United States: Supreme Court: "There Are A Great Many Immoral And Scandalous Ideas In The World . . . And The Lanham Act Covers Them All."

Erik Brunetti is a Los Angeles-based artist. In 1990, he created the streetwear brand Fuct with professional skateboarder Natas Kaupas, and for the last 29 years the label has been producing the sort of outré clothing its name suggests. The company's website displays an example: a hooded sweatshirt displaying the phrase "FUCT Los Angeles." Unlike most other long-lived clothing labels, however, Fuct has never secured a federal registration for its mark.

That may soon change. On June 24, 2019, in Iancu v. Brunetti, No. 18-302, the Supreme Court struck down, on First Amendment grounds, the section of the Lanham Act that prohibited the registration of "immoral" or "scandalous" marks. Writing for a six-Justice majority, Justice Kagan opined that the "immoral or scandalous" bar constituted impermissible viewpoint discrimination and therefore violated the First Amendment.

The Court's decision will likely lead to federal registration for many other trademarks that incorporate objectionable or subversive phrases or images. It is less clear, however, what the future holds for marks like FUCT. Several Justices mentioned the possibility that a statute more narrowly tailored to bar registration based on the mode of expression, without regard to the speaker's perspective—i.e.,barring registration of marks that contain profanity, racial epithets, or other vulgarities—might be permissible under the First Amendment.

The Court Strikes Down the "Immoral or Scandalous" Bar

This legal dispute started when Mr. Brunetti tried to register FUCT in connection with athletic, children's and infant's apparel. The United States Patent and Trademark Office (PTO) denied registration, finding that FUCT violated Section 2(a) of the Lanham Act, 15 U.S.C. § 1052(a), because it "comprise[d] immoral or scandalous matter." The Trademark Trial and Appeal Board (Board) affirmed, relying in part on the Urban Dictionary's definition of the word "fuct" as "slang and literal equivalent" of the past tense of the word "f[***]," and Brunetti's use of the mark on clothing to convey "misogyny, depravity, [and] violence."

Mr. Brunetti appealed to the United States Court of Appeals for the Federal Circuit. Before the Federal Circuit issued its decision, the Supreme Court decided Matal v. Tam, 137 S. Ct. 1744 (2017). Tam involved a related provision of Section 2(a), which barred the registration of marks that tend to disparage any individual, institution, or belief. The Supreme Court ruled that the disparagement bar violated the First Amendment, because it constituted discrimination on the basis of the trademark owner's viewpoint. Relying on Tam, the Federal Circuit reversed the Board's denial of registration, holding that the "immoral or scandalous" bar, like the disparagement bar, discriminates based on viewpoint and is therefore also unconstitutional under the First Amendment.

The Supreme Court affirmed. Justice Kagan's majority opinion emphasized that the Court's First Amendment jurisprudence has consistently overturned government restrictions that discriminate based on the viewpoint of a speaker because "[t]he government may not discriminate against speech based on the ideas or opinions it conveys" or because the Government "disapprov[es] of a subset of messages it finds offensive."

To the majority, "immoral" and "scandalous" could only be understood to refer to the "ideas or opinions" of the mark owner seeking registration:

When is expressive material "immoral"? According to a standard definition, when it is "inconsistent with rectitude, purity, or goods morals"; "wicked"; or "vicious." . . . So the Lanham Act permits registration of marks that champion society's sense of rectitude and morality, but not marks that denigrate those concepts. And when is such material "scandalous"? Says a typical definition, when it "giv[es] offense to the conscience or moral feeling". . .

In sum, Section 2(a) "allows registration of marks when their messages accord with, but not when their messages defy, society's sense of decency or propriety." The facially discriminatory nature of the "immoral or scandalous" bar was reflected in the PTO's application of the statute in practice, according to the Court. For instance, the PTO had registered SAY NO TO DRUGS—REALITY IS THE BEST TRIP IN LIFE while denying registration to marks suggesting opposing views about the same topic, including YOU CAN'T SPELL HEALTHCARE WITHOUT THC and BONG HITS 4 JESUS.

The government argued that the Court should avoid the First Amendment issue by interpreting the immoral or scandalous bar to only include "marks that are offensive or shocking to a substantial segment of the public because of their mode of expression, independent of any views that they may express." The Court refused. The Court recognized that the PTO itself does not parse the separate meanings of "immoral" and "scandalous," but instead applies the bar as a "unitary provision." Moreover, the Court held that neither "immoral" nor "scandalous" were ambiguous, and therefore the Court could not give the terms the meaning the government suggested. As the majority explained, "[t]o cut the statute off where the government urges is not to interpret the statute Congress enacted, but to fashion a new one."

