Update: The Ninth Circuit case Diece-Lisa Industry, Inc. v. Disney Store USA LLC, U.S., No. 22-347, may shed some light on the line between artistic expression and source identification. Originally, the Rogers test had cleared Disney’s use of the mark at issue, but the case has been remanded in light of Jack Daniel’s Inc. v. VIP Products LLC. The mark at issue is tied to a character in the “Toy Story 3” film and it is unclear if the court should consider the use of the character in merchandising an artistic expression entitled to Rogers protection or if the use should be considered a traditional trademark source indicator.

There is a historical tension between the First Amendment and intellectual property (“IP”) rights, as courts strike a balance between protecting the interests of the copyright or trademark holder and freedom of speech. The Supreme Court’s recent rulings in two IP cases offer some clarification on the line between intellectual property law and the First Amendment. Andy Warhol Foundation for Visual Arts v. Goldsmith (“Goldsmith”) focuses on copyright law, and Jack Daniel’s Properties v. VIP Products (“Jack Daniel’s”) focuses on trademark law. Both cases discuss fair use in their respective areas of law.

Parody v. Satire

Fair use is a broad defense against copyright and trademark infringement claims. However, under the fair use umbrella, parody and satire are narrower defenses available for infringers. In Campbell v. Acuff-Rose Music, Inc., 510 U. S. 569, 580–581 (1994), the Court explained that “[p]arody needs to mimic an original to make its point, and so has some claim to use the creation of its victim’s (or collective victims’) imagination, whereas satire can stand on its own two feet and so requires justification for the very act of borrowing.” Put another way, parody uses the original work or author of the work as the target of its commentary, and thus use of a protected property right is more likely to be determined justifiable. In contrast, satire uses a protected work to make an observation about the world and therefore offers a more limited defense. Critically, whether the work being infringed upon is protected by trademark or copyright also impacts the parody and satire analysis.

Parody and Satire in Copyright

Under copyright law, parody and satire are considered fair use because they “transform” the original work. The more transformative a use is in the new work, the less weight will be given to the other fair use factors. More specifically, in a copyright fair use analysis, “a use may be justified because copying is reasonably necessary to achieve the user’s new purpose.” Warhol at 19 (quoting Campbell, 510 U. S. at 580-81). 

“Parody… ‘needs to mimic an original to make its point…’” Id. For example, in Campbell, 2 Live Crew used certain musical elements and lyrics from Roy Orbison’s song “Pretty Woman.” In its initial analysis, the Court did not weigh the first factor of fair use in favor of 2 Live Crew despite the fact that 2 Live Crew changed the genre of the song and many lyrics. However, the Court found it necessary to also consider whether the song was a parody. 2 Live Crew’s song added new meanings to Orbison’s song, and the aspects of Orbison’s song that 2 Live Crew copied were considered necessary to make the parody recognizable to listeners. Even though both songs have commercial purposes, 2 Live Crew’s song has a “further purpose or different character…and the degree of difference must be balanced against the commercial nature of the use.” Warhol at 19-20. Thus, when a work is copied for the purposes of parody, a court is more likely to find that the first factor weighs in favor of fair use while still applying the full four-step analysis. 

On the other hand, satire faces a higher scrutiny under the fair use test. Unlike parody, satire is not making a commentary on the protected work itself, but is instead using a copyrighted work as a medium to make a commentary about the world. Thus, courts may put greater emphasis on the potential market harm and commercial v. noncommercial aspect in a satire analysis.

The Goldsmith Court likened the image at issue to satire that does not target an original work and found that the asserted commentary of the Andy Warhol Foundation (“AWF”) “can stand on its own two feet and so requires justification for the very act of borrowing.” Warhol at 35 (quoting Campbell, 510 U.S. at 581).

Moreover, because AWF’s commercial use of Goldsmith’s photograph to illustrate a magazine about Prince is so similar to the photograph’s typical use, a particularly compelling justification is needed. Yet AWF offers no independent justification, let alone a compelling one, for copying the photograph, other than to convey a new meaning or message. As explained, that alone is not enough for the first factor to favor fair use. Warhol at 35.

Parody and Satire in Trademark

The purpose of trademark law is to protect consumers from confusion about the source of a product or service, and hence courts undertake a likelihood-of-confusion analysis when determining if a parodying mark violates the Lanham Act. One essential element of successful parody in trademark is clearly conveying that use of the mark is necessary to make a comment on the brand rather than mimicking the trademark to confuse consumers. If a parodied mark is being used in the traditional trademark sense, then the mark should not be granted “special First Amendment protection.” Jack Daniel’s at 2. Furthermore, if the parodied mark is being used as a source identifier, it cannot benefit from the fair-use exclusion for parody. Id. at 20.

If the mark is being used in an expressive manner and not as a source identifier, courts must apply the threshold test enunciated in Rogers v. Grimaldi, 875 F.2d. 994 (2d. Cir. 1989), before doing a likelihood-of-confusion analysis. Courts have narrowly applied the Rogers test across circuits since 1989. When a mark is being used in an expressive manner, expression is protected free speech unless the court determines “(1) that the challenged use of a mark ‘has no artistic relevance to the underlying work’ or (2) that it ‘explicitly misleads as to the source or the content of the work.’” Jack Daniel’s at 8 (quoting Rogers at 999). Examples of trademarks being used in an expressive manner and not as a source identifier include the use of the Barbie name in the “Barbie Girl” song by Aqua in Mattel, Inc. v. MCA Records, Inc., 296 F. 3d. 894 (9th Cir. 2002) and a character’s use of Louis Vuitton luggage in the movie “The Hangover: Part II” in Louis Vuitton Mallatier S.A. v. Warner Brothers Entertainment Inc., 868 F. Supp. 2d 172 (S.D.N.Y 2012). In both of these cases, the court determined that the use of the registered mark was not identifying the source of the song or movie, i.e. consumers would not think that Mattel wrote “Barbie Girl” or Louis Vuitton produced “The Hangover: Part II.” 

Even if a mark is being used in an expressive manner such as parody, if the mark is also being used as a source identifier, the Rogers test does not apply. In Jack Daniel’s the Supreme Court clarified that even if a “mark has other expressive content – i.e., because it conveys some message on top of the source” a mark is not “automatically entitled to Rogers’ protection” because the goals of the Lanham Act to protect consumers from confusion outweigh First Amendment concerns of free expression. See Jack Daniel’s at 15. “When a mark is used as a mark (except, potentially, in rare situations), the likelihood-of-confusion inquiry does enough work to account for the interest in free expression.” Id. at 17. 

Although the Supreme Court found that the Rogers test was not applicable, the lower court may still find that the mark is a fair use under the likelihood-of-confusion analysis. A proper parody “is not often likely to create confusion” because registered trademark holders are not likely to use their marks in the critical way that parody does. See Id. at 18. It does not seem likely that consumers will believe that Jack Daniel’s is producing dog toys that ridicule their own brand.

Conclusion

While the decisions in Goldsmith and Jack Daniel’s were highly anticipated, ultimately both cases resulted in narrow rulings. Parody and satire analyses are extremely fact-specific, and it remains to be seen what impact these cases will have in future IP cases. Lutzker & Lutzker is available to advise copyright and trademark owners, as well as satirists and those wishing to create parodies, as to how to apply the case law guidance to the facts presented in their unique situations.