The Briefing by Weintraub Tobin

In this installment of The Briefing, Scott Hervey & Jessica Corpuz cover the landmark defamation case Copeland v. Netflix—dissecting the high bar for public figures to prove defamation and the critical concept of “actual malice.” From the Surviving R. Kelly documentary to First Amendment protections, they unpack the legal complexities surrounding public figures and media reporting.

Watch this episode on the Weintraub YouTube channel here.

Scott: Surviving R. Kelly was a Netflix documentary series that delved into the extensive allegations of sexual abuse, misconduct, and predatory behavior leveled against the R&B singer R. Kelly. Diana Copeland, Kelly’s former personal assistant, claims she was falsely portrayed in the documentary as being essentially a co-conspirator in Kelly’s alleged sex crimes. Copeland sued Netflix and the producers of the documentary, Lifetime and A&E for defamation. There was a recent decision in Copeland versus Netflix, one that emphasized the stringent First Amendment protections for media when reporting on a public figure. How high is the bar for a public figure to prove defamation against the media outlet? And what does the legal concept of actual malice truly entail in such case? I’m Scott Herbie, a partner with the law firm of Weintraub Tobin, and I’m joined today by my partner, Jessica Corpus. Stay tuned as we dissect this significant decision and its implications for producers of programming of this type on this installment of the briefing. Jessica, welcome back. It’s good to have you.

Jessica: Thanks so much for having me, Scott.

Scott: This one, I think, is going to be quite interesting. I always like defamation cases because there’s always a lot to unpack.

Jessica: Oh, they’re very exciting cases. We get this question a lot, and having to educate people about the standard of defamation happens all the time in our world, so it’s good to talk about it.

Scott: Yeah, and more and more, you’re seeing defamation claims come out of not just documentaries, but scripted, essentially, fictional docudramas. But today, we’re looking at the R. Kelly documentary. And this is the recent decision in Diana Copeland versus Netflix. And it comes out of the United States district Court for the district of Delaware. That’s a district we don’t hear from very often, but we’re hearing from them today.

Jessica: So this decision comes as a result of Netflix’s motion to dismiss. A motion to dismiss in federal court is called a Rule 12(b)(6) motion, and it’s where a defendant moves to dismiss the complaint because the plaintiff has failed to state a claim upon which relief can be granted. In other words, the defendant is arguing that even if everything that the plaintiff claims is true, those claims still don’t provide a legal basis for the court to grant them any relief.

Scott: Well said. So this case centers on a lawsuit brought by Diana Copeland, who was the personal assistant for the singer R. Kelly. Following R. Kelly’s arrest and charges relating to sexual abuse, Lifetime Entertainment produced a documentary series called Surviving R. Kelly. Copeland did not participate in the documentary. However, she alleges that an episode contained several false and defamatory statements about her, portraying her as a co-conspirator in Kelly’s crimes. She subsequently sued Netflix, which distributed the series, along with its producers Lifetime and A&E, for defamation.

Jessica: Those defendants moved to dismiss Copeland’s claims. Netflix based its motion on the following arguments. First, that the fair report privilege protects the statements. Second, that the statements are non-actionable opinions based on disclosed facts. And three, that Copeland is a public figure and that she failed to plea that defendants published the statements with actual malice.

Scott: That’s right. Now, the court said it didn’t need to address the first two arguments advanced by Netflix because Copeland failed to meet the actual malice standard.

Jessica: So just a little bit of history here behind the actual malice standard might be good.

Scott: Yeah. No, I agree. Why don’t you go for it?

Jessica: So the actual malice standard in defamation law originates from the landmark Supreme Court case of New York Times versus Sullivan. That case established that the First Amendment protects even defamatory speech against public figures, as long as the speech was not made with, quote, actual malice. To establish actual malice, a plaintiff must show that a defendant either knew that the statements were false or acted with reckless disregard for whether or not they were true. This standard provides a significant shield for publishers when reporting on public figures involved in matters of public controversy.

Scott: Right. And in cases like this, cases where the claim is based on the portrayal of an individual in a documentary or a docudrama, we have seen the court focus on whether the producers deliberately portrayed the plaintiff in the hopes of insinuating a defamatory import to the viewer or whether the producers knew or acted in reckless disregard as to whether the portrayal would be interpreted by the average viewer as a defamatory statement of fact.

Jessica: Now, this requirement of establishing actual malice only applies to defamatory statements against public figures. Here, Copeland was Kelly’s personal assistant, hardly a position that one generally considers to be a public figure. So let’s talk a little bit about how and why the court found Copeland to be a public figure in this case.

Scott: Sure. So for the purposes of establishing actual malice, there are essentially two types of public figures. The first one is the general purpose public figure, an actor, a movie star, a well-known politician, someone that has achieved widespread fame or notoriety, meaning that their name and actions are matters of legitimate public interest wherever they go and whatever they do. The other is a limited purpose public figure, and that’s someone who voluntarily thrust themselves into the vortex of an existing public controversy or engages the public’s attention in an attempt to influence its outcome.

