); 15 U.S.C. §§ 1057(b),
`1115(a); see Brookfield, 174 F.3d at 1047. Furthermore, all the asserted rights are
`conclusively senior and valid pursuant to the provisions of 15 U.S.C. § 1065.
`68. At issue is whether VIP’s “Bad Spaniels” product caused a “likelihood of
`confusion” about the source of the product. Pursuant to AMF Inc. v. Sleekcraft Boats, 599
`F.2d 341, 348 (9th Cir. 1979), in the Ninth Circuit“likelihood of confusion” is assessed by
`weighing the following eight non-exclusive factors, often referred to as the Sleekcraft
`factors: the strength of the plaintiff’s mark; the proximity or relatedness of the goods; the
`similarity of the parties’ marks; evidence of actual confusion; marketing channels used; the
`type of goods and degree of care likely to be exercised by the buyer; the defendant’s intent
`in adopting the junior mark; and likelihood of expansion of the parties’ product lines. Id.
`69. “The Sleekcraft factors are intended as an adaptable proxy for consumer
`confusion, not a rote checklist.” Network Automation, Inc. v. Advanced Sys. Concepts, 638
`F.3d 1137, 1145 (9th Cir. 2011). “Some factors are much more important than others, and
`the relative importance of each individual factor will be case-specific.” Brookfield, 174 F.3d
`
`1 2 3 4 5 6 7 8 9
`
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`- 14 -
`
`

`

`Case 2:14-cv-02057-SMM Document 245 Filed 01/30/18 Page 15 of 24
`
`at 1054.
`70. In some cases, a small number of the factors carry great weight in assessing the
`likelihood of confusion. See Dreamwerks Prod. Group, Inc. v. SKG Studio, 142 F.3d 1127,
`1129 (9th Cir. 1998) (stating that “[t]he [Sleekcraft] factors should not be rigidly weighed;
`we do not count beans.”). “Rather, the factors are intended to guide the court in assessing the
`basic question of likelihood of confusion.” Id. (internal citation omitted).
`