Iancu v. Brunetti: Lawyers Weigh In On Fate of Scandalous Trademarks

In Iancu v. Brunetti (Case No. 18-302), the United States Patent and Trademark Office (USPTO) is appealing to the Supreme Court from a U.S. Court of Appeals for the Federal Circuit decision that held the Lanham Act’s prohibition on “immoral” or “scandalous” marks violates the First Amendment’s free speech clause. The case is the second in two years that the High Court has taken on the subject, and was argued on Monday, April 15.

The federal government’s petition specifically asks the Court to consider “whether Section 1052(a) [of the Lanham Act]’s prohibition on the federal registration of ‘immoral’ or ‘scandalous’ marks is facially invalid under the Free Speech Clause of the First Amendment.”

At issue is Erik Brunetti’s FUCT trademark for clothing, which was refused in 2011 because it was considered a scandalous term under Section 1052(a) of the Lanham Act.

According to the report from Monday’s hearing, the justices’ line of questioning indicated they are likely to follow their own lead in Matal v. Tam, which struck down the disparagement clause of the Lanham Act, by likewise striking down the restriction on federal registration of trademarks that are “immoral or scandalous” on First Amendment grounds. But, according to most observers, they are likely to take a relatively cautious approach in doing so.

As is customary, IPWatchdog reached out to industry experts for some additional views on the hearing.

Different Paths to the Same Holding

Brian R. Iverson, Bass Berry + Sims

Based on the oral argument, I would not be surprised to see multiple opinions in this case. Even if all nine justices agree on the result, they seem to view the case through different lenses that might lead to different conclusions on whether the “immoral” or “scandalous” clause is a restriction on speech or merely a condition for government benefits, whether any speech restriction is viewpoint discriminatory, and whether the government has satisfied the appropriate level of constitutional scrutiny.

For example, Justices Sotomayor, Ginsburg, and Kagan suggested concerns about viewpoint discrimination, while Chief Justice Roberts and Justice Breyer seemed unconvinced on this point. Justices Alito and Sotomayor were skeptical of the government’s interest in protecting the public from offensive marks, noting that the marks can be used regardless of federal registration. Justice Kagan suggested that the “immoral” or “scandalous” clause might be overbroad, and, relatedly, Justices Sotomayor, Ginsburg, Kavanaugh, and Gorsuch seemed concerned about the USPTO’s inconsistent application of the clause. Justice Breyer emphasized that certain highly charged words have a different physiological effect, seeming to suggest that the government might have a valid interest in avoiding association with those words. Chief Justice Roberts and Justice Gorsuch seemed to find some merit in the “government benefit” argument, with Justice Gorsuch referring back to last year’s Oil States decision in the patent realm. As is typical, Justice Thomas asked no questions.

Departing from Tam

Danielle Johnson, Goldberg Kohn

During arguments, the Court’s questions seemed more sympathetic to the government’s position than one would expect if they plan to fully follow the reasoning laid out in Tam. For example, a concern that the justices kept coming back to was whether striking down the scandalous marks provision would mean that the PTO would be obligated to register trademarks encompassing the most offensive of racial slurs. This is the government’s most sympathetic position—not wanting to give significant government benefits to trademarks incorporating offensive racial slurs is something most could understand. However, the Court has to consider the best arguments from both sides to make its determinations, so this line of questioning does not persuade me that the Court plans to depart from Tam. Ultimately, the Court may try to narrow the statute to allow the PTO to deny registration of trademarks for obscene material (as the Court established in Miller v. California in 1973) rather than strike it down altogether, but I do not predict a significant departure from Tam.

Narrowing the Statute

Jacqueline Lesser, BakerHostetler

At oral argument, the justices signaled a willingness to view narrowly drawn, content-based refusals of marks, such as profane or obscene marks, subject to the relaxed scrutiny test of Central Hudson, as commercial speech. The justices’ questions revealed equal concerns with the breadth of the statutory language of Section 2(a) and its inconsistent and subjective application, and the concept that without any regulation, profane and obscene language and images will be imprinted with the ®. The justices pushed back on Brunetti’s notion that the Trademark Office cannot regulate content. Section 2 of the Lanham Action 15 U.S.C. §1052 regulates content of a trademark – as a source indicator, a descriptive or generic term, or in conflict with a prior mark, among other restrictions. While the statute as drafted may not withstand constitutional challenge, it is foreseeable that the court will set groundwork for what it considers enforceable restrictions on particular words and images. You know what they are.

William Thomashower, Pryor Cashman LLP Of course, lawyers are instructed not to predict an outcome based on the questions at oral argument. With that caveat, there seemed to be unanimity that the statute itself was broad, or even overbroad, in prohibiting “immoral,” “deceptive” or “scandalous” words from the benefits of registration. This is, after all, a 1946 statute, repeating two of the words from the original 1905 Act. And the Court understood there was no restriction on the speech itself and was not backing away from its decision in Tam that a “viewpoint” could not be barred from registration. Several of the justices seemed more willing to consider the statute constitutional to refuse registration of a limited number of words and their equivalents that would be deemed by the public at large as “vulgar,” or “profane” or falling within the Court’s long-ago definition of “obscenity.” So, the concern was if the government can’t deny a registration benefit to the whole broader category of words under the statute, what does that do to the precedents that say the government can refuse profanity or obscenity in other contexts, like paid advertising on a city bus? And won’t there be a “mad scramble” to be the first to register all the core profanity, and get exclusivity? The statute being more broadly written than profanity and obscenity, Justice Gorsuch finally asked near the end, “Where is the line here?”