Jessica: In order to determine whether someone is a limited purpose public figure, courts usually ask whether the alleged defamation involves a public controversy, and if so, how involved the plaintiff is in that controversy.

Scott: Right. So here the court determined that Copeland was a limited purpose public figure. To reach that conclusion, the court applied that to test whether the alleged defamation involves a public controversy, and if so, how involved was the plaintiff in that controversy? So the court found that the allegations against Art Kelly involved sex crimes and child abuse, and those were undoubtedly a public controversy.

Jessica: Yeah, that seems very clear in this case, given the serious nature of those charges and the extensive public attention.

Scott: Right. And then the court examined Copeland’s involvement. Despite initially declining to participate in the surviving R. Kelly documentary, she later gave a brief interview on Good Morning, America about her experiences with R. Kelly. In this interview, she discussed making travel arrangements for R. Kelly’s girlfriend and her observations about their behavior. The court reasoned that by voluntarily going on national television to discuss R. Kelly, Copeland voluntarily injected herself into the public discourse surrounding this controversy and invited public attention, comment, and criticism.

Jessica: So in other words, her own decision to speak publicly on the matter played a key role in the court’s determination that she was a public figure for the limited purpose of this controversy.

Scott: Precisely right. Once the court classified Copeland as a limited purpose public figure, the legal standard required her to plausibly plea that the defendants acted with actual malice. This means she had to demonstrate that Netflix either knew the statements in the documentary were false or acted with reckless disregard as to whether they were true or false.

Jessica: So the court here provides some good guidance on how to make allegations of actual malice. The court says that actual malice focuses on the publisher’s mental state. While a plaintiff can sufficiently plea actual malice through using circumstantial evidence, it must be enough for the court to draw the reasonable inference that each of the defendants knew the actionable statements were false or that they had acted with reckless disregard as to whether or not they were true.

Scott: That’s right. And the court found that Copeland failed to plausibly plea actual malice. While Copeland alleged that the defendants were reckless, deliberate, and malicious, and that they had access to the truth, yet chose to ignore it, the court considered these allegations to be conclusory and unsupported by sufficient factual detail.

Jessica: Copeland did include some specific factual allegations in her complaint. She argued that producing had a bad motive or vendetta against her because she chose to do Good Morning America instead of their documentary. She also alleged that the producers asked two former Kelly employees, who allegedly had personal vendettas against Copeland, to appear on the documentary and that the producers encouraged other former Kelly employees to say negative things about Copeland.

Scott: Right. And as to this, the court said that at most this just suggests a bad motive or ill will, but that’s not equivalent to actual malice. The focus of actual malice is the publisher’s state of mind regarding the truth of the statements, not their feelings toward the plaintiff, whether ill or positive.

Jessica: Yeah, this is a really important distinction. Even if the defendants harbored negative feelings towards Copeland, that wouldn’t satisfy the actual malice standard if they believe the statements that they published were true.

Scott: Right, right. The court further noted that Copeland provided no basis to infer that the defendants seriously doubted the veracity of their sources or the accuracy of the information presented in the documentary. She didn’t allege that the defendants knew their sources were unreliable or had any specific reason to distrust them.

Jessica: You know, it seems like the court is emphasizing significant protection the First Amendment affords to publishers when reporting on public figures involved in public controversies, and therefore requiring a really high bar to prove defamation.

Scott: Absolutely. So here the Court explicitly stated that the First Amendment shield publishers from lawsuits when they report inaccurately about public figures involved in public controversies, as long as they do so without actual malice. Now, some claim and argue that this protection aims to ensure a robust and open discussion of matters of public concern. Others believe that New York Times versus Sullivan is a bad case, and the requirement of establishing actual malice basically leads to poor reporting and a lack of follow-through on the part of reporters.

Jessica: Yeah, I absolutely agree. Here in this case, because Copeland did not plausibly please to actual malice, the court dismissed her defamation claim and her other related tort claims that relied on the same allegations, such as false light, invasion of privacy, and intentional and negligent inflection of emotional distress. The court also dismissed her claim for appropriation of her name and likeness. However, the complaint was dismissed without prejudice, meaning that Copeland has the option to refile her complaint if she can present more substantial factual allegations to support her claims.

Scott: Right. That’s a key point for Copeland. While this round didn’t go her the court has left open the possibility of a renewed legal effort with more concrete evidence.

Jessica: Absolutely. So what are the crucial takeaways from Copeland v. Netflix for our listeners?

Scott: Well, this case really highlights the heavy lift for public figures to win a defamation lawsuit against media entities. The actual malice standards has a very high legal threshold. Plaintiffs must demonstrate that the publisher had actual knowledge of the falsity or had a reckless disregard for the truth. Simple negligence or even ill will just won’t work.

