Intellectual Property

Foul Ball? The Real Consideration When Dealing With 'Scandalous' And 'Immoral' Trademarks

Whether SCOTUS will side with the trademark applicant is one thing, but the other consideration that companies need to address is whether they actually want to tread in that territory even if they can acquire federal trademark registration.  

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(Image via Shutterstock)

Sometimes you need to be careful what you wish for, and when it comes to trademarks, that maxim could not be more true. By now, you may have heard that the Supreme Court of the United States (SCOTUS) on Monday, April 15th, will be hearing oral arguments in Iancu v. Brunetti, a trademark case involving the USPTO’s refusal to register the trademark “FUCT”.  Whether SCOTUS will side with the trademark applicant is one thing (and I think it will), but the other consideration that companies need to address is whether they actually want to tread in that territory even if they can acquire federal trademark registration.  Such decisions should not be taken lightly – it’s very easy to swing and miss, and even if you get a hit, it may not be a fair ball.

Oddly, this is not untrodden territory for SCOTUS – within the last few years, SCOTUS ruled in favor of the lead singer-applicant for the Asian American band The Slants regarding the application for federal registration of the band name.  Under Section 2(a) of the Lanham Act, a trademark is not federally registrable where such trademark”[c]onsists of or comprises immoral, deceptive, or scandalous matter; or matter which may disparage or falsely suggest a connection with persons, living or dead, institutions, beliefs, or national symbols, or bring them into contempt, or disrepute….”. Originally refused registration by the USPTO based upon this prohibition on “disparaging” trademarks, the lead singer-applicant, Simon Tam, appealed to the Trademark Trial and Appeal Board (TTAB); however, the TTAB sided with the Examining Attorney and refused federal registration.  Mr. Tam then plead his case to the Court of Appeals for the Federal Circuit (Federal Circuit), changing tactics and focusing on whether the Lanham Act’s prohibition on disparaging trademarks was unconstitutional.  The court ruled en banc in favor of Mr. Tam, finding the “disparaging” trademark prohibition unconstitutional under the First Amendment, failing to meet the strict (or even the intermediate) scrutiny standard to justify the government’s restriction on such speech.

When the matter got to the SCOTUS in Matal v. Tam, the court unanimously ruled in favor of the lead singer-applicant/band that the Lanham Act’s prohibition on disparaging trademarks was an unconstitutional restriction on the First Amendment’s Free Speech Clause.  Even though the term “Slants” is a derogatory term for people of Asian decent, the court basically stated that it should not matter when it comes to federal trademark registration.  This point was driven home by Justice Kennedy’s in that case: “The central purpose of trademark registration is to facilitate source identification . . . Registered trademarks do so by means of a wide diversity of words, symbols, and messages. Whether a mark is disparaging bears no plausible relation to that goal.” Unfortunately, that decision did not expressly address the Lanham Act’s other prohibitions on “scandalous” or “immoral” trademarks.

How this matter reached the SCOTUS is not hard to understand as a result – the matter stems from the popular brand “FUCT” owned by Los Angeles-based artist Erik Brunetti and in use since 1991.  According to Mr. Brunetti, the term is to be pronounced with its individual letters “F-U-C-T”, and in fact, is far removed from a vulgar term because he claims that the brand, if anything, stands for “Friends U Can’t Trust”.  That said, the refusal to register stems from this term being “scandalous” or “immoral” – an arguably ambiguous swath of potential trademarks when you think about it.  That said, it is hard to imagine the SCOTUS taking a position that would be contrary to their decision in Matal v.  Tam.  Similar to Mr. Tam and The Slants, the Federal Circuit ruled in favor of Mr. Brunetti in 2017.  None of the arguments that are to be proffered by the government in the present case appear any more compelling than those presented previously in Matal v. Tam. In fact, there is every reason to believe that SCOTUS will rule in Mr. Brunetti’s favor as well based upon a similar rationale.

 

That leaves us with the question:  should your company (or client) seek to register a “scandalous” or “immoral” trademark if the Lanham Act prohibition if held unconstitutional?  That is a tricky question best answered as follows:  The fact that you can do something does not mean that you should do something.  Using such “scandalous” or “immoral” trademarks is a complicated brand decision that requires a good deal of market research and a rock-solid company identity.  I actually applaud Mr. Tam and his band, as well as Mr. Brunetti, for their positions – Mr. Tam’s band took control of a disparaging term for their racial background in tying it to their band identity, and Mr. Brunetti’s artistic expression has been carefully cultivated over 30 years and reflects the epitome of his free expression.  Not every company has the identity, let alone wherewithal, to build a brand on a controversial term.

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Further, the consumers to which such brands may be marketed is arguably smaller because not everyone will identify the same way (or at all) with a brand based upon a “scandalous” or “immoral” term or phrase.  By their very nature, such terms are likely going to offend some consumers.  I get that such consumers are obviously not the target for the brand, but that’s not the point – by using such terms as brand identifiers, your company (or client) is making a calculated decision to target a smaller segment of the consuming public. Simply put, using such marks is not for everyone, even if you may be able to federally register them in the near future.

Although there is a fair chance that SCOTUS will strike down the Lanham Act’s prohibition on “scandalous” and “immoral” trademarks, deciding whether your company (or client) should use them is not a simple decision.  Take the time to determine whether the proposed brand identifier is really tied to the corporate identity and target market. Hits don’t happen in foul territory – make sure that if you are stepping up to the plate with a “scandalous” or “immoral” trademark, you make contact in the sweet spot. Anything else is just another foul ball.

Tom Kulik is an Intellectual Property & Information Technology Partner at the Dallas-based law firm of Scheef & Stone, LLP. In private practice for over 20 years, Tom is a sought-after technology lawyer who uses his industry experience as a former computer systems engineer to creatively counsel and help his clients navigate the complexities of law and technology in their business. News outlets reach out to Tom for his insight, and he has been quoted by national media organizations. Get in touch with Tom on Twitter (@LegalIntangibls) or Facebook (www.facebook.com/technologylawyer), or contact him directly at tom.kulik@solidcounsel.com.

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