US Court Strikes Down Bar On Scandalous Trademarks

Yet another part of US trademark law is dead. On Friday, a US appellate court struck down a statutory provision that prohibited the registration of immoral or scandalous marks. The decision was almost inevitable, after a recent Supreme Court ruling applying the US Constitution’s free speech guarantees to trademark law. And it is likely to be followed by further successful court challenges to America’s trademark law.

The legal dominoes began falling last June, when the US Supreme Court ruled in Matal v. Tam [pdf] that Simon Tam’s rock group had a First Amendment right to obtain a federal trademark on the band’s name, The Slants. The US Trademark Office had rejected the band’s trademark application because “slant” is a derogatory term for someone of East Asian ancestry, and Section 2 of the federal trademark statute, known as the Lanham Act, allows the Trademark Office to reject trademark applications “which may disparage … persons, living or dead, … or bring them into contempt, or disrepute.” The high court ruled unanimously that trademarks are expressive private speech, protected by the Free Speech clause of the Constitution’s First Amendment. The court then struck down the ban on disparaging marks, because it violated the First Amendment.

The Justices did not agree on why the disparagement ban was unconstitutional. Four Justices stated that the ban was not “narrowly tailored” to serve a “substantial interest” of the government, so it failed to meet the constitutional standard for regulating commercial speech. The other four Justices held that the ban on disparaging marks constituted unconstitutional viewpoint discrimination, because it allowed for the registration of laudatory marks, but not condemnatory ones. (Only eight Justices heard the case, because there was, at the time, no replacement for a recently deceased ninth Justice.)

Following in Tam’s Footsteps

The Supreme Court’s decision in Tam was the springboard for the Federal Circuit’s 15 December trademark decision, In re Brunetti [pdf]. Each of these cases dealt with a different limit on federal trademark applications, but in both cases, the result was the same.

Section 2 of the federal trademark statute, known as the Lanham Act, allows the US Trademark Office to reject trademark applications for numerous reasons. Tam struck down Section 2(a)’s ban on disparaging marks. Brunetti struck down another provision in Section 2(a), the ban on registering “immoral … or scandalous” marks.

The Brunetti court held that the ban on scandalous marks is a “content-based restriction on speech”; that the government had no substantial interest in preventing this lawful speech; and that the ban on scandalous marks was not narrowly tailored to further the alleged governmental interests. Thus the ban failed to satisfy the Constitution’s requirements to limit commercial speech. The court then allowed Brunetti to obtain a federal registration for his clothing company’s scandalous trademark, “fuct.”

Most trademark experts expected the Brunetti decision, because it followed the path laid out by the Supreme Court in Tam. And these experts anticipate that other provisions of the Lanham Act are likely to be struck down under the same First Amendment analysis.

At Risk

One part of Section 2(a) prohibits the registration of marks that consist or contain “the flag or coat of arms or other insignia of the United States, or of any State or municipality, or of any foreign nation.” That ban appears vulnerable, at least when it comes to marks that do not falsely suggest endorsement by a government.

“You can argue that if you want to incorporate a burning flag into a trademark, this prohibition constitutes viewpoint discrimination,” said J. Michael Keyes, a partner in the Palo Alto office of the Dorsey & Whitney law firm. “Particularly with a flag or other insignia of the US, you can see a lot of people may want to use that to express a viewpoint critical of the government.” The ban also seems vulnerable under the ordinary First Amendment analysis applied by the Brunetti court and four of the Justices in Tam.

Another endangered part of Section 2(a) prohibits the registration of marks consisting of or containing “the name, signature, or portrait of a deceased President of the United States during the life of his widow.” That ban is hard to reconcile with the First Amendment protections espoused in Tam and Brunetti. “It seems rational to be able to use a portrait of the president, especially if it is being used to criticize that president or his policies,” Keyes said.

Other parts of the Lanham Act are also at risk, including a provision in Section 43(c) that allows the owners of famous marks to sue when others diminish the distinctiveness of the marks by harming the marks’ reputation. “Saying that you can’t use a trademark in a way that harms the reputation of the mark, I think that has to be viewpoint discrimination. You’re saying something negative about the mark or the mark’s owner,” noted Prof. Mark McKenna of Notre Dame Law School.

The US thus seems likely to continue on a path that expands the bounds of allowable registrable trademarks, regardless of the marks’ vulgarity or their offensiveness to large sections of the public. That promises to be a lonely legal path, avoided by the vast majority of other countries. “Most jurisdictions allow for no registration of marks that are ‘contrary to morality or public order,’” explained Prof. Christine Haight Farley of American University’s College of Law.

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