Cases involving trademark parody are not new. Tommy Hilfiger sued over cologne for pets called "TIMMY HOLEDIGGER." Jordache sued a manufacturer of plus-sized jeans labeled "LARDASHE." Hormel brought suit against Jim Henson over a wild boar Muppet named "SPA'AM." Because they were decided prior to the Trademark Dilution Revision Act of 2006 (TDRA), courts resolved these disputes based primarily on trademark infringement and state anti-dilution statutes. The Fourth Circuit's decision in Louis Vuitton Malletier, S.A. v. Haute Diggity Dog, LLC, 507 F.3d 252 ("Louis Vuitton") is an important trademark parody decision because it provides an in-depth analysis of the law under both established trademark infringement principles and the Trademark Dilution Revision Act of 2006. Aside from being entertaining, the decision provides guidance for both would-be parodists and their targets.
Background of the Louis Vuitton Dispute
It is safe to say that most of us are familiar with the products of Louis Vuitton Malletier, S.A. (LVM), which include luggage, purses and accessories. The LOUIS VUITTON brand and its stylized LV monogram evoke in the mind of a consumer an image of quality and exclusivity. Around 2003, LVM hired a renowned Japanese artist, Takashi Murakami, to create a patterned design including its LV monogram interspersed among star, flower and cross shapes. Products with this pattern retailed from $995 to $4500. LVM spent millions advertising the new pattern and it became hugely popular. Many famous people were seen carrying the bags, and there was an extensive waiting list to purchase them.
Haute Diggity Dog, LLC is a company that sells pet toys and beds. Haute Diggity Dog makes a number of parody products including Chewnel No. 5, Jimmy Chew, Dog Perignonn, Sniffany & Co., and Dogior. The product which is the subject of the Louis Vuitton lawsuit is Haute Diggity Dog's parody pet toy called CHEWY VUITON. The product mimicked the shape, design and color of Louis Vuitton's Murakami handbags. Instead of LV, the toy's pattern included a stylized CV. The toy's pattern also employed a flower, cross and diamond pattern that resembled but was not identical to the Muakami pattern. Haute Diggity Dog generally sold the chew toy through pet stores for less than $20.00.
Upon hearing of this product, most people laugh. LVM was not amused. The company expressed its indignation in a lawsuit alleging trademark infringement, trademark dilution, counterfeiting, trade dress infringement, copyright infringement, and related common law violations.
Fourth Circuit's Legal Analysis
A. What is a trademark parody?
Turning now to the Fourth Circuit's decision, the first question was whether or not CHEWY VUITON was a trademark parody. Courts generally are in agreement about what constitutes a "parody." As reiterated in Louis Vuitton, a trademark parody is a simple form of entertainment conveyed by juxtaposing the irreverent representation of the trademark with the idealized image created by the mark's owner. It must convey two simultaneous and contradictory messages: that it is the original, but also that it is not the original and is instead a parody. This latter message not only differentiates the parody from the original but must also communicate some articulable element of satire, ridicule, joking or amusement.
The Fourth Circuit found Haute Diggity Dog's use of CHEWY VUITON and its associated pattern to be a parody. The CHEWY VUITON toy was found to be similar in its name, monogram, design and coloring, which clearly indicate that the toy is an imitation. The toy also was found to be different from the original handbags, for example, being a small and plush dog toy not an expensive, luxury handbag. The Court also noted that all of the design elements were different. (e.g., Chewy/Louis, Vuiton/Vuitton, CV/LV, simplified and crude pattern/detailed and distinguished pattern). Each of the elements Haute Diggity Dog selected to create the parody effect was close but not identical. If a trademark is found to be a parody, does that make a difference in the legal analysis?
B. Trademark Infringement
After finding that the CHEWY VUITON toy was a parody, the Court was quick to point out that being classified as a parody is not a defense to a claim of trademark infringement. In other words, it is not a free pass. The test for infringement is still whether or not the use creates a likelihood of confusion, but the finding of parody does affect the analysis. The Court then proceeded to consider each of the traditional likelihood of infringement factors and explained how those factors may be applied in a parody context.
