In a decision surprising absolutely nobody, on Monday the Supreme Court ruled that the U.S. Patent and Trademark Office (USPTO) could not refuse to register trademarks even if they are  “immoral or scandalous.”  The trademark at issue involved the use of the mark “FUCT [F-U-C-T]” for clothing and merchandise.

The Court held that the First Amendment right to free speech trumps Section 1052(a) of Lanham Act (Section 2(a)), which prohibits the use of “immoral, deceptive, or scandalous matter; or matter which may disparage….”

The Slants, the Washington Redskins and Free Speech vs. Disparaging Trademarks

The Court’s recent decision was merely the final domino to topple in the domino chain reaction that started back in 2010 when Simon Shiao Tam, the lead singer for an Asian rock band attempted to register “The Slants” as the name of the band.  The USPTO rejected The Slants’ application, finding it was disparaging to people of Asian descent.  Tam appealed, and the Federal Circuit Court ultimately held that the USPTO’s refusal to register the trademark violated Tam’s First Amendment right to free speech. The Supreme Court affirmed the Federal Circuit Court’s decision, holding that the disparagement clause of  Section 2(a) “violates the Free Speech Clause of the First Amendment.”

The Supreme Court’s Tam decision effectively rescued the Washington Redskins’ trademarks, which the USPTO was in the process of cancelling as disparaging to Native Americans.

The FUCT Trademark, and the Final Domino

The Slants and Washington Redskins’ trademarks addressed Section 2(a)’s prohibition of disparaging trademarks, but the FUCT trademark attacked Section 2(a)’s prohibition of “immoral or scandalous matter….”  When Erik Brunetti sought to register the mark FUCT for his clothing brand, the USPTO refused to register the mark, finding that “‘FUCT’ is the past tense of the verb ‘fuck,’ a vulgar word, and is therefore scandalous.”  Brunetti appealed, the Federal Circuit agreed that the mark FUCT is vulgar, but followed the Supreme Court’s Slants decision, holding that “the bar in Section 2(a) against immoral or scandalous marks is unconstitutional because it violates the First Amendment.”

Justice Kagan, writing for a 6-3 majority, held that “the Lanham Act’s prohibition of ‘immoral [ ] or scandalous’ trademarks violates the First Amendment.”  The Court noted that historically the USPTO would refuse to register a mark if the mark was “shocking to the sense of truth, decency, or propriety” or “giving offense to the conscience or moral feeling.”  The Court noted and did not disagree with the USPTO’s conclusion that the FUCT mark “flunked the test” and was “a total vulgar.”  However,  Brunetti brought a facial challenge, basically conceding that his mark was vulgar but arguing that the “immoral or scandalous” prohibition violated his First Amendment right to free speech.  The Supreme Court agreed that Section 2(a)’s prohibition of immoral and scandalous marks is unconstitutional.

As I wrote last year, the Court’s decision is likely to spur a race to the bottom, with certain businesses seeking to gain attention and market share via shocking, vulgar and/or scandalous trademarks from the USPTO.

Last year I wrote about the United States Patent and Trademark Office (USPTO) taking the position that even when it lost, the other side had to pay its attorneys’ fees.

Today, the Federal Circuit Court issued a decision rejecting the USPTO’s position.  In a split decision, the Court found that the “American Rule [that parties only pay their own attorneys] prohibits courts from shifting attorneys’ fees from one party to another absent a ‘specific and explicit’ directive from Congress” and that the language relied on by USPTO “falls short of this stringent standard.”

In Nankwest, Inc. v. Matal,(E.D. Virginia 2016) 162 F. Supp.3d 540, the USPTO rejected a patent application and the applicant appealed the USPTO’s decision to a federal district court. The district court partially affirmed and partially denied the USPTO’s decision.  The USPTO filed a motion to recover its costs from the patent applicant, including its attorneys’ fees, but the trial court refused to award the USPTO its attorneys’ fees.  The USPTO appealed to the Federal Circuit, which reversed and awarded the USPTO its attorney’s fees, finding that even when the USPTO lost, it was entitled to recover its attorneys’ fees.

