Supreme Court Rules Ban on Scandalous Trademark Registrations Violates Free Speech

There is little question that controversial product branding can set a company apart from the competition. It creates a buzz and causes people to take notice. Whether that buzz is sustainable over time is another question altogether, but the fact remains that the marketplace is constantly searching for the perfect mixture of branding that both shocks and attracts the public in order to successfully sell goods and services. But how far is too far?

There are two sides to that coin, says Dean Mead Litigation Department Chair, David Hathaway. From an economic standpoint, the question of whether a brand is too graphic or controversial is one that the marketplace is probably best suited to sort out. But Hathaway adds that there also is the legal question of whether the U.S. Patent and Trademark Office (PTO) will register a controversial trademark. While Section 1052(a) of the Lanham Act prohibits the PTO from registering a trademark that disparages people or consists of “immoral” or “scandalous” matter, that legal landscape has now changed by virtue of two Supreme Court decisions: Matal v. Tam, which was issued two years ago, and Iancu v. Brunetti, decided on June 24, 2019.

Disparaging Trademarks

In Matal v. Tam, an Asian American rock band sought to register the trademark “THE SLANTS.” The PTO denied registration on the grounds that the group’s name disparaged the Asian community in violation of the Lanham Act’s prohibition against registering any trademark that “may disparage” any person, “living or dead.” Ultimately, the Supreme Court ruled that this section of the Act was an unconstitutional violation of free speech because it discriminated against trademark applicants on the basis of viewpoint.

Immoral or Scandalous Trademarks

The more recent case of Iancu v. Brunetti involved a similar First Amendment challenge to the additional provision of the Lanham Act that prohibits the registration of “immoral” or “scandalous” trademarks. Erik Brunetti founded a clothing line that uses the trademark FUCT, which allegedly stands for “Friends U Can’t Trust” and is meant to be read as the individual letters, like “FBI” or “CIA.”  However, it takes on a different meaning when read as a single word, which – as the Supreme Court artfully notes – is “the equivalent of [the] past participle form of a well-known word of profanity.” The PTO denied registration of the trademark under the Act’s “immoral” or “scandalous” exclusion, finding the name “highly offensive” and “vulgar.”

Writing for the majority and following the court’s decision in Tam, Justice Elena Kagan rejected the notion that the Act’s bar on “immoral” or “scandalous” marks is “viewpoint-neutral.” Justice Kagan cited numerous examples where the PTO refused to register marks communicating “immoral” or “scandalous” views about subjects such as drug use, religion and terrorism, but then also approved the registration of marks demonstrating more accepted views on the same topics.

The statute, Kagan noted, does not limit its prohibitions to lewd, sexually explicit or profane marks. Rather, it includes the universe of material that is “immoral” or “scandalous,” regardless of whether it is lewd or profane. This strikes to the heart of violating free speech, Kagan concluded, as the Tam decision made clear that “a law disfavoring ‘ideas that offend’ discriminates based on viewpoint, in violation of the First Amendment.”

Looking to Congress

Hathaway observes that the majority, concurring and dissenting opinions all specifically failed to preclude the possibility of Congress adopting a new registration ban that narrows its construction to avoid constitutionality issues. It is clear that the justices found the marks in both the Tam and Brunetti cases distasteful. 

In support, Hathaway looks to the partial dissent of Justice Sotomayor, who wrote that once the government chose to offer the benefit of trademark registration, it also was prohibited from restricting an applicant’s access on the basis of the viewpoint expressed by their mark. Justice Sotomayor also predicted that the court’s decision in Brunetti would “beget unfortunate results,” with a race to the bottom to register “marks containing the most vulgar, profane, or obscene words and images imaginable.”

The Outlook From Here

“This is a very difficult issue,” Hathaway says, “because it compels the acceptance and legitimacy of what many see as distasteful trademarks and places them into the stream of commerce with a governmental seal of approval.” It remains to be seen, however, whether Congress will view the issue as sufficiently compelling to require action, or if the PTO’s examining attorneys will find other ways to refuse certain applications, such as the recent rejection of Patriots quarterback Tom Brady’s “Tom Terrific” application on the basis that it “consists of or comprises matter that may falsely suggest a connection with persons, institutions, beliefs, or national symbols.”  In that case, the mark allegedly falsely suggested a connection with former baseball player Tom Seaver.

States also have their own rules on registration, and section 495.021, Florida Statutes, states that a mark shall not be registered if it “[c]onsists of or comprises immoral, deceptive, or scandalous matter[.]”  It may be that the Division of Corporations no longer blocks certain state registrations based on that provision. Section 495.181, Florida Statutes, states that the intent of the chapter on trademarks is to provide a system of state trademark registration and protection substantially consistent with the federal system of trademark registration and protection under the Lanham Act. It says “[t]o that end, the construction given the federal act should be examined as persuasive authority for interpreting and construing this chapter.”

As for the economic considerations, Hathaway further observes that the recognition of a scandalous mark such as FUCT by the PTO does not necessarily predict its acceptance by the general public. Will mainstream retailers stock these items? Will established media advertise these products? And is there even a sustaining market for them? These are not legal questions, but business considerations that cannot be ignored by anyone contemplating the viability of a new and “shocking” trademark that seeks to test the boundaries of convention. Brunetti establishes that it is now possible to gain trademark registration for an expletive, but the question remains whether that company’s balance sheet will change in any meaningful way. If not, then all that has been re-established is that free speech is indeed among the most powerful rights granted by the Constitution.