On December 15, 2017, the Federal Circuit held that the Lanham Act’s prohibition of immoral or scandalous matter under 15 U.S.C. §1052(a) (“Section 2(a)”) is unconstitutional under the First Amendment. In re Brunetti, 877 F.3d 1330 (Fed. Cir. 2017). Judges Stoll and Moore wrote the opinion, with Judge Dyk concurring.

In 2011, Erik Brunetti attempted to register the mark “FUCT” for his clothing line. The examining attorney at the USPTO denied registration under Section 2(a) of the Lanham Act, finding the mark to be immoral or scandalous.

Unable to persuade the examining attorney to reconsider the refusal of registration, Mr. Brunetti appealed to the Trademark Trial and Appeal Board (“Board”), which affirmed. In reaching its decision, the Board consulted references such as Urban Dictionary and Google Images. Both references associated the word “fuct” with vulgar material. In particular, the Board stated that Mr. Brunetti’s use of the mark would implicate “strong and often explicit, sexual imagery that objectifies women and offers degrading examples of nihilism…” Slip op. at 5 (quoting J.A. 8-9).

On appeal, the Federal Circuit reversed the Board’s decision. The Federal Circuit held that while the Board correctly determined that the mark involved immoral or scandalous material, Section 2(a)’s prohibition of such subject matter is a violation of the Free Speech Clause of the First Amendment.

The Federal Circuit’s decision consisted of two parts: (1) a finding that the mark FUCT is vulgar and scandalous and (2) a finding that Section 2(a)’s bar on immoral or scandalous marks is unconstitutional. In the first part of the opinion, the court reviewed multiple dictionary definitions that the Board relied upon, as well as the Board’s finding that Mr. Brunetti’s mark is used on his products, such as T-shirts, to convey “an unmistakable aura of negative sexual connotations.” Slip op. at 6-7. Mr. Brunetti attempted to counter these findings by arguing, among other things, that his brand name is not vulgar because it stands for “Friends yoU Can’t Trust” and that a vulgar mark is not a scandalous or immoral mark under Section 2(a). Slip op. at 8-9. The Federal Circuit was not persuaded.

In the second part of the decision, the Federal Circuit considered whether Section 2(a)’s bar of registration for immoral or scandalous marks is unconstitutional. The government argued that trademark registration is a government subsidy program or a limited public forum and, in the alternative, that trademarks are subject to government regulation as commercial speech.

The Federal Circuit rejected the government’s assertion that trademark registration is a government subsidy program to which the government can constitutionally attach conditions, such as Section 2(a)’s prohibitions on trademarks. Slip op. at 14-15. The Federal Circuit stated that trademark registration is not a government subsidy because it does not implicate Congress’ power to spend funds. Instead, trademark registration fees cover the operating expenses of the trademark registration program. The Federal Circuit further pointed to the July 2017 Supreme Court decision in Matal v. Tam (137 S. Ct. 1744 (2017)), which held that trademark registration was not a government subsidy. Moreover, the court said that government regulation of trademarks under a limited public forum analysis was inapplicable because trademarks are not tied to government-owned property.

Second, the Federal Circuit rejected the government’s argument that it could constitutionally regulate trademarks as commercial speech. The government failed to show a substantial interest in regulating trademarks of a scandalous or immoral nature. The court cited Tam in particular, stating that “[t]he Supreme Court’s decision in Tam supports our conclusion that the government’s interest in protecting the public from off-putting marks is an inadequate government interest for First Amendment purposes” and “All of the government’s proffered interests boil down to permitting the government to burden speech it finds offensive.” Slip op. at 31 and 38.

Judge Dyk concurred in the judgment but recommended a narrowed construction of Section 2(a) that could withstand a First Amendment challenge. Namely, he recommended changing the statute to regulate for “obscene” trademarks. Since obscenity is not protected by the First Amendment, such a statute would leave the government with one mode of preventing registration of certain trademarks.

What This Means for You

The In re Brunetti decision widens the range of registerable trademarks. Trademarks that have immoral or scandalous associations can now be registered (assuming they meet the other requirements for registration). This decision comes on the heels of the July 2017 Supreme Court decision in Matal v. Tam, in which the Supreme Court unanimously held that the Lanham Act’s provision against registration of disparaging marks violates the Free Speech Clause of the First Amendment. In that case, a trademark applicant sought to register the mark “THE SLANTS,” which is sometimes used as a derogatory term for people of Asian descent, for use in connection with “live performances by a musical band,” whose band members all happened to be Asian. The Federal Circuit reversed the Board’s denial of the mark, citing the Free Speech Clause of the First Amendment. The Supreme Court affirmed the Federal Circuit’s decision. Much of the reasoning in In re Brunetti tracks the Supreme Court’s logic in Tam.

For some trademark owners, the Brunetti decision may encourage a rush for registration of previously unregisterable marks. However, for most companies, Brunetti seems unlikely to have much of an impact, except for marks involving truly “edgy” advertising campaigns.