That decision was widely criticized and the Federal Circuit withdrew its earlier decision and reviewed the issue en banc. On July 27, the Federal Circuit issued its en banc decision that the USPTO cannot recover its attorneys’ fees from applicants that appeal USPTO decisions to the federal courts, even when the applicant loses: “The American Rule is a bedrock principle of this country’s jurisprudence” that “in the United States each litigant pays his own attorney’s fees, win or lose.”  So as it’s often been asserted, in litigation everybody loses except the lawyers.

It was only a matter of time.

THE “GOOD OLD DAYS” BEFORE DISPARAGING, VULGAR AND SCANDALOUS TRADEMARKS

For seventy years the United States Patent and Trademark Office (USPTO) refused to register marks that consisted of “immoral, deceptive, or scandalous matter; or matter which may disparage…..” citing § 2(a) of the Lanham Act.

Last June the Supreme Court struck down section 2(a)’s prohibition of disparaging marks and the other shoe just dropped when the Federal Circuit struck down its prohibition of vulgar, immoral or scandalous marks, allowing someone to register the mark FUCT.

The Slants Crush § 2(a)’s Prohibition of Disparaging Marks 

In 2010, Simon Shiao Tam, lead singer of the Oregon based Asian American rock band, sought to disarm the “toxic language and symbols” associated with the term “slants” by registering the mark “THE SLANTS” for the band.  The USPTO found the term disparaging to people of Asian descent and refused to register the mark under § 2(a).  Tam appealed, the Trademark Trial and Appeal (TTTBA) affirmed, Tam appealed, the Federal District Court initially affirmed the TTTBA’s decision, but later decided on its own to grant en banc review and reversed, finding that § 2(a) violated the First Amendment.  The USPTO still refused to register the mark and the Supreme Court granted certiorari.  In June 2017, the Supreme Court affirmed the Federal Circuit Court, holding that the disparagement clause of § 2(a) “violates the Free Speech Clause of the First Amendment.”

The Slants decision effectively rescued the Washington Redskins’ trademarks.  In 2014, the TTTBA decided to cancel the team’s registered trademarks, finding the term “Redskins” disparaging.  The team appealed to District Court, which affirmed the TTTBA’s decision, the team appealed to the Fourth Circuit and while the matter was pending, the Supreme Court issued its Slants decision.  Early this year the Fourth Circuit  reversed and remanded the district court, effectively ordering that the team’s marks be reinstated.

The Federal Circuit Orders USPTO to Register FUCT Mark, Striking Down Section 2(a)’s Prohibition of Vulgar, Immoral and Scandalous Marks 

In 2011, Erik Brunetti sought to register the mark FUCT for his clothing brand. The USPTO refused to register the mark, finding that “ ‘FUCT’ is the past tense of the verb ‘fuck,’ a vulgar word, and is therefore scandalous.”  Brunetti appealed to the TTAB.  The TTAB noted that Brunetti “used the mark in the context of ‘strong, and often explicit, sexual imagery that objectifies women and offers degrading examples of extreme misogyny’” and held the mark was “vulgar and therefore un registerable under section 2(a) of the Lanham Act.”

Brunettti appealed the TTAB decision to the Federal Circuit, which heard the appeal after the Supreme Court issued its Slants decision. In a ruling that rivals a South Park episode for the number of swear words, the Federal Circuit agreed with the TTAB that the mark FUCT is vulgar, but followed the Supreme Court’s Slants decision, holding that “the bar in § 2(a) against immoral or scandalous marks is unconstitutional because it violates the First Amendment.”   The Court rejected the USPTO’s argument, similar to its argument in the Slants case, that trademark registration is a government subsidiary, which allows the government some leeway in regulating speech.  The Court noted that “[t]here are countless songs with vulgar lyrics, blasphemous images, scandalous books and paintings, all of which are protectable under federal [copyright] law” and reversed the TTAB’s holding that the mark FUCT “is unregisterable under section 2(a).”

What’s Next for Vulgar and Scandalous Trademarks?

