Post-era of Lanham Act: a brief discussion after <em>Matal v. Tam</em> and <em>Iancu v. Brunetti</em> with the concern of Trademark Freedom v. International Adaptability
This blog examines how Matal v. Tam and Iancu v. Brunetti affected U.S. trademark law trends under the First Amendment and the challenges these “immoral or scandalous” marks may face when seeking protection across international borders.
In the past several years, U.S. Trademark Law has changed. The Supreme Court of the United States (SCOTUS) lifted the restrictions on disparaging and “immoral or scandalous” marks regulated by the Lanham Act, which has changed the environment of trademark law practice. 15 U.S.C. § 1052(a) (2018 & Supp. V 2023).
In Matal and Iancu, SCOTUS confirmed that the prohibitions set forth in the Lanham Act violated First Amendment principals, and therefore even offensive marks may be allowed for registration. See Matal v. Tam, 582 U.S. 218 (2017); see also Iancu v. Brunetti, 588 U.S. 388 (2019). Although this can be viewed as another victory for Free Speech, it raises an important question: does the invalidation of the restriction on registering the disparaging and scandalous marks really advance trademark freedom, or does it only serve to be a symbolic right without promoting a commercial benefit?
When considering the protection of these marks in overseas markets, such as exercising the reciprocity of Paris Convention for the Protection of Industrial Property (Paris Convention) and Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), terms like “public order and morality” will likely be cited by foreign trademark regulatory authorities to refuse offering the same level of protection, especially in those jurisdictions with more conservative trademark laws. See Paris Convention for the Protection of Industrial Property, art. 6quinquies(B)(3), Mar. 20, 1883, as revised at Stockholm July 14, 1967, 21 U.S.T. 1583, 828 U.N.T.S. 305. & 15 U.S.C. § 1052(a) (2018 & Supp. V 2023). This blog post will explore the balance between the freedom of trademark registration and the First Amendment along with the uncertain adaptability that these local mark owners might face in international jurisdictions.
The Lanham Act has been governing the registration and protection of trademarks in the United States at a federal level since 1946. Section 2(a) requires the refusal of registration on trademarks which are immoral, scandalous or deceptive in nature. 15 U.S.C. § 1052(a) (2018 & Supp. V 2023). For years, the U.S. Patent and Trademark Office (USPTO) has complied the wording of the section to examine trademark applications and deny registration on marks being offensive, vulgar, or harmful in the public sense. However, the rules were changed after the SCOTUS decisions of Matal and Iancu. Matal v. Tam, 582 U.S. 218 (2017); Iancu v. Brunetti, 588 U.S. 388 (2019).
In Matal, an Asian-American musician Simon Tam brought an application before court. He used a racial slur “The Slants” as the name of his band and therefore wanted to have the words “The Slants” registered as a trademark. Matal, 582 U.S. at 223-25. The USPTO rejected Tam’s application because of the mark being disparaging, but the Court later found that the disparagement clause of 15 U.S.C.S. § 1052(a) violated the First Amendment, therefore deeming the clause unconstitutional. Id. at 247. The Court recognized these types of marks as a form of private speech and concluded that the registration of the mark should not be denied by the USPTO based on the viewpoint expressed by the mark.
In Iancu, the founder of a clothing line, Erik Brunetti, brought the mark “FUCT” for federal trademark registration. Iancu, 588 U.S. at 392. The USPTO rejected Brunetti’s application, reasoning that the mark was ‘highly offensive’, ‘vulgar’, and contained ‘negative sexual connotations.’ Id. at 393. Brunetti challenged the rejection and argued that the prohibition in the Lanham Act on ‘immoral or scandalous’ marks is in violation of the First Amendment of the Constitution. The Court ruled for Brunetti and invalidated the morality restrictions. This decision of the Court has opened the door for marks that contain profanity, vulgarity or offensive elements to be registered and receive protection under the Trademark Law of the U.S.
Matal and Iancu have been landmark cases solidifying the freedom of trademark registration all around the United States, but the circumstance may significantly change when registered marks seek protection in foreign jurisdictions via international treaties. The U.S. constitutional principles do not solely govern the various related treaties towards the trademark protection, while international treaties are usually governed by multiple jurisdictions and diverse legal systems.
Two key instruments for recognition of trademark international protection are the Paris Convention and the TRIPS Agreement. See Paris Convention for the Protection of Industrial Property art. 6quinquies, Mar. 20, 1883, as revised at Stockholm July 14, 1967, 21 U.S.T. 1583, 828 U.N.T.S. 305; see also Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) art. 2(1), Apr. 15, 1994, Marrakesh Agreement Establishing the World Trade Organization, Annex 1C, 1869 U.N.T.S. 299. Both treaties vest a duty in member countries to offer protection for trademarks registered in other member countries. However, the recognition is not absolute. There are exceptions that allow other member countries to refuse protection of a registered trademark from the member country where the mark was originated on the grounds of “public order” or “morality”. Paris Convention for the Protection of Industrial Property art. 6quinquies(B)(3). This will allow other member countries to deny protection to mark that conflict with cultural, religious or social norms. “The Slants” or “FUCT” are likely to fall within the range of these conflicts.