The Court found that the strength of the LOUIS VUITTON mark was a factor that weighed in favor of Haute Diggity Dog. Normally, a strong mark favors the senior trademark owner, but, in the case of a parody, the fame of the mark allows consumers to perceive the target of the parody. Similarity of the marks also favored Haute Diggity Dog. As noted above, the parody was sufficiently blatant so as to invoke the famous trademark in the mind of consumers yet still distinguish the products. The similarity, or in this case dissimilarity, of the products also was in Haute Diggity Dog's favor as one product is a chew toy and the other is a designer purse. Interestingly, despite the fact that LVM currently makes dog collars, leashes and pet carriers, the Court found it unlikely that LVM would make dog toys in the future. With respect to similarity of facilities and advertising channels, the Court found it relevant that Haute Diggity Dog's products generally were sold at pet stores with other pet products, including other parody products, while LVM handbags generally are sold in Louis Vuitton boutiques or department stores and advertised in high-end fashion magazines. With respect to intent, the Court found that the product's status as a parody neutralized any bad faith by Haute Diggity Dog in marketing its products. Specifically, the Court found that although Haute Diggity Dog intended to profit from its use of its parodies that was not bad faith intent to create consumer confusion. Finally, the Court found no evidence of actual confusion.
C. Trademark Dilution Revision Act of 2006
Having found no trademark infringement, the Court turned to the issue of dilution. In Moseley v. V Secret Catalogue, Inc., 537 U.S. 418 (2003), the Supreme Court ruled that the federal trademark dilution statute as originally enacted required a trademark owner to show "actual dilution." Congress enacted the Trademark Dilution Revision Act of 2006 (TDRA) in response to the Supreme Court's decision. As amended, the statute changes the standard to one of "likelihood of dilution." Thus, the issue before the Court was whether or not Haute Diggity Dog's use of CHEWY VUITON was likely to impair the distinctiveness or harm the reputation of the LVM marks under the TDRA.
As with its trademark infringement analysis, the Court's dilution analysis began with the caution that parody is not automatically a complete defense to a claim of dilution. The TDRA includes a fair use exception that specifically recites parodies, but the exception only applies if the parody is not a designation of source for the persons own goods or services. 15 U.S.C. § 1125(c)(3)(A)(ii). Where the defendant uses the parody as its own designation of source, the exception does not apply.
The Court acknowledged that Haute Diggity Dog's conduct did not constitute fair use but went on to say that a court may still consider the existence of a parody in applying the TDRA's enumerated blurring factors. Those factors include: (1) the degree of similarity between the mark or trade name and the famous mark; (2) the degree of inherent or acquired distinctiveness of the famous mark; (3) the extent to which the owner of the famous mark is engaging in substantially exclusive use of the mark; (4) the degree of recognition of the famous mark; (5) whether the user of the mark or trade name intended to create an association with the famous mark; and (6) any actual association between the mark or trade name and the famous mark.
Because the product was a parody, the Court found that factors two, three and four clearly supported Haute Diggity Dog noting that an effective parody requires a famous trademark and that a successful parody might enhance the famous mark's distinctiveness. The Court found that remaining factors favored Haute Diggity Dog but cautioned that such might not be the case where the use is of the identical mark. This harks back to the Court's earlier discussion that a successful parody brings to mind the original but includes enough differences to distinguish itself from the original.
With respect to dilution by tarnishment, LVM argued that the use of CHEWY VUITON on dog toys harms the reputation of its trademarks because dogs might choke on the chew toys and a confused customer might blame LVM. The Court found that there was no evidence in the record to support such claims.
D. Counterfeiting
The denial of LVM's counterfeiting claims also was upheld on appeal because Haute Diggity Dog did not use a mark that was identical with or substantially indistinguishable from the LVM trademarks as required by the statute.
E. Copyright Infringement
In a brief paragraph, the Court also upheld the denial of LVM's copyright claim saying that, "Because LVM attempts to use a copyright claim to pursue what is at its core a trademark and trade dress infringement claim, application of the fair-use factors under the Copyright Act to these facts is awkward." The Court did review the lower court's findings and agreed that the parody use did not support a copyright infringement claim.
Adopting and Fighting Trademark Parody
In the Louis Vuitton case, the Court's endorsements and caveats provide valuable guidance for potential parodists. The same may be said for parody targets who are considering filing suit to stop the use of a trademark parody.