Jessica: And the determination of public figure status is very fact-dependent. Voluntarily engaging in public discourse on a matter of public controversy can lead to being classified as a limited purpose public figure, even if that public engagement is limited.

Scott: Right. And finally, this case underscores the necessity for plaintiffs and defamation cases involving public figures to plea specific factual allegations of actual malice, rather than just stating legal conclusions. A plaintiff needs to provide details that suggests that the publisher had serious doubts about the truth of what they were publishing. This case serves as a reminder of the robust protections for free speech, or at least the high pleading requirements required, particularly when it comes to reporting on individuals involved in matters of public interest.

Jessica: It’s going to be really interesting to see if Copeland will file an admitted complaint here.

Scott: Yeah, it will be. We’ll keep an eye on this case and certainly report back. Jessica, thanks for joining me today.

Jessica: Thanks for having me.

Scott: Well, that’s all for today’s episode of The Briefing. Thanks to Jessica for joining me today. And thank you, the listener or viewer, for tuning in. We hope you found this episode informative and enjoyable. If you did, please remember to subscribe, leave us a review, and share this episode with your friends and colleagues. And if you have any questions about the topics we cover today, please leave us a comment.

A petition is calling for the Supreme Court to decide on the validity of the “discovery rule,” which allows copyright claims long after the alleged infringement. NBA teams like the Indiana Pacers and Denver Nuggets are even weighing in, worried that social media posts from years ago could be used as grounds for lawsuits. Scott Hervey and Tara Sattler dive into this game-changing copyright case in this installment of The Briefing.

Watch this episode on the Weintraub YouTube channel.

On the latest episode of The Briefing, Weintraub attorneys Scott Hervey and Jessica Corpuz break down the court’s decision in Pepperdine’s trademark fight with Netflix over the name “Waves” in the new series Running Point. Tune in for insights on this case and how the Jack Daniel’s ruling is reshaping trademark law in entertainment.

Watch this episode on the Weintraub YouTube channel.

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Did you know the popular Stanley Travel Cup is tied to Stanley Black & Decker? A lawsuit is brewing over trademark rights and branding disputes. Is PMI overstepping, or is Stanley Black & Decker overreaching?  Weintraub Tobin attorneys Scott Hervey and Tara Sattler discuss the legal battle over the iconic cup on this episode of The Briefing.

Watch this episode on the Weintraub YouTube channel here.

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Major AI copyright ruling – The Delaware District Court’s decision in Thomson Reuters v. Ross AI could have huge implications for AI training and copyright law. On this episode of The Briefing, Weintraub attorneys Scott Hervey and Andy Tan break down the case, its impact on the AI industry, and what it means for content creators.

Watch this episode on the Weintraub YouTube channel here.

Scott:

Andy:

Thanks, Scott. It’s an honor to be part of it. I’ve been a long-time fan and watcher, so it’s great to be on now.

Well, we’re glad to have you. This case is right up your alley. You do a lot of deals in the AI space, so I thought this one would be appropriate for you to do with me.

Yeah, it’s definitely coming up, and AI is the hot topic in the legal world for the foreseeable future, I think.

Yeah, that’s for sure. Well, let’s start. Why don’t we start with the facts of the case because this case, it’s got some interesting twist and turns. Andy, can you take us through the basic facts of the case?

Yeah, I would be happy to. I’ll run through the basic facts of the case. If you want a more in-depth discussion, you should check out the November 9, 2023, episode of The Briefing, where Scott and our colleague Tara go over it in detail. I’ll just go over the facts Again. But so, who are the players? Reuters owns West Law. It’s one of the primary legal research tools. Ross was a legal research AI startup. I say was because Ross AI closed down as an operating company in 2020. They said it was due to the Thompson Reuters lawsuit, but its insurance coverage probably allowed it to continue to defend the Thompson Reuters lawsuit, so we’re not sure that’s the reason. Ross hired a subcontractor to create memos memos with legal questions and answers. Now, these questions were meant to be those that a lawyer would ask, and the answers were direct quotations from legal opinions. They used these memos to train Ross’s AI legal research tool so that when a user asks a legal question, Ross’s tool responds with relevant judicial opinions, which Reuters is saying is similar to Westlaw’s headnotes. Reuters, the provider of the Westlaw Service, contended that these questions were essentially Westlaw case notes, and the court found, as a matter of law, that Ross copied portions of the Westlaw headnotes.

Ross challenged Reuters’ copyright in the headnotes and raised a fair use defense.

That’s right. This case is particularly interesting because it features something rare in federal courts: a judge reversing his own prior summary judgment ruling. Let’s start with the procedural history because that It’s unique. This case, as you said, began in 2020 when Thompson Reuters sued Ross in Delaware district Court. In 2023, Judge Bibas issued a summary judgment opinion that largely denied Thompson Reuters’ motions on copyright infringement and fair use. But then something unusual happened. As the case was heading towards trial that was scheduled for August 2024, Judge Bibas took a closer look at the materials and had what you might say is a judicial epiphany. The judge continued the trial date and invited the parties to renew their summary judgment briefings.

