To build on your Pepsi example: I could probably sell a chew toy that looked like a bottle of Pepsi with my "Pupsi" look-alike logo and the Rogers Test could be

To build on your Pepsi example: I could probably sell a chew toy that looked like a bottle of Pepsi with my "Pupsi" look-alike logo and the Rogers Test could be applied, but if I trademarked (officially or via branding) the Pupsi name and infringing logo by say, selling a line of Pupsi-branded pet supplies, it would not. Pepsi would then be able to pursue the "consumer confusion" argument that most people think of in IP/trademark disputes. The SCOTUS decision is all about shutting down the short-circuit that the lower court applied, now requiring them to go back and decide on the confusion question.