SCOTUS Agrees to Hear Case Determining Federal Registrability of Immoral and Scandalous Trademarks

Thus, it was not unexpected when the Federal Circuit ruled in December 2017 that the vulgar and “scandalous” mark FUCT was constitutionally-protected, private expression under the First Amendment, and overturned the 2014 decision of the Trademark Trial and Appeal Board (the administrative body for the USPTO) denying federal registration of the mark. The Federal Circuit deemed the ban on scandalous and immoral trademarks to be a content-based restriction that discriminates against entire types of speech, and held that the USPTO could not meet its burden of identifying a governmental interest in upholding the restriction.

It thus came as a surprise when the USPTO appealed the Brunetti decision to the Supreme Court, which rarely hears trademark registrability cases, much less cases about arguably similar registrability issues. Commentators suspected the Supreme Court would simply deny the government's petition and allow the Federal Circuit's decision to stand. The odds were also not in the government's favor, as the Supreme Court only grants a miniscule amount — typically between 2% and 5% — of the petitions for writ of certiorari filed each year.

Speculation is now rampant as to what the Court's decision to hear the case means. If the Court does uphold the Federal Circuit's decision negating Section 1052(a)'s ban on the federal registration of scandalous and immoral trademarks, does that mean the Register will be overrun with profane marks? The short answer is, probably not. Such marks are usually not marketable for most companies, although a minority find the shock value of marks such as FUCT, DIRTY DICK'S CRAB HOUSE and AMERICAN AS F*CK to be a key point of their brand's identity.

The outliers aside, it is unlikely that removing the Lanham Act's prohibition on the federal registration of scandalous and immoral marks will result in a flood of applications. The Tam decision did not result in a significant increase in applications for disparaging trademarks, given the relatively rare market occurrence of such brands and their evolving political (in)acceptance. For example, the Cleveland Indians professional baseball team announced in 2018 that it was ending the use of its “Chief Wahoo” Indian head logo on the team's uniforms, as the design was “no longer appropriate.”

For those that do find a marketable value in such marks, these companies would be able to avail themselves of the benefits of federal registration for their formerly unregistrable brands — including the right to use the federally-recognized ® registration symbol and its associated marketing cachet, increased statutory damages in litigation matters, the ability to register the mark with U.S. Customs for enforcement, national notice to third parties of the mark's ownership, and the presumptions of the mark's nationwide priority and validity, just to name a few.

In addition, the ability to obtain a federal registration for a scandalous or immoral trademark may fall short of other practical considerations, such as state or local regulations barring such business names or slogans. The New Hampshire town of Keene recently deemed signage for Vietnamese restaurant “Pho Keene Great” (the Vietnamese soup “pho” is pronounced “fuh”) as violating local and building lease regulations, in addition to inciting public complaints. Even if this mark may be federally registrable if the Supreme Court upholds the Federal Circuit's Brunetti holding, that registration will be of little value to the restaurant owner if it cannot display the mark at its physical location.

Finally, the Court's decision in this case may be indicative of its willingness to dismantle (or update, depending on one's view) the federal Trademark Act, which, prior to the Tam decision, had seen little change to its Section 2 recitation of unregistrable trademarks since its enactment in 1946. Section 2 sets out that the following trademarks are unregistrable on the federal Principal Register:

(a) marks that are (i) immoral, deceptive, or scandalous, (ii) falsely suggestive of a connection with unrelated persons, institutions, beliefs, or national symbols, or (iii) a geographical indication identifying a place other than the origin of the goods;

(b) marks that consist of, comprise, or simulate the flag, coat of arms, or other insignia of the United States, any state or municipality, or any foreign nation;

(c) marks that consist of or comprise the name, portrait, or signature of any living individual without written consent, or of any deceased U.S. President during the life of his widow without written consent;

(d) marks that is likely to cause confusion, mistake, or deception with regard to a valid trademark registered or used in the U.S.;

(e) marks that are (i) merely descriptive or misdescriptive of the applicable goods; (ii) primarily geographically misdescriptive of the goods; (iii) primarily geographically deceptively misdescriptive of the goods; (iv) merely surnames; or (v) comprised of functional matter.

The overarching goal of the Lanham Act is to protect consumers from marketplace confusion, and to protect brands from potential infringers. If the Supreme Court strikes Section 2's bar on the federal registration of “immoral and scandalous” trademarks — particularly so quickly after doing so for disparaging marks — could it follow that other aspects of Section 2 are now ripe for attack? Owners of geographically descriptive or surname marks (as just two examples) may wish to take note!

Even if the registration of scandalous and immoral trademarks is not a market concern for the majority of business owners, this case continues to be a fascinating one to watch for U.S. practitioners. The Supreme Court's eventual decision should hopefully bring some additional clarity to this area of U.S. trademark law, and will certainly make for interesting reading.

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Dana N. Justus is an associate in Sterne Kessler's Trademark & Brand Protection Practice where she focuses on U.S. and international trademark clearance, prosecution, enforcement, and portfolio management for clients in a wide variety of industries. She has significant experience in civil litigation related to trademark and copyright matters in federal district court and administrative proceedings at the Trademark Trial and Appeal Board (TTAB) and International Trade Commission (ITC). Monica Talley is a director and heads Sterne Kessler's Trademark & Brand Protection Practice. For more than 20 years she has specialized in strategic trademark counseling and portfolio enhancement, developing anti-counterfeiting solutions and strategies, and resolving trademark disputes. Monica is particularly sought after for her expertise in enforcing brand rights against infringers and counterfeiters seeking to profit from her clients' well-known brands.