That’s pretty remarkable. From what we’ve seen, it’s rare for a judge to admit that they might have gotten something wrong.

That’s right. But if a judge is going to make a mistake or have second thoughts about something, there’s no better topic than the evolving world of AI. The judge actually said, A smart man knows when he’s right, and a wise man knows when he’s wrong. Wisdom does not always find me, so I try to embrace it when it does, even if it comes late as it did here. That’s pretty self-deprecating and funny for this judge. The judge does a complete reversal, and let’s dig into the legal analysis. First, there was the question of copyright validity. As part of the court’s original decision, the court initially said that it was going to leave this to the jury to determine whether Westlaw’s headnotes and its key number system had enough originality to be protected by copyright. Initially, Judge Bibas thought that originality depended on how much the headnotes overlap with the underlying court opinions. Now, this analysis was relevant because in doing an infringement analysis, you need to separate the non-protectable elements from what is protectable, and then you analyze the protectable elements and their similarities. In the recent opinion, the judge said he didn’t think this was the right approach.

The key insight was that even if a head note quotes from an opinion verbatim, the very act of selecting which portion to excerpt involves creative judgment. The judge drew from the Seminal Supreme Court case of Feist. That’s the telephone bookcase that we all learn about in law school, which held that factual compilations are original works of authorship, protectable under copyright if the compiled makes choices as to selection and arrangement using just a minimal degree of creativity. Based on that, the court found that the notes and key number system were original enough to be protected by copyright.

That’s right. As for the infringement aspect, the court handled that quickly. They noted that while they slogged through all the headnotes and determined that out of 2,830 headnotes, the court granted summary judgment findings of actual copying of 2,243 of the headnotes. They made this determination only where copying was so obvious that they said no reasonable jury could find otherwise.

That’s right. The court found infringement even after acknowledging that West law had a higher burden of similarities to meet due to the fact that the headnotes contained less protectable expression.

Let’s talk about fair use because this is the part that could have huge implications on other AI infringement cases. Let’s break down the four fair use factors. For factor one, the purpose and character of use, the court found Ross’s use was commercial and not transformative, even though the headnotes didn’t appear in the final product.

Right. Let’s dig into the court’s finding that Ross’s use was not transformative because, essentially, this was the basis on which the court found fair use in 2023 based on transformative intermediate copying. Ross argued that its copying of the headnotes is part of a building of a search engine that avoids human intermediated materials. Ross said that its AI studied the headnotes and opinion quotes only to find language patterns that would allow Ross to develop a search tool that would produce highly relevant quotations from judicial opinions in response to natural language questions and not to replicate Westlaw’s expression.

The court’s 2023 finding relied heavily on cases like Google v. Oracle and Sony v. Connectix. In those cases, the court found that copying computer code as an intermediate step was fair use. But now, Judge Bibas found those cases inapplicable for two reasons.

Right. That’s right, Andy. First, the judge said that those cases dealt specifically with computer code, which courts tend to treat differently from other copyrighted works because of its functional nature. Second, in those cases, the copying was necessary to innovate and achieve interoperability. You had to copy the code to make the programs work together. The court found that this wasn’t true here. The court said that Ross didn’t need to copy Westlaw’s headnotes to create a legal research tool. Ross could have created their own summaries of court opinions. The court said that Ross’s use was not transformative because it didn’t have a further purpose or different character from Thompson Reuters’ use. Further, the court said that the intermediate copying case the computer cases, were not applicable here. In those cases, the underlying unprotectable ideas of the computer code could only be reached by copying their expression. The court found that that just That was not the case here. The court found that the copying done by Ross was not reasonably necessary to achieve a new purpose.

If there’s no transformative use, the next two fair use factors are the nature of the copyrighted work and the amount used, and both of those factors favored Ross. However, the fourth factor, the potential market effect of Ross’s use, could have on the value of original work, seemed to primary factor for this court, they found that Ross’s product would compete directly with West law in the legal research market. Plus, Ross competes with a potential market for AI training data that Reuters might want to develop.

Right. I mean, we saw market harm playing a much bigger role than we had seen before in the Supreme Court’s decision in the Warhol case. I think normally, in the past, when doing a fair use analysis, we didn’t really focus so much on market harm, but I think going forward, in light of this case and also just in light of the Supreme Court’s decision in Warhol, market harm is going to play a much bigger role. All right, so let’s talk about the big question: How might this case impact the other pending AI copyright infringement training cases? So, Judge Bibas specifically limited his ruling to non-generative AI. He went out of his way to say that this case is not about generative AI. But several aspects of his analysis could be highly relevant to cases involving generative AI, like the New York Times case or the ongoing cases against Anthropic and Metta.

Right. While the judge did seem to want to limit the applicability of this case, it could still have implications for other pending cases.

