Slants Ruling May Give Green Light to Red-Light Businesses

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By Anandashankar Mazumdar

Red-light sector businesses, or those looking to shock by branding themselves with racy or potentially offensive names, could be the biggest beneficiaries of this week’s U.S. Supreme Court ruling striking down a ban on the registration of disparaging trademarks.

The majority of mainstream, broad-based consumer businesses are as likely as ever to stay away from offensive trademarks, trademark lawyers told Bloomberg BNA. However, businesses that deal in goods and services on the fringes of polite society—such as in the adult entertainment industry—could take advantage of the June 19 decision ( Matal v. Tam , Lee v. Tam, U.S., No. 15-1293, 6/19/17 ).

In the recent past, the Patent and Trademark Office has rejected attempts to register trademarks such as “MomsBangTeens” for a porn video site, “Asshole Repellant” for a novelty toy in the form of an aerosol can, and an alcoholic beverage bottle in the shape of a human fist with its middle finger extended.

In a roundabout way, these are the kinds of trademarks that might get a green light from the Slants ruling. They don’t disparage any groups but were rejected by the PTO as immoral or scandalous—categories that are barred under the same section of the federal trademark statute at issue in the Slants case. And the PTO itself has said that, if the disparagement clause is an unconstitutional restriction on free speech, then the ban on immoral or scandalous registrations is unconstitutional as well.

Offensive Trademarks Uncommon

With its First Amendment implications, the case over whether the Slants rock band could register its name as a trademark with the PTO has been widely followed, not least because of a similar and high-profile dispute over the registrations of the Washington Redskins NFL football club’s trademarks.

As a practical matter, the ruling striking down a provision of U.S. trademark law that has been in place and enforced for 70 years will likely have limited impact on most conventional businesses or trademark practitioners, trademark lawyers said.

“It just seems highly unlikely to me that a consumer product company or apparel or food or retail or insurance service would really want to use a mark that a segment of the population found disparaging,” Jeffrey L. Van Hoosear, a trademark lawyer with Knobbe, Martens, Olson & Bear LLP, Irvine, Calif., told Bloomberg BNA.

The majority of the impact will be far from the mainstream—on the edges where elements of the music, art, fashion and other creative industries have always sought to shock, practitioners said. And the impact is likely to come not because a ban on trademarks that insult ethnic groups has been eliminated, but because of a different one.

Ruling May Strike Twice

The Slants case didn’t result in any statement from the Supreme Court on the immoral and scandalous clause of Section 2(a). But earlier this year, the PTO put those kinds of applications on hold under the assumption that, should the high court rule that the disparagement clause violates the First Amendment, the same reasoning would apply to the immoral and scandalous clause.

The PTO is in the process of reviewing the high court’s decision and will issue guidance regarding its Trademark Manual of Examining Procedure, a spokesman said. He declined to go into detail.

Meanwhile, trademark lawyers don’t know how many registration applications are rejected by the PTO because they are either disparaging, scandalous or immoral. One example of a failed application that could find new life in wake of the ruling is from clothing designer Erik Brunetti, whose application to register the brand name Fuct was rejected as scandalous by the PTO.

“Fuct” doesn’t disparage a particular group but could offend the sensibilities of the general public and is the type of registration that has been barred as scandalous or immoral. If the ban on those trademarks is also struck down as unconstitutional, the floodgates to register all sorts of vulgar or shocking markets could open.

“I think you’d certainly see the misspellings of the F-word, as well as the word itself,” Katrina Hull of Michael Best & Friedrich LLP, Milwaukee, Wis., told Bloomberg BNA.

Immoral and Scandalous

In fact, about 90 applications incorporating the F-word are pending at the PTO. But as Eric Ball, an IP litigator at Fenwick & West LLP, Mountain View, Calif., pointed out, many of those are for uses like T-shirt slogans, which would be rejected anyway as ornamental. An ornamental use is a word or a picture that is displayed for its own sake and not as an indicator of who made the goods—which is what a trademark is.

Alcoholic beverages are another market where some producers like to lurk on the fringes of acceptability. The rise of microbreweries has resulted in an explosion of new beer brands, many of them featuring less-than-polite names or logos, such as Frederick, Md.-based Flying Dog Brewery’s Raging Bitch. Instead of skirting the edges of civility, beer trademark registrations could start crossing the line.

Still, there’s a limit to how far businesses can go. Obscenity is, by definition, not protected by the First Amendment. And it’s unlikely that many commercial businesses would want to associate themselves with material that fits the legal definition of obscene.

Apart from that, though, the line defining what is acceptable for mainstream businesses will inevitably shift over time, just as it always has.

“I don’t expect a Fortune 50, Fortune 500 company to have a scandalous mark, but what is scandalous today might change 50 years from now,” Ball said.

To contact the reporter on this story: Anandashankar Mazumdar in Washington at AMazumdar@bna.com

To contact the editor responsible for this story: Mike Wilczek at mwilczek@bna.com

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