Ban on Registration of "Immoral" or "Scandalous" Trademarks Held Unconstitutional

Recently, the US Supreme Court unanimously affirmed a Federal Circuit decision holding unconstitutional the ban on federal registration of trademarks that "disparage" persons, institutions or beliefs under Section 2(a) of the Lanham Act, 15 U.S.C. §1052(a).¹ Following closely on the heels of Tam, the Federal Circuit has now invalidated another bar on registration, known as the "immoral or scandalous provision" (i.e., the ban on the registration of "immoral" or "scandalous" marks).²

Both Tam and Brunetti address the constitutionality of Section 2(a) of the Lanham Act, 15 U.S.C. §2(a), which lists several bases for the US Patent and Trademark Office (PTO) to refuse registration of a mark. While not essential to trademark use, registration with the PTO confers important benefits on a trademark owner. For example, a federal registration is prima facie evidence that the mark is valid, and that the registrant has exclusive rights to use the mark nationwide for the goods and services for which it is registered.³ Registration thus may offer significant benefits to a trademark holder such as Appellant Erik Brunetti.

At issue in Brunetti was a trademark that may have amused some, but offended others: The use of "FUCT" on clothing. The Trademark Trial and Appeal Board (TTAB or Board) fell into the latter category, affirming a refusal to register Mr. Brunetti's "FUCT" mark on the basis that "FUCT" was effectively the past tense of "the 'F' word" (the term as used in polite company). Added to this was Mr. Brunetti's use of "FUCT" in connection with misogynist pictures and anti-social, violent imagery—all of which contributed to the Board's finding that "FUCT" was "vulgar," "scandalous," and thus not deserving of registration. Mr. Brunetti contended that his mark was not scandalous, as "FUCT" simply meant 'Friends yoU Can't Trust"—an argument that the TTAB did not find persuasive.⁴

Writing for the majority, Judge Moore (Judge Kimberley Moore) agreed with the Board's evidentiary findings, emphasizing: "The trademark at issue is vulgar."⁵ The Court held that such a finding did, indeed, support a conclusion that a mark was "immoral" or "scandalous".⁶ The Court nonetheless reversed the refusal to register "FUCT."

At the heart of the majority's opinion was the finding that the "immoral or scandalous" provision in §2(a) is unconstitutional. The Federal Circuit cited its en banc decision in In re Tam, 808 F.3d 130 (Fed. Cir. 2015), which the US Supreme Court unanimously affirmed.⁷ In its Tam decision, the Federal Circuit had reversed a refusal to register the mark "The Slants" for an Asian-American rock band on the basis that it disparaged members of the Asian-American ethnic community. The Federal Circuit had held the disparagement clause subject to strict scrutiny and, under such a standard, unconstitutional. The disparagement clause impermissibly barred the band from using its name and trademark to engage in freedom of expression, the Federal Circuit had reasoned, thus constituting "viewpoint discrimination."

In Brunetti, the Federal Circuit declined to decide whether the immoral or scandalous provision likewise manifested viewpoint discrimination, while hinting that such discrimination might well apply. Instead, the majority concluded that the "immoral or scandalous" bar on registration violated the First Amendment as impermissible content-based discrimination.⁸ The court emphasized that "[co]ntent-based statutes are presumptively invalid", citing RAV v. City of St. Paul, Minn., 505 U.S. 377, 382 (1992). Such a statute would only endure if (a) there were a compelling governmental interest for the restriction and (b) the restriction were narrowly tailored to achieve that interest.⁹

In fact, the government had conceded that the "immoral or scandalous" provision constituted a content-based restriction. The government argued, among other things, that First Amendment concerns did not apply to Brunetti's case because trademark registration was a government subsidy program—an argument that the Federal Circuit in Tam had already rejected. The government also argued, to no avail, that the "immoral or scandalous" restriction should be subject only to the intermediate scrutiny applied to commercial speech under Central Hudson Gas & Elec. Corp. v. Public Serv. Comm'n of N.Y., 447 U.S. 557 (1980). According to the Federal Circuit, however, strict scrutiny, not intermediate scrutiny, applied to the "immoral or scandalous" provision, because that clause targeted expressive speech; the PTO's rejection of trademarks as offensive "constituted value judgments about the expressive message behind the trademarks."¹⁰

Moreover, Judge Moore wrote, the immoral or scandalous provision would not even pass intermediate scrutiny under Central Hudson. In so holding, the majority emphasized that the provision is not carefully tailored, and thus could not be reasonably construed so as to preserve its constitutionality. Contrary to Judge Dyk's concurring opinion, which urged that the "immoral or scandalous" provision be confined to "obscene" marks so as to preserve its constitutionality, the majority found this provision impermissibly vague and unevenly applied.¹¹ The majority cited wild inconsistencies in the PTO's review of applications—approving, for example, registration of "FCUK," while rejecting the virtually identical "FUCT" mark at issue in Brunetti, as well as the mark "F**K PROJECT," as scandalous.¹²

Together, Tam and Brunetti have significantly narrowed Section 2(a) of the Lanham Act. Yet, this statutory provision retains several limitations on trademark registration, principal among them the ban on registration of "deceptive" matter or marks creating a false association with "persons, living or dead, institutions, beliefs, or national symbols." These clauses are made of more sturdy matter, so to speak. They should not be prone to constitutional challenge on First Amendment grounds, as they do not implicate any limitations on expressive speech, but instead are designed to prevent consumer confusion, the sine qua non of the federal trademark laws.

© 2017 Arnold & Porter Kaye Scholer LLP. This Advisory is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.