We are likely to see a race to the bottom. Much like shock jocks Howard Stern and Don Imus seek to increase market share with outlandish speech, some business owners are likely to see some value in garnering attention via shocking, vulgar and/or scandalous trademarks, and the USPTO will have no choice but to register those marks.

Since 1946, when the Lanham Act was enacted, the United States Patent and Trademark Office (USPTO) has denied registration of any trademark that “[c]onsists of … matter which may disparage [any] persons living or dead….” Today, the Supreme Court struck down this “disparagement clause,” finding that it violated the First Amendment.

Oregon Rock Band Blazes New Law

For seventy years, the USPTO relied on the disparagement clause to reject trademarks that were racially or ethnically offensive, but The Slants, a rock band from Portland, Oregon changed the law. The Slants’ lead singer, Simon Tam, sought to trademark the band’s name, seeking to reclaim the term by their “deliberate disarmament of toxic language and symbols.” (See The Slants’ Press Release on Tam Decision.)

The USPTO refused to register “The Slants,” citing the disparagement clause. Tam appealed to the Federal Circuit, which held that Section 2(a) was unconstitutional restraint of free speech under the First Amendment.

The USPTO Strikes Out

The Supreme Court granted certiorari, and today, Justice Alito issued the Court’s opinion holding that the disparagement clause “violates the Free Speech Clause of the First Amendment.”

The Court rejected three USPTO arguments: “(1) that trademarks are government speech, not private speech, (2) that trademarks are a form of government subsidy, and (3) that the constitutionality of the disparagement clause should be tested under a new ‘government-program’ doctrine.”

Because “[t]he Federal Government does not dream up these marks, and it does not edit marks submitted for registration” “it is far-fetched to suggest that the content of a registered mark is government speech.”

Next the Court rejected the USPTO’s argument regarding the “constitutionality of governmental programs that subsidize speech expressing a particular viewpoint.” The Court distinguished those cases because they “involved cash subsidies or their equivalent.”

The Court rejected the USPTO’s position that the trademark registration program “creates a limited public forum for private speech” because even in such cases “viewpoint discrimination is forbidden.”

Finally, the Court found that the disparagement clause fails even the relaxed First Amendment scrutiny applied to commercial speech. Citing the government interests of “encouraging racial tolerance” and “protecting the orderly flow of commerce,” the Court found that disparagement clause was not narrowly drawn and was therefore unconstitutional.

But What About the Washington Redskins?

The USPTO had deregistered the Washington Redskins’ trademark based on the disparagement clause. The team had appealed the USPTO’s decision, and the appeal is pending in the 4^th Circuit.  Today’s Tam decision will knock the legs out from the USPTO’s decision and should pave the way for the team to reclaim its trademark.

What About Section 2(a)’S Other Prohibitions?

Section 2(a) also precludes registration of any trademark that “consists or comprises immoral, deceptive or scandalous matter….” Presumably, the Court’s Tam decision will also preclude the USPTO from denying registration to marks that are immoral or scandalous. However, one would assume the prohibition on deceptive marks would survive, since it is consistent with other provisions in the Lanham Act precluding “deceptively misdescriptive” marks and marks that are “likely …to deceive.”

Could you write a legal opinion about Jimmy Buffett, Margaritaville and Marijaunaville without displaying any trace of a sense of humor? The United States Patent and Trademark Office (USPTO) did. The USPTO wrote a 30-page opinion about the singer, who’s backed by the Coral Reefer Band and has created “an island escapism lifestyle,” without a single pun, witticism or joke that might elicit even a smirk, much less a smile.

Rachel Bevis, the applicant, sought to register the trademark MARIJUANAVILLE for a variety of types of clothing to be sold in locations that support the legalization of marijuana. Jimmy Buffett’s company Margaritaville Enterprises, LLC filed an opposition, citing its use of the MARGARITAVILLE mark on a number of products, including clothing.

The USPTO applied the 12 DuPont factors, used for determining the likelihood of confusion between the applicant’s mark [MARIJUANAVILLE] and the existing mark [MARGARITAVILLE].

The USPTO reviewed Buffett’s epic career and his widespread “media and popular culture exposure” and concluded, in a gross understatement, that Margaritaville has established that its mark is “famous.”

