Federal Circuit Bleeps Lanham Act Ban on Immoral or Scandalous Marks
Following the Supreme Court of the United States’ 2017 decision in Matal v. Tam (i.e., the Slants case) finding the proscription on the registration of disparaging trademarks under § 2(a) of the Lanham Act to be an unconstitutional restriction on free speech (IP Update, Vol. 20, No. 6), the US Court of Appeals for the Federal Circuit took up a similar constitutionality question with respect to the bar on registration of trademarks comprised of immoral or scandalous matter under § 2(a). The Federal Circuit differed somewhat from the Supreme Court’s underlying rationale in the Slants case and concluded that the Lanham Act’s bar on registering immoral or scandalous marks is an unconstitutional restriction on free speech. The Federal Circuit therefore reversed the Trademark Trial and Appeal Board’s (TTAB’s) holding that the appellant’s application for the mark FUCT as used in connection with various apparel items was unregistrable. In re: Erik Brunetti, Case No. 15-1109 (Fed. Cir., Dec. 15, 2017) (Moore, J) (Dyk, J, concurring).
Section 2(a) of the Lanham Act provides that the US Patent and Trademark Office (PTO) may refuse to register a trademark that “[c]onsists or comprises immoral, deceptive or scandalous matter.” To issue a refusal of a trademark application under this provision of the Trademark Act, the PTO looks to whether a “substantial composite of the general public” would find the mark scandalous in the context of contemporary attitudes and in the context of the marketplace as applied to the goods or services listed in the trademark application. The PTO and subsequently the TTAB refused registration of Erik Brunetti’s trademark application for the mark FUCT, under reasoning that the general public would find the mark to be phonetically identical to the past tense of the verb “fuck,” and thus vulgar and scandalous. Brunetti appealed.
Brunetti’s arguments to the Federal Circuit were multi-pronged. He argued that substantial evidence does not support the TTAB’s finding that the FUCT mark is vulgar. Brunetti also argued that even if the mark was vulgar, § 2(a) makes no express prohibition on the registration of vulgar marks. In the alternative, Brunetti also challenged the constitutionality of § 2(a)’s bar on immoral or scandalous marks.
The Court quickly did away with Brunetti’s first set of claims, finding that substantial evidence relating to the FUCT mark, including dictionary definitions and evidence of sexual and misogynistic imagery associated with the mark and the FUCT goods, supported the TTAB’s finding that the mark was vulgar. In addition, the Federal Circuit cited prior case law holding that the PTO may prove scandalousness of a mark by establishing that the mark is vulgar.
Turning to the constitutionality question, the court distinguished its holding from the Slants case, where the Supreme Court found the § 2(a) disparagement ban to qualify as an unconstitutional viewpoint restriction. Here, the Federal Circuit concluded that the ban on immoral or scandalous trademarks impermissibly discriminates based on content in violation of the First Amendment, and does not survive strict or intermediate scrutiny.
The PTO conceded that § 2(a)’s ban on registering immoral or scandalous marks is a content-based restriction. It argued, however, that the ban survives strict scrutiny review because trademark registrations qualify as either a government subsidy program or a limited public forum, and thus do not implicate the First Amendment. In the alternative, the PTO argued that trademarks are commercial speech implicating only an intermediate level of scrutiny under Central Hudson. The Federal Circuit rejected each of these arguments.
On the issue of trademarks as government subsidies, the Court swiftly pointed out that its own en banc decision in the Slants case (IP Update, Vol. 19, No. 1) rejected that argument, and held that the government’s involvement in processing and issuing trademarks does not transform the registration scheme into a government subsidy or equivalent thereof—noting that the valuable benefits of a trademark registration are not analogous to Congress’ grant of federal funds. The Court also rejected the PTO’s claim that trademark registrations constitute a limited public forum, such that the government may restrict speech consistent with the limited purpose for which the public forum has been opened. In essence, the Court found that the PTO failed to articulate a reason why a database of registered trademarks creates a limited public forum, and warned against the dangers of implicating other databases, including DMV or marriage records, as limited public forums allowing for government speech restrictions.
Thus, the Federal Circuit determined that the PTO’s rejection of trademarks under § 2(a)’s bar on immoral or scandalous marks targets expressive messages and is therefore subject to strict scrutiny, which it cannot survive. For good measure, the Court also explained that the immoral or scandalous bar is unconstitutional even if treated as regulation of commercial speech to be reviewed under the intermediate scrutiny framework of Central Hudson. After applying the four-part test applicable to commercial speech, the Court determined that all of the government’s proffered interests in regulating speech via trademarks point to permitting burdens on speech that the government finds to be offensive. As such, the Court determined that the bar on immoral or scandalous marks under § 2(a) does not advance the government’s asserted interests in a narrowly tailored manner.
Finally, addressing the concurrence written by Judge Dyk, which advocated for a narrow interpretation of § 2(a) as banning obscene speech, which would preserve the constitutionality of the statute, the majority of the Court noted that it cannot “stand in the shoes of the legislature and rewrite the statute,” such that the words “immoral” and “scandalous” cannot be read to be limited only to trademarks of a sexual nature. Thus, while the Court lamented the potential proliferation of offensive trademarks in the marketplace, it held that the bar in § 2(a) against immoral or scandalous marks is unconstitutional because it violates the First Amendment, and reversed the TTAB’s ruling that Brunetti’s mark is unregistrable under § 2(a).