That’s right. First, there’s the court’s analysis of the intermediate copying. The judge rejected Ross’s argument that using copyrighted material as training data should be protected because the material doesn’t appear in the final product. This analysis is crucial because many generative AI companies make the same argument that their models transform the training data so completely that the original works aren’t recognizable in the output. The judge’s analysis in this case could find its way as persuasive authority in the pending generative AI cases.

Judge Bibas focused on whether the copying was necessary to achieve the defendants’ goals, drawing from cases like Google v. Oracle. He found that unlike in Google, where copying was technologically necessary for interoperability, here, Ross could have created its own legal summaries instead of using West call us headnotes.

Right. This could be problematic for generative AI companies in the pending lawsuits involving generative AI companies because they really theoretically could have created their own training data or they could have licensed training data. The fact that it would have been more expensive or time consuming is not a legal justification for copying.

The market harm analysis could be potentially influential in other cases, though, to your point. The court here found that even though Ross’s final product was different from West Law’s, they were still competing in the same market, which is legal research. For example, in the New York Times case, the publishers might argue that even though ChatGPT produces different outputs than newspaper articles, it still competes in the market for information and news.

Right. However, there are some important distinctions. Generative AI creates new content while Ross really just help users find existing court opinions. That might affect both the transformative use in the market harm analysis.

It sounds like our conclusion is Judge Bibas explicitly limited his ruling to non-generative AI, but his analytical framework could significantly influence how courts approach generative AI cases.

Exactly. I think it will. The specific might be different, but the fundamental questions about fair use, transformative purpose, and market impact are going to be similar.

Yeah, it’ll be fascinating to see how other courts handle these same issues. Will they adopt, judge, Bibas ‘s focus on necessity and market competition, or will they create new frameworks specifically for generative AI?

Right. Let’s discuss the broader implications of this case, assuming that the framework Judge Bibas sets up is adopted by the other courts hearing the training data infringement cases. Let’s consider how this case could impact the market and both AI companies and content creators.

Yeah, for the AI companies, it probably means more licensing. It could also invest in the creation of original training data. Either way, this could mean potential increases in the cost of data trading.

I agree. But I think a clean data set is going to be necessary if AI companies want to secure enterprises licensed licenses or licenses with companies and not just consumer-facing products. No company is going to enter into a license with an AI company that doesn’t, at a minimum, provide indemnity from infringement claims.

Also, as a result, you could see AI companies either shifting into models where the focus is broad and more on public domain content or have a more narrow focus in terms of function. Personally, I think the more narrow focus is going to result in a focus on business partnerships rather than general consumer applications.

I agree. In software licensing, the money is in business licenses, as we know. This could also be extremely beneficial to the content industry. The content industry has been dying a slow, painful death, and this actually could be a turnaround. You could see new opportunities to create AI training-specific content. Those opportunities do already exist. I already know of a couple of companies in this space that are AI training content brokers, matching content producers with AI companies that need specific types of video content to train AI. But it’s not as big or as mainstream as it could be. There can be a real marketplace for custom data set creation and cleaned annotated data collection. A training data as a service model is what I see can be possible.

Yeah, in this case could be the leverage that major content owners have been looking for. Then the larger the content owner’s library, the greater that potential leverage.

Interestingly, this could start the rise of content cartels or content collectives, or maybe more M&A in the content space being driven by either traditional content companies with the focus of greater leverage in content licensing. You could also see acquisition and vertical integration of large content companies by AI companies, and giving them some type of exclusivity in a particular content space.

Definitely. The business and legal ramifications of what we’ve been talking about are probably going to reshape how all of society thinks of data ownership and copyright.

Right. Maybe this could be the lifeline for traditional media as we know it today. Who knows? Because one thing that we don’t really think a lot about is the need for training AI, it’s not static, it’s constant. It constantly needs to be updated. This might result in a continuous revenue flow for traditional media content creators like news that they just haven’t seen for quite some time.

Definitely agree.

Andy, thanks for joining me today. I hope you enjoyed it, and we look forward to having you on in the future.

Absolutely. Thanks a lot, Scott.

Scott:

In the case of Sydney Nicole vs. Alyssa Sheil, a federal district judge ruled that certain vibes and aesthetics can be protected under copyright law. Weintraub attorneys Scott Hervey and Tara Sattler break down this decision and what it means for content creators and brands in the digital age on this episode of The Briefing.

Watch this episode on the Weintraub YouTube channel here.

Scott:

Given the adoption of the Magistrate Judges recommendations, we are going to discuss the potential implications of this case, Sydney Nicole versus Alyssa Sheil, on the creator marketing industry on this installment of the briefing. Tara, welcome back to the briefing.

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On this episode of The Briefing, Scott Hervey and Tara Sattler dive into the landmark Jack Daniels v. VIP Products case that changed trademark law. They break down the Supreme Court’s ruling on trademark infringement vs. dilution and explore how a dog toy parody nearly tarnished Jack Daniels’ brand.

Watch this episode on the Weintraub YouTube channel.