Margaritaville enlisted an expert lexicographer and linguistic consultant to state the obvious, that “due to the shared linguistic properties of the two terms Margaritaville and Marijuanaville …are similar and may result in consumer confusion.” Apparently Margaritaville’s money was not well spent as the USPTO refused to rely on such testimony noting that “opinion testimony on the questions of likelihood of confusion is admissible, it is entitled to little or no weight.” With all the groove of a blown flip-flop, the USPTO conducted its own comparison and found:

[B]oth marks are similar insofar as they are  comparing the two “single term 14 letter marks comprises of five syllables, each commencing with the same letter string “mar-” and ending with the suffix “-ville.” As to their connotation and commercial impression, the record shows a public association between the two terms as representing a similar “state of mind” induced by either a cocktail or marijuana. According to the record, the suffix “-ville” is a slang term frequently combined with other words to denote a “state of being.”

The USPTO made no mention of the fact that marijuana is a Schedule 1 Controlled Substance and that the USPTO will not register trademarks for actual marijuana use. In fact, the USPTO has registered numerous trademarks for clothing and other goods and services that relate to marijuana or cannabis, so long as the goods and services do not relate directly to the sale of marijuana.

The USPTO sustained Margaritaville’s opposition and denied registration to MARIJUANAVILLE, concluding that “thus, the overall connotation and commercial impression of the marks is highly similar – a chemically induced mental paradise. The public is likely to perceive Applicant’s mark [MARIJAUNAVILLE] as an extension of Opposer’s lifestyle brand [MARGARITAVILLE]”

One can only hope that after this ordeal, Jimmy Buffett, the applicant, and maybe even the USPTO Judge, were able to chill on a beach somewhere, watchin’ the sun bake and get to their own “states of being.”

I previously wrote about a Supreme Court case pitting the United States Patent and Trademark Office (“USPTO”) and Section 2(a) of the Lanham Act against the First Amendment, the Federal Circuit, the Slants and, lurking in the wings, the Washington Redskins.

The USPTO filed its 92 page opening brief this week, repeating many of the same arguments rejected by the Federal Circuit.

Argument 1: Trademark Registration is a Privilege, Not a Right

The USPTO argues that “Section 1052(a) does not prohibit any speech but simply defines the criteria for participation in the government’s voluntary trademark program.” Citing the government’s right not to fund certain types of art or to disallow certain symbols on license plates, the USPTO argues “[t]he First Amendment does not require the federal government to assist those, who wish to sell products or services using racial slurs, religious insults or other disparaging marks.”

Argument 2: Banning Disparaging Marks Does Not Restrict Speech

The USPTO describes the history of the Lanham Act and the common-law rights a trademark owner holds even if he or she lacks federal trademark registration. The USPTO argues that “Section 1052(a) limits the marks that may be federally registered, but it does not restrict the mark holder’s ability to use its mark or to engage in any other speech.”

Argument 3: Section 1052(a)’s Ban On Disparaging Marks is Consistent with Other Constitutional Restrictions

Citing the government’s right not to participate where “government assistance will closely associate the government with offensive terminology,” the USPTO analogized to artists who have been denied federal arts funding, or proponents of specialty state license plates including the confederate flag.  “Registration of THE SLANTS would cause the mark to be published on the Principal Register; would cause a certificate  for the mark to be issued ‘in the name of the United States’ (which may be transmitted to foreign countries); and would entitle respondent to use the ® symbol to convey to the public that the mark has official status.”

Where Did the Washington Redskins Go?

The Washington Redskins asked the Supreme Court to join The Slants in opposing the USPTO, but the Supreme Court refused. The team’s case before the Fourth Circuit is stayed pending the outcome of the USPTO-The Slants decision.

What’s Next

The Slants will be filing their brief, along with a likely flood of amicus curiae briefs on either side, and then the matter will be heard by eight justices, unless a ninth supreme court justice is confirmed before oral argument.

INITIAL CALL ON THE FIELD

In June 2014, the U.S. Patent and Trademark Office (USPTO) stripped the Washington Redskins (Washington) of their federal trademarks, finding the term “Redskins” was disparaging under Section 2(a) of the Lanham Act.

