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Supreme Court Faces Decision on Trademark Protection of ‘Scandalous’ Brands

Los Angeles – In January 2019, the Supreme Court agreed to hear a case regarding whether portions of the Lanham Act that prohibits “scandalous” or “immoral” trademarks from receiving trademark protection are constitutional.

The case, Iancu v. Brunetti¸ centers around the decision of the U.S. Trademark Office to deny trademark registration to FUCT, a clothing company founded in Los Angeles in 1990. The U.S. Court of Appeals for the Federal Circuit has already struck down portions of the law prohibiting registration for “scandalous” and “immoral” trademarks, but a decision by the Supreme Court will offer a final decision on the matter.

What is at Stake
Trademark protection allows a brand to prohibit competitors from taking advantage of the goodwill and reputation of the brand.

Not everything can be trademarked. For example, the Trademark Office may reject trademarks if they are deceptive, utilize the U.S. Flag, or use a geographic term to describe a wine or spirit that is not from that region.

Until the lower court’s decision, applications for trademarks containing “scandalous” or “immoral” words, phrases, or images were also prohibited from being registered. These trademarks included curse words, symbols or phrases for marijuana, or images depicting nudity.

“Scandalous” or “immoral” trademarks are those which the general public would find “shocking to the sense of truth, decency, or propriety; disgraceful; offensive; disreputable; . . . giving offense to the conscience or moral feelings; . . . or calling out for condemnation.”

The Trademark Office is meant to apply this test in a neutral manner. However, as the petitioner argued in his brief, the office denies trademarks based on the level of perceived offensiveness when it comes to determining what may, and may not, be protected. For example, French Connection UK enjoys protection on its trademark, “FCUK,” indicating that the decision whether or not to protect a trademark may be somewhat arbitrary.

Brands that do not receive protection are not prohibited from doing business. However, without a federal trademark registration, it is significantly more difficult for brands to prohibit competitors from taking advantage of the name recognition and customer goodwill.

If the Supreme Court upholds the lower court’s decision and permits “scandalous” or “immoral” trademarks to be registered, there is a question of what sorts of trademarks will start popping up as federally registered trademarks.

We can anticipate an increase in trademark applications for scandalous and immoral terms if the Supreme Court ultimately upholds the lower court’s decision, some of which are already in the queue at the Trademark Office.

A similar case was decided in 2017, when the Supreme Court struck down provisions banning “disparaging” terms from being trademarked in Matal v. Tam. In the month after this decision, only nine trademark applications for previously-barred trademarks were submitted to the Trademark Office, often with thoughtfulness by individuals or groups against whom these trademarks have been used, in order to prohibit hate groups from profiting from these terms.

It is likely that Iancu v. Brunetti will be heard in April 2019, and a final decision can be expected by June 2019.

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