Scott: VIP products versus Jack Daniels’ properties brought a landmark Supreme Court case that forever changed the application of the Rogers Test. However, cross-motions for summary judgment at the District Court following the Supreme Court have provided some degree of closure and finality on the trademark and dilution claims raised by Jack Daniels.

I’m Scott Hervey, a partner with the law firm of Weintraub Tobin, and today I’m joined by my partner, Tara Sattler. We’re going to talk about a dog toy, a bottle of whiskey, and the Sometimes-murky waters of Trademark Law on this installment of The Briefing.

Tara, welcome back to the briefing. It’s good to have you back.

Tara: Thanks, as always, Scott.

Scott: We’ve talked about this Jack Daniels case as it has affected other cases I think, boy, almost ad nauseam. But there has finally been a resolution itself of the Jack Daniels case. Let me just give a little brief history of the background, and then you can recap the Supreme Court’s decision. This legal battle began all the way back in 2014, so over 10 years ago, when VIP Products, a company that makes dog toys, filed a declaratory relief lawsuit against Jack Daniels, seeking a declaration that their Bad Spaniels dog toy did not infringe on Jack Daniels’ trademarks. The Bad Spaniels toy was designed to mimic a bottle of Jack Daniels’ Black Label Whisky. Jack Daniels counterclaimed, alleging both trademark infringement and trademark dilution. The case has gone through multiple appeals, including a trip to the Supreme Court. Court. The Supreme Court ultimately vacated the Ninth Circuit’s decision and remanded that case back to the District Court.

From there, let’s quickly recap the Supreme Court decision. On June 8, 2023, the Supreme Court decided this case. At the district Court and on appeal to the Ninth Circuit, the issue was framed as whether the dog toy was an expressive work since trademark claims involving expressive works were analyzed under the Rogers test.

Tara: Right. But on appeal, the Supreme Court said that the issue was not whether the dog toy was an expressive work, but rather the nature of the use of the Jack Daniels mark.

Scott: Right. The Supreme Court found that the IP’s use of the marks, while humorous, was for the purpose of serving as a source identifier, a trademark use, in other words. The Supreme Court held that the Rogers test does not apply to instances where the mark is used as a source identifier, regardless of whether it’s also used to perform some expressive function.

Tara: And then from there, the case was eventually remanded to the district Court to determine Jack Daniels’ Lanham Act claims for dilution and infringement.

Scott: Before we get into the dilution part, let’s briefly touch on trademark infringement. To win on this claim, Jack Daniels needed to show that its trademarks were distinctive and nonfunctional and that there was a likelihood of consumer confusion. The court had previously ruled that Jack Daniels’ trademarks were distinctive and nonfunctional. The key issue was whether VIP’s Bad Spaniels toy would cause a likelihood of confusion about the source of the product. The Or ultimately found that while Bad Spaniels as a toy did evoke the Jack Daniels brand, it was a successful parody.

Tara: That’s right. A successful parody of a famous mark, one that conjures up the original yet creates contrasts from the original so that the message of ridicule or pointed humor becomes clear, is not often likely to create confusion.

Scott: All right. The court waved several factors and determined that due to the parotic nature of the toy, consumers were unlikely to be confused about its source. Therefore, the court found that VIP was not liable for trademark infringement.

Tara: Right. That’s score one for the dog toy. But now let’s get into the, I think, more interesting part of the case, the trademark dilution claim. This is where the court found VIP liable. Trademark dilution is different from infringement. Trademark dilution is about protecting the distinctiveness and selling power of a famous mark, even if there’s no confusion about the source of the infringing product. The Trademark Dilution Revision Act, or TD as it’s called by trademark lawyers, defines dilution as the, quote, whittling away of the value of a trademark when it’s used to identify different products. It prohibits the use of a mark that is likely to cause dilution, either by blurring or by tarnishment. In this case, Jack Daniels argued that the Bad Spaniels toy diluted their trademark by tarnishment.

Scott: To prove dilution by tarnishment, Jack Daniels had to prove three things. First, Fame, that its trademarks were famous before VIP’s use of the Bad Spaniels toy began. Second, Similarity there was a similarity between the Bad Spaniels toy and Jack Daniels trademarks. And third, reputational harm. That the Bad Spaniels toy was likely to harm the reputation of the Jack Daniels trademarks.

Tara: Let’s look at each of these in detail. I’ll start with Fame. I think that was an easy one for the court. The court found that Jack Daniels trademarks were famous, and they are famous, noting the brand’s century-long history, excessive advertising, and massive sales. Vip argued that the old number seven trademark, specifically, was not famous enough, but the court rejected this, stating that it was the overall use of Jack Daniels’ marks in a tarnishing way that mattered. The court emphasized that it was VIP’s use of Jack Daniels’ marks on the dog toy and not the bad spaniel’s name in isolation that caused the tarnishment.

