IP Law Daily Statutory bar on ‘immoral and scandalous’ marks was unconstitutional restriction on free speech
Friday, December 15, 2017

Statutory bar on ‘immoral and scandalous’ marks was unconstitutional restriction on free speech

By Mark Engstrom, J.D.

The U.S. Court of Appeals for the Federal Circuit has ruled that the word FUCT could be registered on the principal register. Although substantial evidence supported the Trademark Trial and Appeal Board’s finding that the mark was immoral or scandalous, the statutory bar on registering immoral or scandalous marks—15 U.S.C. §1052(a)—was an unconstitutional restriction on free speech, the court explained. The court thus reversed the Board’s finding that the mark was not registrable (In re Brunetti, December 15, 2017, Moore, K.).

Procedural posture. Plaintiff Erik Brunetti created the clothing brand "fuct" in 1990. A trademark examining attorney refused registration of the FUCT mark for apparel because the mark comprised immoral or scandalous matter. According to the examining attorney, the word FUCT was the past tense of "fuck," a vulgar word, and thus was scandalous.

The plaintiff appealed and the TTAB affirmed. Based on the results of a Google Images search that was conducted by the examining attorney, the Board concluded that the appellant had used the mark in the context of "strong, and often explicit, sexual imagery that objectifie[d] women and offer[ed] degrading examples of extreme misogyny" with a theme of "extreme nihilism … and dozens of examples of other imagery lacking in taste."

The Board explained that the appellant’s use of the mark would be perceived by his targeted market as the phonetic equivalent of "fucked." In light of the record evidence, the Board could not conclude that FUCT was an invented or coined term. Instead, it concluded that the mark was vulgar and thus unregistrable. Brunetti appealed.

Meaning. On appeal, the appellant argued that the meaning of "fuct" was ambiguous. To the extent that it had any meaning at all, the appellant argued, it was "Friends yoU Can’t Trust." The court was unpersuaded. "Substantial evidence supports the Board’s finding that ‘fuct’ is a ‘phonetic twin’ of ‘fucked,’ the past tense of the word ‘fuck,’" the court concluded. The term was vulgar and thus "scandalous" under §2(a) of the Lanham Act. The argument that §2(a) prohibited "immoral" or "scandalous" marks, but not "vulgar" marks, was rejected. The Federal Circuit had already held that "the PTO may prove scandalousness by establishing that a mark is ‘vulgar.’"

Constitutionality of §2(a). The "immoral or scandalous" provision was impermissibly discriminatory based on content, in violation of the First Amendment, the court decided. The government conceded that the bar on registering immoral or scandalous marks was a content-based restriction on speech, and it did not argue that the provision survived strict scrutiny. Instead, the government argued the First Amendment was not implicated by the content-based bar on registering immoral or scandalous marks because trademark registration was a "government subsidy program" or "limited public forum." Alternatively, the government argued that a trademark constituted "commercial speech" that was reviewed under intermediate scrutiny, pursuant to Central Hudson Gas & Electric Corp. v. Public Service Commission, 447 U.S. 557 (1980). Under intermediate scrutiny, the "immoral or scandalous" provision constituted an appropriate content-based restriction that was tailored to substantial government interests, the government contended.

Government subsidy. The government argued that the bar on registering immoral or scandalous marks was a reasonable exercise of its spending power, in which the bar on registration was a constitutional condition that defined the limits of trademark registration. The court, however, had already rejected the applicability of that analysis to trademark registrations. Similarly, the four Supreme Court justices who had reached the issue in Matal v. Tam, 137 S.Ct. 1744 (2017) held that the government subsidy framework did not apply to trademark registrations.

According to the court, trademark registration did not implicate Congress’ power to spend funds. A trademark applicant did not receive federal funds after the PTO’s consideration of, or grant of, a trademark, the court explained; the exchange of funds flowed from the applicant to the PTO. The applicant paid the applicable trademark fees, which were made available to the Director to "carry out the activities of the [PTO]."

Since 1991, trademark fees—not appropriations from taxpayers—have fully funded the direct operating expenses of trademark registration, the court noted. Congressional authority to direct funds was thus not implicated by the operating expenses that were necessary to examine a proposed mark or the PTO’s ultimate grant of trademark registration, and the government’s involvement in the issuance and maintenance of trademarks did not transform the registration process into a government subsidy or subsidy equivalent.

