With apologies to Dr. Brewster Higley for changing the words to what would become the iconic folk song “Home on the Range,” a recent U.S. Supreme Court decision has opened the door to registration of a category of trademarks that would previously have been refused as “disparaging.”  While the wine industry has typically not pushed the boundaries of disparaging marks, this case has implications for marks that are considered “scandalous” or “immoral,” as well.  Further, this decision could dramatically affect the way that the Alcohol and Tobacco Tax and Trade Bureau (TTB) reviews Certificate of Label Approval (COLA) applications.
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In January 2016, I wrote a blog post, called “Can you Now Register Raunchy or Offensive Trademarks? Maybe.”  At the time, the U.S. Court of Appeals for the Federal Circuit had ruled in a case brought by Simon Shiao Tam that the disparagement clause of the Lanham Act was unconstitutional and the USPTO violated Mr. Tam’s First Amendment rights by denying the trademark application for his band, “The Slants.”

The Supreme Court accepted the appeal of the Tam case and unanimously agreed that the disparagement clause is unconstitutional viewpoint discrimination.  To read the opinion, click here.  The underlying basis for its decision was that “[i]f there is a bedrock principle underlying the First Amendment, it is that the government may not prohibit the expression of an idea simply because society finds the idea itself offensive or disagreeable.” 

In reaching its decision, the Court did not address whether or not Tam intended the mark to be disparaging (he says he wants to “reclaim” the term which has been used in a disparaging manner against him and others of Asian descent).  Rather, the Court said, “[s]peech that demeans on the basis of race, ethnicity, gender, religion, age, disability, or any other similar ground is hateful; but the proudest boast of our free speech jurisprudence is that we protect the freedom to express ‘the thought that we hate.’” (emphasis added)
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This is an incredibly broad-reaching decision that will affect the outcome of many other disputes, most notably the cancellation of the trademarks for the Washington DC football team, the Redskins.

It should also unleash a logjam at the Trademark Office.  In light of the Supreme Court’s review of the Tam case, the Commissioner of Trademarks issued an informal directive to trademark examiners, indicating that applications for marks that might be considered disparaging should be suspended, pending the Supreme Court’s decision in the Tam case.  Now that the Court has ruled, those suspensions should be lifted and the applications allowed to proceed.

So, as I noted last year, the USPTO can expect a blue-streak of vulgar and off-color applications heading its way as companies vie for position in an intellectual property gold-rush.

I will caution, however, that while the Trademark Office cannot reject an application on the basis that the mark is offensive, that does not necessarily mean that you can get a product to market with that mark…yet.  The Alcohol and Tobacco Tax and Trade Bureau (TTB), for example, still has rules against allowing offensive terms on alcoholic beverage labels.  In all likelihood, a challenge to that rule based on the Tam case would be successful, but would take time.  So, unless the TTB withdraws that rule in light of the Tam case (which it could), you might still not be able to put a beer into commerce with an offensive name until that rule is challenged.

Anyone with a product for which they would like to register a trademark that may be considered offensive, should contact a trademark attorney as soon as possible to discuss not only the likelihood of getting the trademark approved, but whether there are any other laws or regulations that would keep the product off the market despite trademark approval.

Because most wineries (and some breweries) tend to be in very scenic locations, it is common for them to hold festivals in which people come and bring picnic lunches, listen to music, and often buy a bottle of the winery's product to drink on-site.  Under the previous version of the law, the winery could not legally permit patrons to bring their own wine (from another winery) to drink during these events.  Repeal of the section above appears to eliminate this prohibition.  This could have a significant impact on local wineries, who spend a lot of time, effort, and money to promote these events.  Every outside bottle of wine brought onto their property represents a lost sale of their products. 

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​The big question now is, what effect will this have on Anheuser-Busch's application for "Brewed the Hard Way."  Martin City's application proceeding to registration presents a potential obstacle to A-B's application as the Trademark Examiner may view the two marks to be confusingly similar.  It seems unlikely that A-B would simply abandon this mark, particularly after this year's Super Bowl commercial, featuring the refrain "Not Backing Down."

 

The Lanham Act governs what may and may not be federally registered as a trademark and Section 2(a) of that law bars registration of any mark that contains immoral, deceptive, scandalous, or disparaging matter.  Until recently, that provision was used by the U.S. Patent and Trademark Office (USPTO) to reject applications for trademarks that included profanity or racial epithets. 

In 2011, Simon Shiao Tam, the front-man of the Asian-American rock band, “The Slants,” filed for registration of the band’s name.   Mr. Tam named the band in order to “reclaim” Asian stereotypes.  The USPTO rejected the application as likely to disparage people of Asian descent.  In April 2015, a three-judge panel of the U.S. Court of Appeals for the Federal Circuit affirmed the USPTO’s finding that the mark was disparaging.  However, one of the members of that panel questioned the constitutionality of the entire provision.  The Federal Circuit then agreed to rehear the case en banc, meaning that the entire bench of judges of that court would hear the case together.

On December 22, 2015, the Federal Circuit released its en banc opinion, finding that the disparagement proscription of Section 2(a) was unconstitutional.  Its rationale was that “[i]t is a bedrock principle of the First Amendment that the government may not penalize private speech merely because it disapproves of the message it conveys.”

The press, of course, immediately drew comparisons to the Redskins case with many suggesting that the Tam decision would bolster the Redskins chances of having its trademarks reinstated.  However, the decision of Judge Lee of The Eastern District of Virginia upholding the USPTO’s cancellation of the Redskins’ trademarks is currently under appeal in the U.S. Court of Appeals for the Fourth Circuit, a sister court to the Federal Circuit.  While that court should consider the Tam decision, it is under no obligation to follow its rationale.  Whether the Fourth Circuit follows the Federal Circuit or not, the Tam decision is likely headed to the U.S. Supreme Court and given its broad implications, there’s a good chance they will take it.

For now, Tam is the law of the land and the disparagement proscription of the Lanham Act is unconstitutional.  The USPTO can expect a blue-streak of vulgar and off-color applications heading its way as companies vie for position in an intellectual property gold-rush.  But, there are two things to consider before joining the herd.
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First, while it usually takes about 7-12 months to get a trademark registered, if the Supreme Court takes up the Tam case, it could take 1-2 years before the Court issues a decision.  That means someone filing an offensive trademark now may get their mark registered before the end of 2016, but if the Supreme Court overturns the Federal Circuit decision, the mark could be subject to cancellation in 2017-2018. 
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Second, getting the trademark registered does not necessarily mean you can put it on products.  For example, in the craft beer industry (a market with a penchant for “edgy” names) all bottle and can labels must receive a Certificate of Label Approval (COLA) from the Tax and Trade Bureau (TTB) before they can be put into the market.  Like the Lanham Act’s disparagement provisions, the TTB’s COLA regulations prohibit approval of labels that are “obscene or indecent.”  After the Tam decision, it is very likely that someone will file suit against the TTB, challenging the constitutionality of its indecency proscription.  But, that process could take years and if the TTB, in the meantime, sticks to its guns, beers with obscene or indecent names (in the view of the TTB) may not be able to hit the shelves notwithstanding a federally registered trademark for the name.

Anyone with a product for which they would like to register a trademark that may be considered offensive, should contact a trademark attorney as soon as possible to discuss not only the likelihood of getting the trademark approved, but whether there are any other laws or regulations that would keep the product off the market despite trademark approval.