Scott: Okay, so turning to the second factor, similarity. The court found that VIP intentionally designed the Bad Spaniels toy to mimic Jack Daniels’ trademarks and trade dress, including the shape of the bottle, color scheme, and font. The IP replaced Jack Daniels with Bad Spaniels Old Number Seven with Old Number Two, and also Tennessee Whisky with Tennessee Carpet, while retaining other designer elements. The court determined that this was enough to show a similarity.

Tara: As to the third element, reputational harm, the court noted that such harm, the harm to the reputation of the famous Mark, mark arising from the similarity between the famous mark and the junior mark. The court noted that this harm generally arises when the plaintiff’s trademark is linked to products of shoddy quality or where it’s portrayed in an unwholesome or unsavory context, likely to evoke unflattering thoughts about the owner’s products. Jack Daniels argued that the Bad Spaniels toy tarnished their trademark by associating the brand with dog poop. Vips’ toys included phrases like 43% poop by volume and 100% smelly and replaced Old Number 7 with old number two on your Tennessee carpet. To support their argument, I mean, that all just seems funny to me, but to support their argument, Jack Daniels brought in an expert who testified about the negative associations that the Bad Spaniel’s toy was likely to create with Jack Daniel’s whiskey, particularly because the product is intended for human consumption. The court gave prevailing weight to the expert’s testimony, concluding that the toy was likely to tarnish Jack Daniel’s reputation by creating a negative association with dog poop, essentially.

Scott: From there, VIP argued that there was no actual evidence of reputational harm and that their dog toy was not as offensive as other products that have been found to cause tarnishment. But the court disagreed. Importantly, the court emphasized that the TDRA only requires a likelihood of dilution, not actual harm. The court also dismissed VIP’s argument that the old number seven mark itself was not famous enough, stating that the tarnishment arose from the use of the overall Jack Daniels marks on a product associated with dog poop.

Tara: So VIP also raised a First Amendment challenge to the Lanamack’s prohibition on trademark dilution, arguing that it amounted to unconstitutional viewpoint discrimination.

Scott: Let’s remember that under the TDRA, the law provides an explicit exemption for certain uses of a famous trademark, including parity if the use is non-commercial or involves fair use in news reporting, commentary, or criticism. Obviously, this is commercial speech, so it’s not entitled to the statutory exemption.

Tara: Right. The court declined to consider the First Amendment challenge because VIP failed to raise it in their pleadings. This procedural point is important. The court found that because VIP did not formally include this argument in its initial court filings, it was not properly before the court at the time that the court decided the parties’ cross-motions for summary judgment.

Scott: In the end, the court ruled that while the Bad Spaniels toy was a successful parody that did not infringe on Jack Daniel’s trademarks, it did, however, dilute Jack Daniels’ trademarks through tarnishment.

Tara: Right. The court found that the use of Jack Daniels’ trademarks on a dog toy that referenced dog poop was likely to harm the reputation of Jack Daniels’ brand. Now, Now, the court’s dilution finding here, I think, is almost opposite to what the Fourth Circuit found in a 2007 case, Louis Vuitton versus Hot Diggity Dog. In that case, Louis Vuitton, the luxury fashion house, sued Hot Diggity Dog, a company that manufactured and sold a line of parody dog toys called, Ready? Chooi Vuitton. These toys, obviously, mimic Louis Vuitton famous handbags featuring similar design elements like the LV monogram pattern and style. Louis Vuitton argued trademark infringement, trademark dilution, and unfair competition, arguing that the parody toys harmed its brand and diluted the distinctiveness of its trademarks.

Scott: In that case, the District Court ruled in favor of Hot Diggity Dog, finding that the dog toys were a parody and did not dilute or infringe on Louis Vuitton’s trademarks. Louis Vuitton then appealed to the Fourth Circuit, which affirmed the District Court’s decision.

Tara: On appeal, the Fourth Circuit evaluated Louis Vuitton’s dilution claims, specifically whether the Chuy Vuitton dog toy diluted Louis Vuitton’s trademarks through tarnishment. Like Jack Daniels, Louis Vuitton argued that the dog toys could tarnish its brand by associating its luxury image with pet products. The court rejected this argument, emphasizing that the Chuy Vuitton toys were playful and non-offensive. They were not of inferior quality, nor did they create a negative association with the Louis Vuitton brand the court found. The parody was clearly a joke and unlikely to harm Louis Vuitton’s reputation, so said the fourth circuit.

Scott: Then, Scott, does this mean that there is a split in the circuit?

Tara: Probably not. The court’s finding here in the Jack Daniels case is probably a result of the unique procedural nature of that case. Remember, after remand, the parties agreed that the court didn’t need to undertake additional findings of fact in order to decide the matter and that briefings on the remaining legal issues would suffice on cross-motions for summary judgment.

Scott: Theiding of dilution by tarnishment in the Jack Daniels case rests solely on the fact that the dog toy makes jokes about dog poop.

