Intellectual Property Alert | December.20.2017
On December 15, the U.S. Court of Appeals for the Federal Circuit struck down the Lanham Act's ban on registering immoral or scandalous trademarks as unconstitutional on First Amendment grounds in In re Brunetti, --- F.3d ---- (Fed. Cir., Dec. 15, 2017, No. 2015-1109). This decision followed just a few months after the Supreme Court's significant holding in Matal v. Tam, 137 S. Ct. 1744 (2017), which invalidated the disparagement clause of the Lanham Act on the same grounds. In re Brunetti further expands the new world of potentially offensive subject matter now eligible for federal trademark protection.
At issue was Erik Brunetti's application to register the mark FUCT for various items of clothing. The Examining Attorney refused registration under Section 2(a) of the Lanham Act, finding that the mark comprised immoral or scandalous subject matter because FUCT is the past tense of the vulgar verb "fuck." The Trademark Trial and Appeal Board affirmed the Examining Attorney's refusal, citing dictionary definitions uniformly characterizing the word "fuck" as offensive and several images showing Brunetti using the mark in connection with explicit sexual imagery. The Federal Circuit agreed that the mark was vulgar and scandalous, but then turned to examine the constitutionality of the immoral or scandalous clause of Section 2(a).
In supplemental briefing after Tam, the government sought to distinguish In re Brunetti arguing that while the disparagement provision in Tam implicated viewpoint discrimination, the immoral or scandalous provision was viewpoint neutral. The government conceded that Section 2(a)'s bar on immoral or scandalous marks was a content-based restriction on speech not capable of surviving the traditional strict scrutiny review. Instead, the government argued that the provision did not implicate the First Amendment for two reasons: a trademark registration is a government subsidy program, or it is a limited public forum.
First, The Federal Circuit rejected the government's argument that Section 2(a) was simply a reasonable exercise of Congress' spending power because the trademark registration system is a government subsidy. In Tam the Court held that it was not a difficult question to determine that a trademark registration is not a government subsidy because a trademark applicant "does not receive federal funds upon the PTO's . . . grant of a trademark" and the PTO is self-sufficiently funded by the fees applicants pay to apply for registration. Accordingly, a trademark registration does not implicate Congress's spending authority under the Spending Clause, and Section 2(a) could not escape review on traditional First Amendment grounds.
Second, the Federal Circuit rejected the government's argument that a trademark registration is a limited public forum, noting that the government was unable to articulate precisely what the Principal Register actually is or where it is located in a physical sense. The mere existence of a government database of trademarks does not create a limited public forum. The court held that because trademarks are used in commerce, the speech associated with them is not tethered to any particular government-owned property, such as a school or workplace.
The Federal Circuit next rejected the government's attempt to classify trademarks as commercial speech and, therefore, subject to a less rigorous standard of review. The court noted that the immoral or scandalous clause targeted the expressive message, just like the disparaging trademarks at issue in Tam. The Federal Circuit added that even if treated as purely commercial speech reviewed under intermediate scrutiny, the immoral or scandalous clause would not survive. The court found that the government had not put forth any valid substantial interests advanced by the scandalous or immoral clause and that, in any event, the clause had not been applied consistently enough to indicate that the ban was carefully tailored.
Finally, the Federal Circuit considered whether it could narrowly construe the statutory terms "immoral" and "scandalous" to preserve their constitutionality, but decided that they could not reasonably be read to be "limited to material of a sexual nature." In contrast, the concurrence by Judge Dyk would have saved the provision by narrowing its construction to reach only obscene marks.
The Federal Circuit's decision in Brunetti is not surprising in light of the Supreme Court's earlier decision in Tam, and it therefore seems unlikely that the Supreme Court will reverse the Federal Circuit's decision. The U.S. Patent and Trademark Office will be bound by the Federal Circuit's decision, yet it will likely continue to suspend final review of currently pending trademark applications that contain immoral or scandalous matter until all appeals are exhausted or resolved. The potential subject matter of registrable trademarks has, for the second time in just a few months, expanded considerably. It will be interesting to see how these new court interpretations affect trademark application filings in the New Year.