THE IP GUIDE: Another federal decision broadens trademark protection

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The courts have been busy lately reviewing federal trademark law. Understanding new decisions and recent trends is important for all growing businesses, since company brands, logos, and slogans are oftentimes their most valuable assets.

Recent federal cases have broadened the types of trademarks that can be protected under federal law, giving potential mark-holders the option of registering marks that were previously not entitled to protection.

This past June, the United States Supreme Court issued its decision in Matal v. Tam, striking down the previous ban on registering allegedly disparaging trademarks, in accordance with 15 U.S.C. § 1052(a), known as the disparagement clause. Under that section, the USPTO could refuse registration to an applicant’s mark if it was found to “disparage” any “person, living or dead.” The Supreme Court found the section violated the First Amendment’s free-speech clause.

The Matel v. Tam decision has led to a recent victory for the Washington Redskins football team, which has been embroiled in litigation for years over the claimed offensiveness of its team name and logo, which certain groups found disparaging to Native Americans. The Tam decision paved the way for the Redskins name to keep federal protection, and will now give other mark-holders the ability to register allegedly disparaging marks that were never previously protectable.

The trend towards favoring a mark-holder’s expression in its brands has continued with a recent decision issued this past December by the U.S. Court of Appeals for the Federal Circuit, which has exclusive jurisdiction over most intellectual-property disputes. In In re Brunetti, the federal circuit struck down the Lanham Act’s ban on “immoral . . . or scandalous” marks.” Like the Supreme Court in Matel v. Tam, the federal circuit found that the ban on these types of marks violated the First Amendment’s free-speech clause and that mark-holders should be free to express their brands, and identify their products, even if doing so would mean registering possibly vulgar trademarks.

The Brunetti case arose from Erik Brunetti’s attempt to register the mark “FUCT” for his apparel company. The USPTO examiner assigned to review Brunetti’s application refused to register the mark pursuant to the provision banning registration for “immoral” or “scandalous” marks. The Trademark Trial and Appeal Board, also known as TTAB, affirmed the examiner’s decision. TTAB relied on street definitions of the term “FUCT,” including those found on the slang-dictionary website Urbandictionary.com, and Google-images searches showing that the mark was used in “strong, and often explicit, sexual imagery that objectifies women” and “offer[ed] degrading examples of extreme misogyny.” TTAB believed this evidence was substantial in showing that the mark was “vulgar” and, therefore, affirmed the USPTO’s decision to refuse registration.

On appeal, the federal circuit agreed that the evidence submitted supported the TTAB’s finding that the mark was “vulgar,” pursuant to prevailing law in the circuit. The court however reversed the TTAB’s decision, finding that the ban on such marks again violated the First Amendment.

The government, advocating upholding the TTAB’s decision, made almost identical arguments as in Matel v. Tam—that the government had the right to police trademark registrations as a form of commercial speech, since registration on the Principal Register was either a public subsidy or limited public forum. These arguments were unsuccessful. The federal circuit believed the Lanham Act’s ban on “immoral” or “scandalous” marks “regulates the expressive components of speech, not the commercial components of speech.” It therefore reviewed the section under a strict-scrutiny standard of review, which the government could not, and did not try to overcome.

The federal circuit, nonetheless, found that the ban would have failed under a lower, intermediate standard of review since it did not promote a substantial government interest. Specifically, the panel found that “the government’s interest in protecting the public from off-putting marks is an inadequate government interest for First Amendment purposes.” The federal circuit ultimately sided with a mark-holder’s right to expressive speech in promoting its brands, over the government’s ability to regulate allegedly commercial speech it thought to be “immoral.”

The government has yet to seek review of the decision from the full panel of judges at the federal circuit or before the Supreme Court. So as things stand, the USPTO can no longer refuse registration of marks it finds to be “immoral” or “scandalous.” The Brunetti decision opens the door for individual and company mark-holders to now seek federal protection over previously un-protectable marks and, if the decision stands, it will undoubtedly lead to a spike in accepted trademark applications.

The big takeaway is that holders of marks that were previously banned from protection on the USPTO’s Principal Register can now obtain registration and the benefits that come with it. No longer will these mark-holders have to rely solely on common-law remedies to protect their brands. Once they receive registration they will have the option of maintaining federal infringement actions and seeking statutory damages for an infringer’s use of confusingly similar marks.