United States: SCOTUS Gives A "FUCT" In Brunetti: First Amendment Supports "Immoral" Or "Scandalous" Trademarks

On June 24, 2019, the U.S. Supreme Court, in Iancu v. Brunetti, struck down the Lanham Act's prohibition on the registration of "immoral" or "scandalous" trademarks. Justice Kagan wrote for the 6-3 majority, holding that the prohibition impermissibly disfavors certain ideas and thus violates the First Amendment. The majority opinion was joined by Justices Ginsburg, Alito, Thomas, Gorsuch and Kavanaugh.

Section 2(a) of the Lanham Act and the Landmark Ruling in Tam

Section 2(a) of the Lanham Act—which harmonized trademark law throughout the country—states in relevant part that the U.S. Patent and Trademark Office may prohibit the registration of a mark that "[c]onsists of or comprises immoral... or scandalous matter." 15 U.S.C. § 1052(a). That section has been the subject of controversy and lawsuits.

In 2017, the Supreme Court, in its landmark ruling Matal v. Tam, unanimously struck down a neighboring provision of § 2(a) that prohibited registering marks that "disparage." In Tam, the founder of an all-Asian American dance-rock band "The Slants" applied to federally register THE SLANTS as a trademark. The trademark office denied registration on the grounds that it would disparage persons of Asian descent. The Trademark Trial and Appeal Board affirmed. But the Federal Circuit, in In re Simon Shiao Tam, held that prohibiting the federal registration of disparaging marks violated the First Amendment. The Supreme Court affirmed the Federal Circuit's en banc decision, ruling that the bar against "disparaging" marks was viewpoint-based and thus unconstitutional, violating the "bedrock First Amendment principle" that the government cannot discriminate against "ideas that offend."

After Tam, questions arose whether § 2(a)'s parallel prohibition on "immoral" or "scandalous" registrations would survive constitutional scrutiny. The Supreme Court has now provided an answer: it does not.

In the current case, Erik Brunetti, founder of a clothing line using the trademark FUCT as its branding name, claimed the mark is pronounced as four separate letters — F-U-C-T — and sought federal registration. A USPTO examining attorney and the TTAB rejected the mark for registration, determining that it was highly offensive, vulgar and had negative sexual connotations. Brunetti then brought a facial challenge to § 2(a)'s "immoral" or "scandalous" bar in the Federal Circuit, which found, in In re Brunetti, that the prohibition violated the First Amendment.

Affirming the Federal Circuit, the Supreme Court cited its Tam viewpoint discrimination rationale, finding the "immoral" or "scandalous" prohibition to be similarly unconstitutionally viewpoint-based.

The Court turned to guidance from dictionary definitions and found that the statute, on its face, distinguishes between two opposed sets of ideas. On one hand, marks that are "aligned with conventional moral standards... and induce societal nods of approval" favor registration. On the other hand, marks that are "hostile to [conventional moral standards]... and provok[e] offense and condemnation" are rejected. The Court conceded that it is understandable for the USPTO to have rejected marks based on what it believed would be offensive to many Americans (e.g., BABY AL QAEDA for use on T-shirts). Nevertheless, it reinvoked Tam to emphasize that a law disfavoring "ideas that offend" discriminates based on viewpoint and thus violates the First Amendment.

The government argued that § 2(a) could have a limiting construction that would remove its viewpoint bias, but the Court disagreed, reasoning that § 2(a)'s statutory bar stretches far beyond the government's proposed construction.

Separate opinions, each dissenting in part with the majority, were written by Justices Sotomayor, Breyer and Chief Justice Roberts. Generally, the three agreed with the majority's holding that the ambiguity in determining "immoral" marks was sufficient to strike down as unconstitutional. However, the dissenters proposed that the bar on "scandalous" marks could be narrowed to prohibit only marks that are highly obscene, vulgar or profane; rejection of such marks would not be based on the ideas they convey, but on their mode of expression. Thus, the impermissible viewpoint bias would be removed.

Chief Justice Roberts and Justice Breyer emphasized that the government has an interest in not associating itself with promoting obscene, vulgar or profane material. They also noted how refusing "scandalous" trademark registration based on this narrowed construction would have minimal harm to trademark owners because they would still be able to use such marks in commerce, as permitted by common law. Thus, owners would merely be denied certain additional benefits conferred by federal trademark registration. Justice Alito noted that Congress is empowered to adopt a "more carefully focused statute" precluding registration of "vulgar" terms that "play no real part in the expression of ideas."

Takeaways

After Brunetti, the USPTO might encounter an influx of trademark applications that owners previously withheld out of concern of being rejected based on § 2(a)'s bar. Indeed, Justice Sotomayor's divided opinion raised concern that there will be a "rush to register" the most vulgar, profane or obscene words and images imaginable, and the government would be left "immediate[ly] powerless to say no." On the other hand, Justice Alito noted that a law granting government officials the power to ban speech deemed to be "immoral" or "scandalous" can easily be exploited for illegitimate ends.

One thing is clear: The Court is willing to chip away at the Lanham Act and strike down laws that discriminate based on viewpoint in order to uphold free speech principles. But as it stands now, § 2 of the Lanham Act can prohibit registration for "deceptive" and "tarnishing" marks, as well as those that can suggest "contempt" or "disrepute" against people, institutions, beliefs and national symbols. If challengers bring lawsuits against these bans, it is possible that the Court would strike down these provisions to uphold the same free speech principles that triumphed in Tam and Brunetti. At the same time, should Congress wish to revise the statute, the Brunetti Court has laid out a path to do so.

The USPTO has already initiated changes to its examining procedures to reflect Brunetti. While the case was being litigated, it suspended action on pending trademark applications involving "immoral" or "scandalous" marks subject to refusal. After Brunetti, it issued a new examination guide, instructing that it is no longer a valid ground to refuse or cancel trademark registration because a mark is "immoral" or "scandalous." Accordingly, trademark applications that initially received an advisory refusal due to the bar will now be removed from suspension and examined for any other requirements or refusals. Additionally, if an application was previously abandoned after being refused registration due to the bar, a new application may be filed.

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