Courtesy photo.

Just six months after the U.S. Supreme Court struck down the Lanham Act's ban on disparaging trademarks, the U.S. Court of Appeals for the Federal Circuit has ruled that barring trademarks that include immoral or scandalous language is an unconstitutional restriction on free speech.

Excellent timing and a focus on the broader implications of the case created the ideal circumstances to have this issue addressed, John Sommer, general counsel of clothing brand Stussy Inc., who argued for the “Fuct” mark in the case, said in an interview with Corporate Counsel following the decision, which was handed down on Dec. 15.

The question before the three-judge panel in the Federal Circuit was raised by artist and designer Erik Brunetti, who has been trying for years to register the Fuct trademark. Citing the mark's “scandalous” or “immoral” nature, the U.S. Patent and Trademark Office denied registration in 2012. Since then, Brunetti's case made its way through the Trademark Trial and Appeal Board before ending up in the Federal Circuit.

In the Dec. 15 opinion, Judge Kimberly Moore, writing for the majority, noted that while the Fuct mark is vulgar and therefore scandalous, the Lanham Act's bar on registering immoral or scandalous marks is an unconstitutional content-based restriction on speech.

“There are words and images that we do not wish to be confronted with, not as art, nor in the marketplace,” wrote Moore, who was joined in her opinion by Judge Kara Stoll. “The First Amendment, however, protects private expression, even private expression which is offensive to a substantial composite of the general public,” Moore continued. Judge Timothy Dyk wrote a concurring opinion.

Joshua Salzman of U.S. Department of Justice's Civil Division, who argued on behalf of the USPTO, did not return multiple requests for comment on the decision.

Sommer said the Matal v. Tam case, which questioned the Lanham Act's disparagement provision and was decided by the Supreme Court in June, helped him prepare to argue in defense of the Fuct mark.

“It actually was very convenient that Tam was argued just a few weeks before mine,” he said, referring to the arguments before the Federal Circuit in late 2015. “I listened to the questions that the judges asked and I listened to the answers the attorneys gave in the Tam case a few weeks before I argued, and so when I argued I gave what I thought were the right answers,” noted Sommer, who, outside of Stussy, represents a handful of personal clients, including Brunetti.

Instead of relying exclusively on the fine points of constitutional law, Sommer said he focused on the practical implications of barring marks like Fuct. He used the example of a business that was originally denied incorporation because its name allegedly violated a Pennsylvania statute forbidding blasphemous or profane language. He also pointed to another business that was refused permits in Ann Arbor, Michigan, because its name was considered offensive. While both refusals were eventually deemed unconstitutional, Sommer said that the trademark law in question with respect to the Fuct mark could allow for the exact same types of decisions.

“Basically, I was saying that if this is constitutional, then that means you're giving every city council and every state legislature the right to decide what names are proper to use,” Sommer explained. And so, in some part of the country, Planned Parenthood could be considered scandalous and in other parts of the nation, it could be the National Rifle Association, he said, “because in different parts of the nation, those two organizations are the best thing that ever happened, or the worst thing.”

From a consumer's perspective, there's probably not a lot that changes as a result of the decision, according to Sommer. “The registration is not going to affect which stores are going to carry [my client's] products,” he said, adding that consumers speak up when they don't like what's being sold and businesses often listen. “Giving registrations to these things is not going to flood the market with scandalous, immoral, offensive kind of trademarks because we're not going to see them any place we shop.”

But from the business perspective, barring registration to immoral or scandalous marks can be problematic, Sommer said. Without registration, a trademark owner can't leverage intent-to-use provisions that allow for priority rights before a mark is in use, he explained.

And then there can be a significant impact on business deals.

“It's virtually impossible to sell a brand without having your mark registered,” Sommer said. “If someone's talking about throwing a lot of money on the table, and you don't have anything to show them … that is usually a pretty significant problem.”