SUPREME COURT RULES LAW PROHIBITING REGISTRATION OF IMMORAL OR SCANDALOUS TRADEMARKS IS UNCONSTITUTIONAL
Only two years ago, in the case of In re Tam, the Supreme Court unanimously ruled that the federal law (the Lanham Act) that prohibited registration of “disparaging” marks violated the First Amendment’s Free Speech Clause. This week, in the case of Iancu v. Brunetti, the Court ruled that the provisions of the same law that prohibited registration of “scandalous” and “immoral” marks, was also unconstitutional. So why is this important?
Under the Lanham Act, the Patent and Trademark Office (“PTO”) administers a federal registration system for trademarks. Registration of a mark is not mandatory, but can be very beneficial. The owner of an unregistered mark may still use the mark in commerce and enforce it against infringers. But registration gives trademark owners valuable benefits. For example, registration constitutes facial evidence of the mark’s validity. Registration serves as “constructive notice of the registrant’s claim of ownership,” which forecloses some defenses in infringement actions. Most importantly, getting a registration allows the registration owner to have constructive rights to the registered mark throughout the United States – including in areas where the owner is not actually doing business. Hence, registering marks is an important consideration for most businesses.
Historically, the PTO determined a mark was immoral or scandalous (and refused it a registration) if it met one of the following subjective standards that changed with societal norms: a) a “substantial composite of the general public” would find the mark “shocking to the sense of truth, decency, or propriety”; b) the mark gave “offense to the conscience or moral feelings”; c) the mark called “out for condemnation”; or d) the mark was “disgraceful,” “offensive,” “disreputable” or “vulgar.” In the case of Erik Brunetti, he sought to register the term FUCT for his clothing line and the PTO rejected it (not surprisingly) on the basis it was vulgar.
In the words of the Court, when you put the terms “immoral” and “scandalous” together, then the Lanham Act distinguishes between two opposed sets of ideas: those aligned with conventional moral standards and those hostile to them; those inducing societal nods of approval and those provoking offense and condemnation. This good versus bad metric for registration, however, results in a ban on marks the government views as bad (i.e., immoral or scandalous) and thus constitutes viewpoint discrimination. Viewpoint discrimination is generally not allowable under the First Amendment. Hence, the protections of the First Amendment trump the restrictions of the Lanham Act.
And, there you have it. The Supreme Court has given the green light for potty-mouth branding.
So what does this ruling mean for businesses? Well for those businesses that want to have edgy or socially provocative marks, the path to registration just became a lot clearer, simpler and cheaper. Those businesses will no longer have the government’s subjective foot on their throats forcing them to abandon marks the government deems immoral or scandalous. On the other hand, those same businesses need to be careful for getting what they wish. Launching a business or product with a brand that may be immoral or scandalous likely will not work for all but a few companies and could create a lasting public relations debacle.