Pedestrian walks by the U.S. Supreme Court building in Washington
A pedestrian walks by the U.S. Supreme Court building in Washington, U.S. March 15, 2022. Reuters

The U.S. Supreme Court on Wednesday is set to hear a trademark clash between Jack Daniel's and a dog accessory company behind a parody chew toy resembling the distiller's widely recognized black-label whiskey bottle.

The dispute pits the whiskey brand's trademark rights against legal protections for creative expression - in this case a send-up by Phoenix-based VIP Products LLC of Jack Daniel's Old No. 7 Tennessee whiskey bottle featuring dog poop-themed changes like a label reading "the Old No. 2, on your Tennessee Carpet."

Jack Daniel's Properties Inc, owned by Louisville, Kentucky-based Brown-Forman Corp, is appealing a lower court's ruling that the pun-laden "Bad Spaniels" vinyl chew toy qualifies as an "expressive work" protected by the U.S. Constitution's First Amendment.

At issue is whether VIP Products should be shielded from liability for alleged harms its chew toy poses to Jack Daniel's by potentially misleading customers into associating the product with the whiskey maker or tarnishing the company's famous trademark.

Industry groups backing the Lynchburg, Tennessee-based whiskey brand, established in 1866, have said the dispute holds enormous stakes for corporate America's ability to safeguard its brands and reputations.

"This case is no laughing matter," said Courtney Armour, chief legal officer at the industry group Distilled Spirits Council. "While the case involves dog toys, even allegedly 'humorous' knock-offs can confuse consumers as to what messaging and products well-known alcohol beverage brands endorse."

A 2,300-strong group of authors took the opposite view, saying a win for Jack Daniel's could lead to a "catastrophic chilling effect" over worries that creative expression might spark litigation.

"If the threat of legal sanction hangs over the heads of writers, their literary characters may no longer use iPhones, eat at McDonald's or visit Disneyland," the group wrote in a brief to the justices.

The San Francisco-based 9th U.S. Circuit Court of Appeals in 2020 ruled in favor of VIP Products on two separate grounds. The 9th Circuit said the Bad Spaniels toy was an "expressive work" and thus potentially shielded under the First Amendment from Jack Daniel's trademark infringement claim.

On this point, the 9th Circuit returned the case for further proceedings to a federal judge in Arizona with instructions to apply a legal test stemming from a landmark 1989 trademark dispute between actress Ginger Rogers and film director Federico Fellini. The judge ruled for VIP Products after applying the so-called "Rogers test," which lets artists lawfully use another's trademark when doing so has artistic relevance to their work and would not explicitly mislead consumers about its source.

The 9th Circuit also ruled that VIP Product's use of the Jack Daniel's trademark was noncommercial because it was used not only to sell dog toys but also "to convey a humorous message," and thus had not tarnished the distiller's distinctive mark.

President Joe Biden's administration supports Jack Daniel's appeal.

A ruling is expected by the end of June.