Limited public forum. The government argued that the federal trademark registration program was a "limited public forum" that subjected content-based restrictions on immoral or scandalous marks to a lesser degree of scrutiny. According to the government, the principal register was a "metaphysical" limited public forum.

The court noted that a limited public forum could be found only when the government restricted speech "on its own property." The court acknowledged that "some" of the Supreme Court’s limited public forum cases involved forums that existed "more in a metaphysical than in a spatial or geographic sense," but all of those forums were "tethered to government properties."

In this case, speech that flowed from trademark registration was not tethered to a public school, federal workplace, or other government property; therefore, the registration and use of trademarks did not fit within the rubric of public or limited public forum cases. Further, the fact that registered marks appeared on the government’s principal register did not transform trademark registration into a limited public forum. For those reasons, the court concluded that the registration of trademarks did not create a limited public forum in which the government could restrict speech more freely.

Strict scrutiny. Because the prohibition on the registration of immoral or scandalous trademarks targeted the "expressive content" of speech, the court found that strict scrutiny was the applicable standard of review. The court noted that, in Justice Kennedy’s concurring opinion in Tam, the justice emphasized that the "central purpose" of trademark registration was the facilitation of source identification. Whether a mark was "disparaging" bore "no plausible relation to that goal." In the Federal Circuit’s view, the same logic applied to the "immoral or scandalous" prohibition under §2(a).

Intermediate scrutiny. Even if the registration of immoral or scandalous marks was treated as commercial speech and reviewed under intermediate scrutiny, the provision would still be unconstitutional, according to the court. Commercial speech was subject to a four-part test, the court noted, and the government did not meet any part of that test, which asked whether: (1) the asserted speech concerned lawful activity and was not misleading; (2) the asserted government interest was substantial; (3) the asserted provision directly advanced the government’s substantial interest; and (4) the provision was "not more extensive than necessary to serve that interest." Because the government failed to offer a "substantial" government interest that justified the bar on immoral or scandalous marks, the bar could not survive intermediate scrutiny.

Definition of "scandalous" and "immoral". In the court’s view, no reasonable definition of the statutory terms "scandalous" and "immoral" could preserve their constitutionality. Although Judge Dyk suggested, in his concurring opinion, that the court should "narrow the immoral-scandalous provision’s scope to obscene marks in order to preserve its constitutionality," the majority disagreed. The legislature could rewrite the statute to adopt that standard, but the court could not.

Construing the words "immoral" and "scandalous" to mean "obscene" was simply not reasonable, the court noted, because an obscene mark would be scandalous or immoral, but scandalous or immoral marks were not all obscene.

Ultimately, the majority did not see how the words "immoral" and "scandalous" could be reasonably read as words that were limited to material of a sexual nature, and the court could "not stand in the shoes of the legislature and rewrite a statute."

Concurrence. Circuit Judge Timothy B. Dyk agreed with the majority that the Supreme Court’s recent decision in Tam did not dictate the facial invalidity of the immoral-scandalous provision. The ruling in Tam ruling was limited to the "disparagement" provision of the Lanham Act, the judge explained; it did not address the immoral-scandalous provision.

Nevertheless, Judge Dyk wrote separately to emphasize that, where possible, courts had to "construe federal statutes so as ‘to avoid serious doubt of their constitutionality.’" In this case, the majority could have limited the reach of the immoral-scandalous provision to "obscene" trademarks, which were not protected by the First Amendment.

Under the narrower construction, the bar on the registration of obscene marks would withstand constitutional challenge. If Congress decided to expand the scope of §2(a), it could enact new legislation, which could then be constitutionally tested. According to Judge Dyk, the majority’s decision left the government with no authority to prevent the registration of even the most patently obscene marks. Nevertheless, nothing suggested that the appellant’s mark was obscene, and for that reason, the concurrence agreed that the Board’s decision had to be reversed.

The case is No. 2015-1109.

Attorneys: John R. Sommer (John R. Sommer, Attorney at Law) for Erik Brunetti. Nathan K. Kelley, U.S. Patent and Trademark Office, for Joseph Matal.

MainStory: TopStory Patent FedCirNews

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