Does it pass the laugh test? If a client brings you a proposed trademark parody, this is one of the few times when it is acceptable to laugh at your client's proposal. If you don't laugh and no one else does either, be concerned. In order to be an effective parody, it must communicate the necessary element of satire, ridicule, joking or amusement.
Is the proposed trademark similar enough and different enough from the mark being parodied? Haute Diggity Dog escaped liability as a trademark parody, in part, because each and every element of its mark and design were similar but not identical to the Louis Vuitton marks and design. The devil is in the details especially where the proposed product mimics several protectable elements of the parody target.
Are the products associated with the proposed parody mark too close to those being offered by the parody target? This is a question that should be considered carefully. In Chewy Vuiton, the products were dissimilar and the Court found it unlikely that Louis Vuitton would bridge the gap and sell pet chew toys; however, courts are most diligent in guarding against a likelihood of confusion when the plaintiff and defendant use their marks on directly competing products. As noted in Tommy Hilfiger Licensing, Inc. v. Nature Labs, LLC, 221 F.Supp.2d 410, 418 (S.D.N.Y. 2002), "This is true both generally and in particular as to parodies. Thus, even where the use is humorous, courts have shown little tolerance where the mark is used on a competing product."
If proposing a trademark parody, is your client prepared to be sued? Despite the fact that it was ultimately successful, Haute Diggity Dog spent several hundred thousands of dollars defending itself, lost distributors, and had merchandise sent back as a result of the lawsuit. The client should also think carefully about who the plaintiff is going to be. By definition, the more well-known or famous a trademark, the more likely a parody will be effective. Does your client want to be on the other side of companies like Microsoft, Rolex, McDonald's, Coca-Cola, or Nike? Companies are getting more and more aggressive about protecting their trademark rights, both domestically and abroad. A potential suit filed by a well-funded, potentially aggressive plaintiff also may likely include numerous different causes of action.
For both parodists and their targets, have all potential claims been analyzed carefully? Chewy Vuiton included claims of trademark, trade dress, and copyright infringement, dilution, and counterfeiting, along with related state or common law causes of action. For a parody target, that is many avenues that enable courts to protect a valuable trademark. If a parody is found to violate one or more of these causes of action, strong remedies are available to the trademark owner. Although Chewy Vuiton shows that an effective parody can avoid liability for all of these causes of action, care should be taken in evaluating each and every one before a parody trademark is adopted. Specifically with respect to a dilution claim, Louis Vuitton represents the Fourth Circuit's interpretation of the TDRA with respect to parody claims. Other circuits may adopt a different interpretation. Future cases also may involve a more extensive analysis of the overlap or differences in protection under copyright and trademark law for parodies.
Is there protection available for a trademark parody? The U.S. Trademark Office recognizes that parody is not a defense to a likelihood of confusion refusal, but that "[t]here are confusing parodies and non-confusing parodies. A true parody actually decreases the likelihood of confusion because the effect of the parody is to create a distinction in the viewer's mind between the actual product and the joke. While a parody must call to mind the actual product to be successful, the same success also necessarily distinguishes the parody from the actual product." Manual of Trademark Examining Procedure § 1207.01(b)(x). A non-confusing parody, thus, may be registerable. As noted above, any client who adopts a parody mark should be advised of the risk of a lawsuit. The client also should expect that the target of the parody may oppose an attempt to register the parody. Haute Diggity Dog filed an application for federal registration for the CHEWY VUITON mark early in 2005. Shortly after publication, Louis Vuitton filed an opposition. Within a couple of weeks, Louis Vuitton also commenced its action in the Virginia district court. Parallel proceedings in federal or state court and at the Trademark Office should be considered by those who are the target of a parody and anticipated by those who adopt a trademark parody.
Conclusion
The Louis Vuitton case clearly represents a victory for effective trademark parodies in the Fourth Circuit. In the wake of this decision, however, the targets of trademark parodies still have the same options as before, which are appreciate the humor of the joke, bear it in silence, or sue.
Diane E. Burke
Huntington Center
41 South High St., Suite 2200
Columbus, Ohio 43215
Phone (614) 221-5100
Fax (614) 221-0952
diane.burke@steptoe-johnson.com
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