U.S. trademark attorneys received a New Year’s surprise last month when the Supreme Court of the United States agreed to hear Iancu v. Brunetti, the case that should determine the availability of federal trademark registration for “immoral” and “scandalous” marks – in this instance, the acronym “FUCT” for a clothing line. Brunetti will mark the second trademark case before the Court in three years that evaluates the constitutionality of the federal ban on registering certain categories of marks under Section 1052(a) of the Lanham Act.

The Court’s interest in this case is particularly intriguing after its June 2017 decision in Matal v. Tam, in which it upheld the U.S. Court of Appeals for the Federal Circuit’s 2014 holding that Section 1052(a)’s ban on the registration of “disparaging” marks violated the First Amendment of the U.S. Constitution’s protection for free speech. The Tam case concerned the mark “THE SLANTS,” the name of an Asian-American rock band, although a parallel case about the “REDSKINS” mark for the name of the Washington, D.C. professional football team received the lion’s share of media coverage and public interest.

After the Tam decision, most assumed that federal courts – and, in particular, the Federal Circuit, as the U.S.’s highest-ranking court (other than the Supreme Court) for intellectual property matters – would view “immoral” and “scandalous” trademarks, which are included alongside “disparaging” marks in Section 1052(a), as similarly protected speech, and similarly nullify the ban on their registration with the U.S. Patent and Trademark Office.

Following suit, the Federal Circuit ruled in December 2017 that the vulgar and “scandalous” mark FUCT was constitutionally-protected, private expression under the First Amendment, overturning the Trademark and Trial Appeal Board’s 2014 decision denying federal registration of the mark. The Federal Circuit deemed the ban on scandalous and immoral trademarks to be a content-based restriction that discriminates against entire types of speech, and held that the USPTO could not meet its burden of identifying a governmental interest in upholding such a restriction.

Many were surprised when the USPTO appealed the Brunetti decision to the Supreme Court, assuming that the Court – which rarely hears trademark cases, much less cases about arguably similar registrability issues – would deny the government’s petition and allow the Federal Circuit’s decision to stand. The odds were also not in the government’s favor, as the Supreme Court only grants a miniscule amount – typically between two and five percent – of the petitions for writ of certiorari filed each year.

If the Court does uphold the Federal Circuit’s decision negating Section 1052(a)’s ban on the federal registration of scandalous and immoral trademarks, what does that mean for U.S. trademark owners and counsel? Well, for most – not much. Such marks are usually not marketable for most companies; although a minority find the shock value of marks such as FUCT, DIRTY DICK’S CRAB HOUSE, and AMERICAN AS F*CK to be a key point of their brand’s identity. It is unlikely, however, that removing the Lanham Act’s prohibition on the federal registration of scandalous and immoral marks will result in a flood of applications; the Tam decision did not result in a significant increase in applications for disparaging trademarks, given the relatively rare market occurrence of such brands and their evolving political (in)acceptance. For example, the Cleveland Indians professional baseball team announced in 2018 that it was ending the use of its “Chief Wahoo” Indian head logo on the team’s uniforms, as the design was “no longer appropriate.”

In addition, the ability to obtain a federal registration for a scandalous or immoral trademark may fall short of other practical considerations, such as state or local regulations barring such business names or slogans. The New Hampshire town of Keene recently deemed signage for Vietnamese restaurant “Pho Keene Great” (the Vietnamese soup “pho” is pronounced “fuh”) as violating local and building lease regulations, in addition to inciting public complaints. Even if this mark may be federally registrable if the Supreme Court upholds the Federal Circuit’s Brunetti holding, that registration will be of little value to the restaurant owner if it cannot display the mark at its physical location.

Even if the registration of scandalous and immoral trademarks is not a market concern for the majority of business owners, this case continues to be a fascinating one to watch for U.S. practitioners. The Supreme Court’s eventual decision should hopefully bring some additional clarity to this area of U.S. trademark law, and will certainly make for interesting reading.

This article appeared in the February 2019 issue of MarkIt to Market. To view our past issues, as well as other firm newsletters, please click here.