By: Rachel B. Kinney
In an opinion by Judge Moore, the Federal Circuit held on December 15, 2017 that the Lanham Act’s Section 2(a) bar on the registration of “immoral” or “scandalous” trademarks is unconstitutional because it violates the First Amendment. In re: Brunetti, No. 2015-1109, slip op. at 42 (Fed. Cir. Dec. 15, 2017) (“Brunetti”). Following the Supreme Court’s recent decision invalidating as unconstitutional the Lanham Act’s bar on the registration of “disparaging” trademarks, see Matal v. Tam, 137 S. Ct. 1744 (2017) discussed here, the Federal Circuit’s decision in Brunetti is hardly surprising.
Lanham Act Section 2(a) bans the federal registration of trademarks that “[c]onsists of or comprises immoral . . . or scandalous matter . . . .” 15 U.S.C. § 1052(a). In addressing trademark owner Erik Brunetti’s appeal of the Trademark Trial and Appeal Board’s (“Board”) refusal to register the mark FUCT, the Federal Circuit held that substantial evidence supports the Board’s finding that FUCT is “vulgar” and therefore scandalous. Brunetti at 8-9. The Federal Circuit agreed with the Board that the FUCT mark was the “phonetic twin” of “‘one of the most offensive’ English words.” Id. at 6 (citation omitted). The court also agreed that the putative registrant’s declaration seeking to establish that “‘fuct’ was chosen as an invented or coined term for ‘Friends yoU Can’t Trust,’” “‘stretche[d] credulity’” “given the contradictory record evidence.” Id. at 8 (citation omitted).
Despite this holding, and the court’s finding that “the use of such marks in commerce [is] discomforting”, the Federal Circuit ultimately reversed the Board’s refusal to register FUCT because it found that Section 2(a)’s ban on immoral and scandalous marks is unconstitutional. The Federal Circuit held that the ban on immoral and scandalous marks “impermissibly discriminates based on content in violation of the First Amendment.” Id. at 13, 42. The Federal Circuit declined to address whether the “immoral or scandalous” provision is also viewpoint discriminatory, the basis on which the Supreme Court in Tam invalidated Section 2(a)’s “disparaging” provision. Id.
The Federal Circuit rejected the government’s contentions that “§ 2(a)’s content-based bar on registering immoral or scandalous marks does not implicate the First Amendment because trademark registration is either a government subsidy program or limited public forum.” Id. at 14. The court determined that “the subsidy line of case law cannot justify the government’s content-based bar on registering immoral or scandalous marks” and that “the registration of trademarks does not create a limited public forum in which the government can more freely restrict speech.” Id. at 14, 20, 26.
In response to the government’s alternative argument that “trademarks are commercial speech implicating only the intermediate level of scrutiny set forth in Central Hudson,” the Federal Circuit held that the government could not meet Central Hudson’s second prong requiring a substantial government interest, third prong requiring “the regulation directly advance th[e] government’s [asserted] interest,” and fourth prong requiring regulation that is “‘not more extensive than necessary to serve that interest.’” Id. at 28 (citing and quoting Central Hudson Gas & Electric Corp. v. Public Serv. Comm’n, 447 U.S. 557, 566 (1980)).
The majority also criticized Judge Dyk’s proposal in the concurrence to “‘narrow the immoral-scandalous provision’s scope to obscene marks in order to preserve its constitutionality,’” noting that [w]hile the legislature could rewrite the statute to adopt such a standard, we cannot.” Id. at 39 (citation omitted).
The Federal Circuit’s decision in Brunetti further highlights the importance of protecting private expression, “even private expression which is offensive to a substantial composite of the general public.” Id. at 42.
 The Federal Circuit observed that “a regulation of purely commercial speech reviewed according to the intermediate scrutiny framework established in Central Hudson,” which set forth “a four-part test which asks whether (1) the speech concerns lawful activity and is not misleading; (2) the asserted government interest is substantial; (3) the regulation directly advances that government interest; and (4) whether the regulation is ‘not more extensive than necessary to serve that interest.’” Brunetti at 28 (citing and quoting Central Hudson Gas & Electric Corp. v. Public Serv. Comm’n, 447 U.S. 557, 566 (1980)).