Similarly, these exceptions are likely to have significant impact in trademark law practice. The European Union Trademark Regulation expressly prohibits trademark to be registered if the marks are in “contrary to public policy or to accepted principles of morality.” Regulation (EU) 2017/1001 of the European Parliament and of the Council of 14 June 2017 on the European Union Trade Mark, art. 7(1)(f), 2017 O.J. (L 154) 1, 9. Chinese Trademark Law also prohibits the registration of marks which are immoral, obscene or otherwise detrimental to social values. Trademark Law of the People’s Republic of China (promulgated by the Standing Comm. Nat’l People’s Cong., Aug. 23, 1982, rev’d Apr. 23, 2019, effective Nov. 1, 2019) art. 10(1)(8) (P.R.C.). Middle Eastern countries usually have stricter standards on profanity or scandalous marks registration based on traditional and religious doctrine. Trademarks like “FUCT” would be unlikely to receive protection in Europe, China and more jurisdictions through international treaties.
The disparaging and scandalous marks are permitted for registration to receive protection under the U.S. Trademark Law because of First Amendment. Matal v. Tam, 582 U.S. 218 (2017); Iancu v. Brunetti, 588 U.S. 388 (2019). However, the constitutional protection cannot be enforced abroad. For U.S. trademark owners, the registration of their trademarks requires actual use before the mark can be registered for protection. 15 U.S.C. § 1051(a) (2018 & Supp. V 2023). Therefore, when the trademark owners step to expand their business and brands overseas, they are likely to have already carried those trademarks with protection under the U.S. law for a period of time. However, this does not guarantee their applications to register such marks in foreign jurisdictions to be successful. The marks, with any other associated intellectual property rights, may receive no protection or enforceability in foreign jurisdictions.
General Court of the European Union recently handed down a case and rule disfavor for the plaintiff, Escobar Inc., a U.S. company incorporated in Puerto Rico for their trademark registration appeal against European Union Intellectual Property Office (EUIPO) on the refusal decision of the “PABLO ESCOBAR” registration application. Escobar Inc. v. EUIPO, Case T-255/23 (E.U. Gen. Ct. Apr. 17, 2024). Escobar Inc. has used and registered their mark “PABLO ESCOBAR” in the U.S. in 2017, but when the company sought to extend the protection of the mark to European Union, EUIPO refused the registration of the mark. The General Court of the European Union upheld the decision of refusal made by EUIPO based on Article 7(1)(f) of Regulation (EU) 2017/1001, because the mark “PABLO ESCOBAR” was contradicted with public policy and acceptable principles of morality.”, since the name of Pablo Escobar represents a figure that is involved with drug dealing, murder, and organized crime. Id. ¶¶ 44-47. The outcome of this case has demonstrated lawful marks receiving full protection under U.S. trademark law and the First Amendment can nonetheless be refused for registration in another jurisdiction of the world on public policy and morality grounds. This has significantly highlighted the instability of trademark freedom when it travels across constitutional borders.
With consideration of business development and commercial strategy, the purpose for trademark owners to register their marks is usually not to freely express their vision, but to gain exclusive control over their marks and to secure the market value of the brands associated with those marks. 15 U.S.C. § 1127. Even though offensive marks can receive protection in the U.S., they may encounter challenges from people who hold conservative views against these marks in various marketplaces.
Internationally, since the marks only enjoy strong protection in the U.S., their competitors or counterfeiters may turn abroad to infringe the trademark rights of the original owners. The owners’ claim in overseas market can be vulnerable because the protection they receive in other countries is limited. The inconsistency of the U.S. Trademark Law and the reciprocity of the international treaties can reduce the global compatibility and enforceability of the brands associated with those “immoral or scandalous” marks. Furthermore, trademark owners may run the risk of increased reputational costs if they choose to register “immoral or scandalous” or vulgar marks. The marks might be legally protected under trademark law, but all the marks run risks of alienating consumers and investors, which can even trigger regulatory scrutiny in conservative markets and jurisdictions. It leaves the owner of the mark to weigh the balance for their business whether it is worthy to exercise their right to free speech but at the same time it bears the risk that people do not like the mark and must accept only limited protection in overseas markets.
At this stage, the trademark registration freedom based on the grounds of First Amendment rights might be theoretical but not realistic in practice. For many trademarks and brand owners, it may still be wise to refrain from embracing to expressive autonomy rather than sacrificing the brands’ stability and portability across borders and jurisdictions.
The decision in Matal and Iancu is a turning point for U.S. trademark law since the longstanding traditional clause of the Lanham Act on prohibition of registration for disparaging and scandalous marks have been struck down. These rulings stand on the legal supremacy of the First Amendment, which extends protection to cover offensive commercial trademark registrations. The consequences and future impact to the U.S. trademark law practice become complicated and ambiguous.