U.S. Supreme Court Strikes Down “Immoral or Scandalous” Clause as Unconstitutional

In Trademarks by Stacey Kalamaras

On June 24, 2019, in the Brunetti case, a decision consistent with its 2017 Tam decision (read here), the U.S. Supreme Court in a 6-3 decision held that the U.S. Patent and Trademark Office (PTO) could no longer refuse federal registration that “consists of or comprise immoral or scandalous trademarks” holding that such a refusal by the PTO of such marks under Section 2a of the Lanham Act violates the First Amendment of the Constitution.

The Decision

This case concerned the application of the trademark FUCT by Erik Brunetti for a clothing line and the case was highly litigated.  Consistent with its decision in Tam, the Supreme Court was aligned in its holding that the PTO could not refuse to register any mark that the Government deemed to be immoral or scandalous, as by doing so, the Government engages in viewpoint discrimination. Here, as in Tam, the Court was very clear that this is a violation of the Free Speech Clause of the First Amendment. The majority was clear that with its current practice, the PTO was engaging in viewpoint discrimination in its approval of marks for registration that it felt did not offend a majority of the population, and this was the essence of the Court’s decision in Tam. The Court gave a number of examples where the PTO, when it applied the “immoral or scandalous” provision of Section 2a fairly, engaged in viewpoint discrimination barred by Tam because it engaged in the suppression of some views over others.

Immoral or Scandalous Marks

The “immoral or scandalous” clause of Section 2a of the Lanham Act has always been read as a unitary clause by the PTO, meaning the PTO considers immoral and scandalous marks as one type of mark versus the dissenting Justices believing they are two different types of refusals. All of the Justices agreed in the holding with respect to “immoral” marks, but this is where the agreement ended among the Justices.  Three dissented with respect to “scandalous” marks. Chief Justice Roberts, Justice Breyer, and Justice Sotomayor believe the “scandalous” portion of Section 2a should be read more narrowly to bar marks that offend because of their “mode of expression.” Their rationale is that since registration is not required for trademark rights in the U.S., the Government can regulate this offensive speech.  However, in my opinion, the Justices failed to fully understand the purpose of trademark law in order to try to save one part of a clause that clearly had no reason to be upheld.

Dissenting Opinions and Misunderstanding the Purpose of Trademark Law

The Justices opined that Mr. Brunetti did not even need a U.S. Trademark Registration because of the U.S.’s common law system of rights.  First, it is not for any court to decide a business strategy. Whether or not to rely solely on common law rights is a decision for any business owner. Second, it was widely reported that Mr. Brunetti was having an issue with counterfeiters.  Such a problem can only be combatted with an issued U.S. Trademark Registration.  So, in fact, Mr. Brunetti’s business was suffering at the hands of counterfeiters by not having a registered U.S. trademark.

The Justices also misunderstood that, for the most part, the majority of these “immoral or scandalous” marks are never going to rise to the level of trademark use and as a result, a certificate of registration will never issue.  Further, it is the job of the consuming public to decide which brands it wishes to patronize and not the government.  Brands are built by consumers’ spending dollars and not created merely by the issuance of a certificate of registration from the PTO. These three Justices are not correct that by granting a Certificate of Registration, the Government somehow endorses the trademark.  Nothing could be further from the truth.  Trademark rights exist only by use in interstate commerce and since most of these applicants are applying for marks only for shock value, the chances of the trademark owner’s ability to sustain a trademark registration over the long-term is quite low.  Further, even if a brand like FUCT becomes the new clothing sensation, who cares?  What difference does it make?  The beauty of our democratic and capitalist system is that consumers get to vote with their pocketbooks.  Those that want to purchase the brand can and those that choose not to are not required to do so.

Impact of the Decision

The PTO has amended its Examination Guidelines in light of this decision.  Prior to this decision, and in light of the Appellate Court decision in December 2017 (see our article here) all marks deemed “immoral or scandalous” by the PTO were suspended. Now, all those marks will be lifted from suspension and re-examined for any other issues.  If any “immoral or scandalous” marks have been abandoned for other reasons, the trademark owner may reapply.  However, the primary issue remains – the trademark owner must properly use the applied for term as a trademark in order to secure its trademark registration. Even though we may see an uptick as a result of this decision, practically speaking, we should not really see an influx of “immoral or scandalous” registrations.  For these reasons, no one should be overly concerned.

If you require assistance with your trademarks or have a question about this particular decision, please contact us.