REPLAY OFFICIAL CONFIRMS THE CALL

Washington sought an instant replay before the District Court for the Eastern District of Virginia, but that Court affirmed the USPTO’s initial call.  Washington then sought a replay in the Fourth Circuit Court of Appeals, but this week, while that decision was under review, Washington threw a Hail Mary pass, asking the Supreme Court to intercede even before the Fourth Circuit decides Washington’s appeal.

WASHINGTON’S END AROUND

Washington’s unorthodox move is the result of another scrimmage — this one between the USPTO and the Portland dance-rock band, The Slants. As discussed in our prior post,  The Slants, a band comprised of Asian Americans, tried to register their name with the USPTO, but the USPTO refused, citing Section 2(a).  The Slants appealed the USPTO decision, lost at trial, but then won when the Federal Circuit reversed , finding that Section 2(a) was unconstitutional restraint of free speech under the First Amendment.

JOINING A GAME ALREADY IN PROGRESS

Last week the USPTO petitioned the Supreme Court to settle whether Section 2(a) violates the First Amendment. The thrust of the USPTO’s argument is that The Slants (and by extrapolation Washington) have free speech to call themselves whatever they want; the government is not stopping them.  They just aren’t entitled to “federal trademark registration,” i.e., a stamp of approval for their use of “disparaging” names.

So Washington’s latest play is essentially joining The Slants to pile on the USPTO and knock Section 2(a) out of the trademark registration game.

Nobody knows, and that’s why the United States Patent and Trademark Office (USPTO) just filed a petition asking Supreme Court to settle its turf battle with the Federal Circuit Court.

Ancient History: No Disparaging Trademarks

From WWII until March of this year, the USPTO routinely refused to issue trademarks that it considered to be disparaging under Section 2(a) of the Lanham Act.  So it wasn’t big news in 2011 when the USPTO summarily rejected Simon Shiao-Tam’s trademark registration for his rock band, “The Slants.” Mr. Tam appealed the USPTO’s decision to the Federal Circuit, which initially upheld the USPTO’s decision, but later agreed to rehear the appeal en banc.

Quantum Leap: First Amendment Trumps Lanham Act’s Prohibition of Disparaging Trademarks 

But, as we previously reported, it was huge news last December when the Federal Circuit reversed its earlier opinion and the USPTO’s decision and held that Section 2(a) violated the First Amendment, effectively stripping the USPTO of its power to deny trademarks that it deemed disparaging.   Presumably the court’s decision also strikes down Section 2(a)’s prohibition of marks that are immoral or scandalous.

Early last month, the USPTO reacted to the court’s decision, issuing guidelines that trademark applications with Section 2(a) issues would be held in limbo “while the constitutionality of these provisions remains in question…”  Shortly thereafter, Mr. Tam filed a writ of mandamus asking the Federal Circuit to force the USPTO to register The Slants trademark.

Breaking News: The Suspense was Killing the USPTO

The Federal Circuit denied the writ, but today the USPTO petitioned the Supreme Court to resolve:

Whether the disparagement provision in 15 U.S.C. 1052(a) is facially invalid under the Free Speech Clause of the First Amendment.

Usually issues percolate up slowly over the course of years before they reach the Supreme Court, but with the Federal Circuit insisting that Section 2(a) is unconstitutional and the USPTO refusing to cede its authority to reject disparaging trademarks there’s really no place else to take the issue.  And until the issue is ultimately resolved, trademarks that the USPTO considers disparaging will continue to sit in limbo.  Four of the justices will need to vote to hear the USPTO’s petition and, absent the extremely rare issuance of an extraordinary writ (allowing accelerated briefing and oral argument), even if the Supreme Court grants certiorari the matter won’t be decided for some time.

We recently wrote about In re Tam, the Federal Circuit Court’s decision invalidating Section 2(a) of the Lanham Act.  The Court held that Section 2(a), which precludes trademark registration of immoral, deceptive, scandalous or disparaging trademarks, violates the First Amendment.  The Court ruled for The Slants, a Portland-based band comprised of Asian Americans who had sought to trademark their name, but whose trademark application had been rejected by the U.S. Patent and Trademark Office (USPTO)  as “disparaging.”

