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Court Ruling Allows Consumers, Not Bureaucrats, To Regulate ‘Scandalous’ Trademarks

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Court Ruling Allows Consumers, Not Bureaucrats, To Regulate ‘Scandalous’ Trademarks

On 12.27.17 10:43 AM posted by John-Michael Seibler

Should federal bureaucrats be able to reject trademarks for brand names that they consider “immoral” or “scandalous”?

On Dec. 15, in*In re Erik Brunetti, the U.S. Court of Appeals for the Federal Circuit said “no,” ruling that the First Amendment leaves consumers to decide which brands are too offensive to buy—without help from lawyers in Washington.

A federal law called the Lanham Act prohibits registering trademarks that are immoral or scandalous. Lawyers at the U.S. Patent and Trademark Office handle any such inquiry by asking whether a “substantial composite of the general public” would find a proposed mark “shocking to the sense of truth, decency, or propriety; disgraceful; offensive; disreputable; … or calling out for condemnation.”

Or, more simply, the Patent and Trademark Office may deny a trademark that “contemporary attitudes” deem “vulgar.”

In 2011, Erik Brunetti sought a federal trademark for a clothing brand that he founded in 1990 under a sensational spelling of an expletive, “fuct.” Patent and Trademark lawyers refused to register the mark after they referenced multiple dictionaries and decided that the term is immoral or scandalous.

On appeal, the Federal Circuit agreed, finding Brunetti’s brand to be crass and offensive.

Nonetheless, the court held that the prohibition on immoral or scandalous trademarks violates the First Amendment.

Judge Kimberly Ann Moore, joined by Judge Kara Farnandez Stoll, wrote for the court that “[t]here are words and images that we do not wish to be confronted with, not as art, nor in the marketplace. The First Amendment, however, protects private expression, even private expression which is offensive to a substantial composite of the general public.”

It is a worthwhile policy debate to ask whether or not it is good for our culture to open the marketplace to vulgar trademarks.

That puts a greater onus on store owners to consider what goods and services they wish to sell, and on individuals, particularly parents, to assess what they and their children buy.

But the court’s opinion builds on the Supreme Court’s ruling in June, in*Matal v. Tam, that the Lanham Act’s similar “disparagement” provision violated the First Amendment’s free-speech clause.

That provision barred registering trademarks that “may disparage … persons, living or dead, institutions, beliefs, or national symbols, or bring them into contempt, or disrepute.” There, the Patent and Trademark Office rejected Simon Tam’s bid for federal trademark registration of the name of his Asian rock group, the Slants, because it thought that the term disparaged Asians — like Tam and his bandmates.

Justice Samuel Alito*wrote for a plurality of the court (joined by Chief Justice John Roberts and Justices Clarence Thomas and Stephen Breyer), that “[s]peech may not be banned on the ground that it expresses ideas that offend.”

Alito continued, “The proudest boast of our free-speech jurisprudence is that we protect the freedom to express ‘the thought that we hate.’”

The court rejected the government’s argument that it can restrict trademarks because they are government speech, just like state advertising.

The court was also unpersuaded by the government’s theory that trademark registration is a federal subsidy or program that confers broad authority to restrict trademarks that it finds offensive.

Heritage senior legal fellow Alden Abbott*wrote that “by enhancing legal protection for a wider variety of trademarks, the Tam decision has paved the way for the expansion of mutually beneficial marketplace transactions, to the benefit of consumers and producers alike.”

Heritage legal scholar Elizabeth Slattery also wrote that the court’s decision in Tam “continues the trend of cases extending First Amendment protection for offensive speech, such as burning crosses, animal ‘crush’ videos, violent video games, lying about military honors, and the Westboro Baptist Church protesting military funerals.”

In In re Erik Brunetti, the Federal Circuit carried that trend one step further, finding that the Supreme Court’s reasoning in Tam applied with equal force to the Lanham Act’s “immoral or scandalous” provision.

In order to restrict speech based on its content, the government must prove that its restriction is “narrowly tailored” to advance “a compelling interest.”

The court found that the government’s only asserted interest for prohibiting “immoral or scandalous” trademarks was “protecting public order and morality”—and that did not pass muster.

The court also wrote that the provision could not pass the lower standard, established in Central Hudson Gas & Electric Corporation v. Public Services Commission of New York*(1980), for restrictions on commercial speech, which must be “narrowly drawn” to further a “substantial interest.”

The court found that the Lanham Act’s “immoral or scandalous” provision failed that test in part because the Act does not prevent parties from branding products with a mark of their choosing and advertising them to the public.

“In this electronic/Internet age,” the court wrote, “to the extent that the government seeks to protect the general population from scandalous material, with all due respect, it has completely failed.”

The “immoral or scandalous” provision was also doomed, at least in the court’s eyes, because it was too subjective and inconsistently enforced.

Even the Patent and Trademark Office once called “the determination of whether a mark is scandalous or disparaging” a “necessarily … highly subjective” inquiry. And “it is largely because governmental officials cannot make principled distinctions in this area,” the court continued, “that the Constitution leaves matters of taste and style so largely to the individual.”

The Patent and Trademark Office’s long history of approving some offensive marks while rejecting similar ones, evidenced by pages of vulgar trademarks included in the Federal Circuit’s opinion, confirms its subjectivity.

In his concurring opinion, Judge Timothy Dyk wrote that he would limit “the immoral-scandalous provision’s scope to obscene marks in order to preserve its constitutionality.”

Judge Dyk’s approach may have comforted those who would rather keep nasty products from coming soon to a store near them. But Judge Moore wrote for the court that “[w]hile the legislature could rewrite the statute to adopt such a standard, we cannot.”

Only Congress can amend a law. That remains true no matter how prudent an amendment might be.

So, the court’s ruling allows businesses to register trademarks that previously may have been prohibited as immoral or scandalous.

That may worsen the unfortunate trend, which economist Walter Williams recently described for The Daily Signal, of the coarsening of American culture.

But as Williams wrote, “Society’s first line of defense is not the law, but customs, traditions, and moral values … behavioral norms—mostly transmitted by example, word of mouth, and religious teachings.”

Now, consumers, rather than a small group of federal agency lawyers, will have greater responsibility to decide what goods and services are too vulgar for them and their families.

The post Court Ruling Allows Consumers, Not Bureaucrats, To Regulate ‘Scandalous’ Trademarks appeared first on The Daily Signal.

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