Tara: I mean, that seems to be the case. If the dog toy didn’t include jokes about dog poop or dog pee, then the expert opinion probably would have been different, and we probably would have seen a different result. But I guess we’ll never know. The court gave great weight to the expert for Jack Daniels in their determination that there was a likelihood of tarnishment due to the references to dog poop or pee.

Scott: I think that that’s really the only distinction. But I also think that there’s sure a lot of joking that happens about dog poop and poop in general. It seems to me to be a pretty thin line between Jack Daniels and Louis Vuitton.

Tara: I agree. I mean, I don’t know what the toy company’s expert opinion What it included and whether or not that opinion found that the references to dog poop and dog pee were not likely to cause dilution. We probably won’t know unless we read the docket. But that’s the only thing I think I can hang my hat on here and explain the differences between the two cases because otherwise, we do have a split, and we seem to have a split in the circuit. But I think that the differences rest on the unique facts of these two cases.

Scott: I definitely agree with you. I guess we should all be careful before we make any more dog poop jokes. Let me go, especially if we’re parading a strong brand like Jack Daniels and creating a dog toy. Thanks for joining me today, Tara.

Tara: Thanks, Scott.

Scott: That’s all for today’s episode of The Briefing. Thanks to Tara for joining me today. Thank you, the listener or viewer, for tuning in. We hope you found this episode informative and enjoyable. If you did, please remember to subscribe, leave us a review, and share this episode with your friends and colleagues. If you have any questions about the topics we cover today, please leave us a comment.

A motivational passage from Keith Bell’s book Winning Isn’t Normal sparks a legal battle after Ole Miss coach Lane Kiffin shares it on Twitter. Scott Hervey and Tara Sattler dive into the lawsuit, exploring how the Fifth Circuit’s ruling raises important questions about fair use, copyright enforcement, and Bell’s “serial litigant” status.

Watch this episode on the Weintraub YouTube channel.

Scott:

I’m Scott Hervey, a partner with the law firm of Weintraub Tobin and I’m joined today by my partner, Tara Sattler.

We are going to take a look at this particular case and a related case in the Fifth Circuit to try to understand why this federal judge and the Fifth Circuit came to such a different conclusion than the judge in Florida based on essentially similar facts on this installment of the briefing.

Tara, welcome back to the briefing. I think this is going to be a real interesting discussion.

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As TikTok’s future in the US hangs in the balance, influencers and brands are left wondering how a potential ban could impact their posting contracts. In this episode of The Briefing, Scott Hervey and Jamie Lincenberg dive into the potential legal challenges and share insights on how brands can stay ahead of the curve in this ever-changing landscape.

Watch this episode on the Weintraub YouTube channel.

Scott:

On January 19, 2025, TikTok went dark, forced to cease operations in the US as a result of a federal law that bans the app in the US unless TikTok divest itself from its Chinese parent company. Now, as we record this podcast today on the 21st, TikTok is back up. It has a 75-day stay granted by current President Trump. While TikTok sorts out whether it’s going to sell itself or some other deal structure that will allow it to continue to operate in the US. For influencers that use TikTok as a content platform, many are concerned, very concerned that this federal law ban will have a serious impact on their livelihood. But here’s something that I haven’t heard much chatter about. What happens to those brand integration contracts where an influencer is required to post content to TikTok after the ban date? Does this Does this mean that an influencer is in breach? Can the influencer be liable to a brand for failure to perform, even though it’s really out of the control of the influencer? I’m Scott Hervia, a partner with the law firm of Weintraub, Tobin, and I’m joined today by my colleague, Jamie Lindsberg, to talk about whether influencers face potential liability due to the TikTok ban on this installment of the briefing.

Jamie, welcome back to The Briefing.

Jamie:

Scott:

As I said, while I was working on our outline for the episode, the Wall Street Journal reported that President-elect Trump said that he would issue in order to reopen TikTok on Monday, January 20th, 2025. As we know, on Monday, President Trump gave TikTok a 75-day stay of the ban.

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And five, the parties have not agreed, either expressly or impliedly, to perform in spite of the impossibility or impractability that would otherwise justify on performance.

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Jamie:Typically, we do include a force majeure provision, which addresses a situation beyond either party’s control. Sometimes it is solely brands control. But of course, when working with the influencers, we want that to be a mutual right which is another factor that plays into all of this to suspend or terminate for a force majore. But typically, we do see a force majeure provision, and the influencer is paid out for services that have been rendered up to the time that the force majeure event interrupted performance of the contract.

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Kick off 2025 by reviewing your company’s IP assets! Whether you’re new to IP protection or a seasoned pro, it’s crucial to keep track of your valuable intellectual property. Scott Hervey & Tara Sattler break down key steps in safeguarding your trademarks, copyrights, and patents on this episode of The Briefing.

Watch this episode on the Weintraub YouTube channel.

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Tara, welcome back to the briefing. Happy New Year to you.

Happy New Year to you, too, Scott. Great to be here again.

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