The Court’s decision could have wider implications, especially with regards to the Washington Redskins’ appeal to regain their trademark, which is pending before the Fourth Circuit, a “sister” court to the Federal District Court. In December, Simon “Young” Tam (the Tam in In re Tam) wrote this blog post sharing his views about media coverage of the case, including the desire of the media (and attorneys) to compare the case to the Redskins’ case and issues surrounding identity politics. It’s definitely worth a read!

The USPTO Strikes Back, Sort of

In response to the In re Tam decision, last week the USPTO decided that it would put trademark applications with Section 2(a) issues in limbo.  The USPTO issued  Examination Guidance 01-16, which advised that “while the constitutionality of these provisions remains in question and subject to potential Supreme Court review” the USPTO will handle trademark applications with section 2(a) problems by issuing an “advisory refusal and suspend action on the application.”

The Slants’ Full Court Press

But The Slants aren’t willing to wait. Yesterday The Slants filed a writ of mandamus petition asking the Federal Circuit Court to order the USPTO to immediately process The Slants’ trademark registration.

The $64,000 question is whether the Federal Circuit Court will grant The Slants’ petition, rather than wait for the issue to percolate up to the Supreme Court. One Court observer  has noted that in recent years the Federal Circuit Court has become more aggressive about issuing such extraordinary relief.

Blog note: Photo updated 3/16/2016

On December 22, 2015, in a potentially far-reaching decision, the Federal Circuit Court of Appeals held that Section 2(a) of the Lanham Act, which prohibits registration of disparaging trademarks, is unconstitutional under the First Amendment’s guarantee of free speech. While perhaps the most publicized “disparaging trademark” controversy this year centered around the Washington Redskins, whose trademark registrations were cancelled earlier this year in a decision upheld by a federal district court (the case is currently on appeal to the Fourth Circuit), this case before the Federal Circuit involved Simon Shiao-Tam, who applied to register the name of his band, “The Slants,”  for trademark protection.

Though the Portland-based band is comprised of Asian American musicians who had previously stated that the name’s intent was to reclaim the word, the U.S. Patent and Trademark Office (USPTO) refused to register the mark based on Section 2(a)’s prohibition against registration of trademarks that consist of “immoral, deceptive, or scandalous matter; or matter which may disparage…persons, living or dead, institutions, beliefs, or national symbols, or bring them into contempt, or disrepute.” This decision was affirmed by the USPTO’s Trademark Trial and Appeals Board.

Ironically, in the initial appeal of the matter to the Federal Court, neither Tam nor the government focused on the First Amendment argument. At oral argument in the initial appeal in January 2015, Judge Kimberly Ann Moore (who is also a Washington Redskins fan) invited the government’s attorney to discuss the First Amendment issue, which the attorney declined to do.  Writing for the majority, Judge Moore affirmed the USPTO’s refusal to register the mark, finding that there was substantial evidence supporting the USPTO’s finding that the term “The Slants” was disparaging and also rejecting Tam’s backup argument that Section 2(a) was a violation of the First Amendment. The Federal Circuit stated that it was bound by precedent, namely a prior 1981 case (In re McGinley) that had held the government’s refusal to register a disparaging mark does not prevent a party from using it (and therefore, there was no First Amendment violation). See the April 2015 opinion In re Tam.

However, in that same decision, in a lengthy section entitled “additional views,” Judge Moore urged the Court to revisit In re McGinley and to reexamine the First Amendment issue. Thereafter, the Court of Appeals decided on its own, and without the request of the government or Mr. Tam, to review the decision en banc before a full panel of judges and ordered briefing on the First Amendment question, leading to this latest decision.  Although not binding on the Fourth Circuit Court of Appeals, which will be hearing the Washington Redskins’ appeal next year, the Fourth Circuit could be persuaded to reverse the USPTO’s cancellation of the Redskins’ trademark registrations.

A full copy of the Federal Circuit’s en banc opinion can be accessed here.