Federal Circuit Rules That Scandalous and Immoral Trademarks May Be Registered

Wednesday, December 20, 2017

Earlier this year, the U.S. Supreme Court ruled that the Lanham Act’s prohibition on the registration of disparaging trademarks was unconstitutional. Matal v. Tam, 137 S.Ct. 1744 (2017). The Court in Tam ruled that trademarks are private, not government, speech and that Section 2(a)’s bar on the registration of disparaging marks was unlawful viewpoint discrimination. The decision expressly reserved the question whether Section 2(a)’s prohibition on the registration of immoral and scandalous marks was constitutional.

On December 15, 2017, the Federal Circuit extended Tam and declared that Section 2(a)’s restrictions on immoral and scandalous marks also are unconstitutional. In re Brunetti, Case No. 2015-1109 (Fed. Cir. Dec. 15, 2017).

The applicant in Brunetti sought to register the trademark FUCT, but the USPTO refused to register the mark as immoral and scandalous. Although the case was pending prior to Tam, the court requested the parties to submit supplemental papers discussing how Tam affected the issues on appeal.

In a decision written by Judge Moore, the Federal Circuit ruled that Brunetti’s mark was “vulgar,” and thus was at least “scandalous.” It further ruled, however, that Section 2(a)’s bar on the registrability of the mark was unconstitutional. Following the broad path set out in Tam, the appeals court first noted that the USPTO did not dispute that the Section 2(a) bar was a content-based restriction on speech, and as such could not survive review under a “strict scrutiny” standard. See Reed v. Town of Gilbert, 135 S.Ct. 2218 (2015). The court also rejected the USPTO’s arguments that trademark registration does not implicate the First Amendment because it is a government subsidy program or establishes a limited public forum. As a result, it ruled that:

As in the case of disparaging marks, the PTO’s rejections under § 2(a)’s bar on immoral or scandalous marks are necessarily based in the government’s belief that the rejected mark conveys an expressive message—namely, a message that is scandalous or offensive to a substantial composite of the general population. Section 2(a) regulates the expressive components of speech, not the commercial components of speech, and as such it should be subject to strict scrutiny.

Slip op. at 28 (citation omitted). The court further ruled the prohibition was unconstitutional under a strict scrutiny review. See Central Hudson Gas & Electric Corp. v. Public Service Comm’n, 447 U.S. 557 (1980). The appeals court also noted that the USPTO has applied Section  2(a) inconsistently and upon review of other marks containing potentially offensive words or messages, it could not “discern any pattern indicating when the incorporation of an offensive term into a mark will serve as a bar to registration and when it will not.” Slip op. at 35.

Judge Dyk filed a dissent, noting that a court should only consider the constitutionality of a statute if it cannot be interpreted to avoid the issue. Judge Dyk argued that Section 2(a)’s prohibition could be interpreted as limited to obscene marks, which are not protected under the First Amendment.