While every Justice agreed that the "immoral" portion of the "immoral or scandalous" bar could not be interpreted in the limited manner the government proposed, Chief Justice Roberts and Justices Breyer and Sotomayor each dissented in part to opine that the "scandalous" portion of the bar could be. Justice Sotomayor presented the most detailed analysis of this issue, arguing that "scandalous" is ambiguous because it may refer to either the content of speech, or the mode in which the speech is expressed. If the latter, "scandalous" is a permissible "viewpoint-neutral form of content discrimination." Although Chief Justice Roberts did not join Justice Sotomayor in her reasoning, each of the dissenting Justices agreed that "scandalous" may be interpreted in this manner, and that such a restriction on the mode of expression—rather than the underlying idea expressed by the mark—would be permissible under the First Amendment.

No Resolution of Proper First Amendment Framework

As it did with respect to the disparagement bar in Tam, the Court struck down the "immoral or scandalous" bar without resolving, as Chief Justice Roberts put it, "how exactly the trademark registration system is best conceived under our precedents." In other words, the majority's opinion does not turn on the treatment of federal trademark registration as "government speech," "commercial speech," or the like. To the Court, that the law discriminated on the basis of viewpoint was sufficient to strike it down without resolving these questions of categorization.

Justice Breyer wrote separately to argue that a "category-based approach to the First Amendment" would not be useful in this context. He proposed—as he has in other First Amendment cases—replacing the Court's First Amendment framework with a simple proportionality question: does the regulation at issue cause disproportionate harm to First Amendment interests in light of the objectives the regulation addresses? Under that analysis, a broad prohibition on registering "immoral" marks would not survive First Amendment scrutiny, but a narrower prohibition focusing on the "scandalous" mode of expression would.

Only Justice Sotomayor attempted to fit the federal registration system within a particular First Amendment framework, and even she did not argue for one in particular. She explained that, "[w]hen the Court has talked about government initiatives like [the registration system], it has usually used one of two general labels . . . a limited public (or nonpublic) forum . . . [or a] "government program[] or subsid[y]." Under either framework, she argued, the Court has generally permitted "viewpoint-neutral content discrimination." Like Justice Breyer's, Justice Sotomayor's analysis would permit narrow restrictions on the registrability of marks incorporating particular "scandalous" modes of expression.

Implications for Future Applications to Register "Immoral" or "Scandalous" Marks

The holding in Brunetti will likely lead to new applications to register trademarks that would have previously been subject to a refusal under the "immoral or scandalous" bar. Justice Sotomayor twice identifies the "coming rush to register" "marks containing the most vulgar, profane, or obscene words and images imaginable[,]" which she says is a result that is "eminently avoidable" if the majority agreed with her narrower view of the statute.

Presumably, the forecasted uptick in applications for marks that might otherwise have been deemed immoral or scandalous reflects a common understanding about the importance of securing federal trademark registration. As the majority recognized, federal trademark registration confers "valuable benefits":

For example, registration constitutes "prima facie evidence" of the mark's validity. [15 U.S.C.] § 1115(a). And registration serves as "constructive notice of the registrant's claim of ownership," which forecloses some defenses in infringement actions. [15 U.S.C.] § 1072.

The "rush to register" will, additionally, not only include new applications, but also pending applications that the PTO had suspended pending the outcome of Brunetti. Many of the marks subject to suspension under the "immoral or scandalous" bar dispense with Brunetti's coy use of homonym and use profanity directly, including: I'M NOT GOING TO F[***] YOU and F[***] CHILD SUPPORT. The decision may also open the door to the federal registration of marks referring to marijuana, which have previously been refused under the "immoral or scandalous" bar. (However, to the extent that applicants seek registration for such marks in connection with marijuana products, they may still face refusal for failure to demonstrate lawful use in commerce, as long as marijuana products themselves remain illegal under federal law.)

Possibly, the registration of marks previously subject to the "immoral or scandalous" bar will prompt a legislative response. If so, the dissenting opinions' discussion of the constitutionality of a narrow "scandalous" bar may provide guidance for crafting a statute that would survive constitutional scrutiny by limiting its application to particularly vulgar or obscene modes of expression. The majority's decision does not expressly rule out the permissibility of such a restriction under the First Amendment, and Justice Alito, who joined the majority but also wrote a separate concurrence, seemed to invite new legislation, writing that "[o]ur decision does not prevent Congress from adopting a more carefully focused statute that precludes the registration of marks containing vulgar terms that play no real part in the expression of ideas."

Should Congress pass such a law, it may not be long before Mr. Brunetti, or another applicant like him, raises a new First Amendment challenge. Until then, Mr. Brunetti and his decades-old clothing brand can likely look forward to a time in the near future when FUCT appears on the Principal Register.

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