Wednesday, December 20, 2017

section 2 refusals are subject to Reed strict scrutiny, Fed. Cir. rules

In re Brunetti, No. 2015-1109  (Fed. Cir. Dec. 15, 2017)

Brunetti wanted to register FUCT; the TTAB affirmed a refusal to register on scandalousness grounds.  The Federal Circuit here deals the inevitable deathblow to scandalousness as a registration bar, but on broader grounds than I expected.  Instead of holding that scandalousness is obviously viewpoint-based (because it focuses on that which offends the majority, not others—even if you thought as I did that disparagement is not viewpoint-based, scandalousness doesn’t protect everyone equally), the court merely expresses its suspicion that the bar is viewpoint-based, but then holds that the provision is (1) content-based and (2) insufficiently justified.  So, which of the other §2 bars can survive strict scrutiny, or even intermediate scrutiny?

The court applied Reed v. Town of Gilbert’s definition of content-based laws: “a law applies to particular speech because of the topic discussed or the idea or message expressed.” “Content- based statutes are presumptively invalid” and must survive strict scrutiny.  But the government didn’t argue that scandalousness survived strict scrutiny.  Instead, it made the already-rejected arguments that trademark registration is either a government subsidy program or a limited public forum.  (Only some Justices in Tam reached these issues, but the Federal Circuit already rejected those arguments.)  The Federal Circuit characterized the bar on registration as a “restrain[t]” on the expression of private speech in commerce, thus at least triggering unconstitutional conditions scrutiny.

The court then applied strict scrutiny, not Central Hudson, because the scandalousness bar targeted the expressive content of speech, not just source identification (which the court apparently equated with  speech that does “no more than propose a commercial transaction,” though of course that's not true in many cases).  The court thinks this distinction will protect most of the remaining parts of §2, not to mention infringement law generally.  I am not so sure, though I am sure that dilution looks even worse now.  The court specifically mentions the “merely descriptive” and “geographically descriptive” bars as targeting source-identifying information, which … seems backwards.  Those bars target information that doesn’t identify source.  If denying registration deters use of this (presumptively truthful) information, as the court already held when it treated denial as a restraint on expression, then those bars need further analysis.

The court then went on to hold that the scandalousness bar also didn’t survive intermediate scrutiny: “the State must show at least that the statute directly advances a substantial governmental interest and that the measure is drawn to achieve that interest,” though it need not be the least restrictive means. There was no substantial governmental interest in “promoting certain trademarks over others” (*cough*dilution*cough*), or in protecting the public from offensive marks.  [In passing the court accidentally explains why disparagement was content-based but viewpoint-neutral under prior precedents, pointing out that many cases cited in Tam didn’t involve viewpoint-based restrictions, such as Hustler v. Falwell, where the speech was offensive but didn’t articulate particular “beliefs, ideas, or perspectives.”]  There was also no substantial interest in protecting the public from scandalousness and profanities under FCC v. Pacifica Foundation, 438 U.S. 726 (1978), which depended on the fact that radio broadcasting has “a uniquely pervasive presence in the lives of all Americans” and is “uniquely accessible to children, even those too  young to read,” confronting Americans “in the privacy ofthe home, where the individual’s right to be left alone  plainly outweighs the First Amendment rights of an  intruder.”  “A trademark is not foisted upon listeners by virtue of its being registered. Nor does registration make a scandalous mark more accessible to children.” 

Anyway, even if there were a substantial interest in protecting the public from scandalous or immoral marks, denial of registration wouldn’t directly advance the government’s interest, because §2(a) doesn’t prevent the use of marks, just bars their registration.  [Hey, did you notice that this argument applies to the other §2 bars, including descriptiveness, deceptiveness, and the others?  The only one that might survive is §(d) confusion, because of B&B v. Hargis—because the TTAB’s determination could in some circumstances be used to stop the mark’s use, perhaps that directly advances the government’s interest.  But what if, as the Court indicated in B&B would regularly be the case, the defendant’s use is relevantly different from that laid out in the rejected application?  In that case, the rejection wouldn’t prevent the use and wouldn’t directly further the government’s interest in avoiding confusion.]

Finally, the scandalousness bar wasn’t carefully tailored, given the PTO’s inconsistent application of the bar and the TTAB’s own acknowledgement that scandalousness is “vague and subjective.”  [I have some bad news about the difference between descriptive and suggestive marks, and about §2(d) confusion analysis.]  Not only did this inconsistent treatment create vagueness problems, it generated “uncertainty [that] undermines the likelihood that the [provision] has been carefully tailored.”  Even if there’s a set of trademarks “whose offensiveness cannot be reasonably questioned,” the disparate and unpredictable application of the principles of scandalousness makes the bar flunk the narrow tailoring requirement of Central Hudson.

Judge Dyk’s concurrence would have limited the invalidation of scandalousness to marks that weren’t obscene, but the majority found that no reasonable definition of the statutory terms could convert them into a bar on “obscene” marks.

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