The End for “Scandalous” and “Immoral” Trademarks?

The U.S. Supreme Court has struck down the U.S.P.T.O.’s long-standing ban on the registration of trademarks comprising “scandalous” and/or “immoral” trademarks (read here). Petitioner Erik Brunetti has tried to register the mark F-U-C-T for a clothing line and claimed that the mark should be pronounced as four letters, one after the other. For obvious reasons, the Court, and everyone else, considered a more obvious interpretation.

In a way, the outcome was almost preordained by the Court’s previous ruling in Tam v. Matal (read here), which struck down the prohibition against “disparaging” trademarks. In that case, an Asian-American band had tried to register the mark SLANTS and had been refused by the trademark office. In Tam, the Court found the ban on “disparaging” trademarks to be a clear case of “viewpoint discrimination,” where one viewpoint on an issue is allowed while another is banned, which is almost always a violation of the First Amendment.

There may be a bit more to the story. In Brunetti, the Court seemed troubled by the policy’s conflation of “immoral” and scandalous,” reasoning that while moral opinions would be a clear case of viewpoint discrimination, a ban on scandalous trademarks might better be classed as “means of expression,” and therefore susceptible to some regulation. Clear point taken – if the concept of U.S.P.T.O regulation of trademark content is to survive, then Congress is going to have to split off the “scandalous” concept into a stand-alone rule.

In our opinion, the Brunetti ruling probably has more sociological significance than business relevance. It’s a further recognition that there is no longer a broad social consensus on appropriate expression, and perhaps even behavior. Without such a social consensus, the role of rule-making in the areas of morality makes little sense.

BUSINESS TAKE-AWAY: Frankly, the business implication of this ruling may be limited. The number of businesses that will profit (literally!) from shocking or over-the-top trademarks is probably relatively small and will be limited to industries where shock value increase marketability. A more important issue to come in the courts, and one that we will follow, is whether the courts will allow the U.S.P.T.O. to continue denying trademarks to state legal, but federally illegal, businesses, i.e., the cannabis business?

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