Alcohol & Tobacco Tax & Trade Bureau reviews alcohol labels for, among other things, decency. A case argued recently before the U.S. Supreme Court might essentially end that part of the label review process. Or it might embolden regulators to apply even tougher standards.
To be sure, the case doesn’t directly involve either the Federal Alcohol Administration Act or TTB. Instead, it involves the U.S. Patent & Trademark Office and Section 2 of the Lanham Act.
The case the justices heard last week involved the question of whether the prohibition on federal registration of immoral or scandalous trademarks is facially invalid under the First Amendment.
The justices were told the government interest in regulating trademarks is both protecting unwilling viewers from material they find offensive and not having a governmental association with certain words.
The justices worried about predictability. How is a person who wants to register a trademark with USPTO supposed to know if the registration will be allowed, wonder Justice Gorsuch. Several justices were concerned with both the statutory language, which Gorsuch suggested seems to be all over the place, and its application. If the statute was struck down, would that open the floodgates to profanity and offensiveness in the marketplace?
We caught up with Richard Blau, who heads the alcohol practice at Gray & Robinson. He noted that TTB operates under the Federal Alcohol Administration Act (FAA Act) while the U.S. Patent & Trademark Office (USPTO) operates under the Lanham Act. Both statutes deal with scandalous terms, he said, and the standards are pretty similar.
But who’s to say what is scandalous. “The reviewer has the responsibility to exercise some judgement.” In 1988, the Bad Frog case involved a label with a frog giving “the finger.” The New York State Liquor Authority sought to prohibit it, but the Second Circuit told the NYSLA it can prohibit the graphic, noting that the First Amendment’s “commercial speech standard didn’t advance the interest of protecting New York’s youth from the terrible effects of seeing a frog giving the finger.”
That decision led a lot of reviewers to relax their approach as to what they would accept.
USPTO is now facing some of those same challenges, Blau said. He noted that a group of Asian musicians wanted to trademark the term “Slants.” USPTO denied, saying Slants is a derogatory term. The Supreme Court ruled for The Slants, saying the denial was a constitutional abuse.
A more recent case involved the term FUCT, pronounced “fucked,” as the trademark for a clothing line. The Federal Circuit ruled in favor of the trademark applicant, saying it believes Section 2A of the Lanham Act lets the applicant trademark FUCT.
When it comes to the current case, will the Supreme Court determine that Section 2A doesn’t restrict speech? “The government is trying to say that denying a trademark isn’t restricting speech,” Blau said. “If the government wins this case, and there’s some reason for thinking it might, it could revitalize agencies’ authority to determine something is scandalous.
How might this work at TTB, we wondered? The reviewer would deny the application and return it with an explanation about scandalous language. Both of the recent cases involving alcohol involved information – alcohol content and pricing – that was important to consumers, Blau explained.
“Cases like FUCT or Bad Frog would be subject to an argument that this isn’t important consumer information. It could be the type of language that doesn’t get any protection,” he added. But, Blau noted, a lot of organizations are filing amicus briefs arguing that such terms deserve full First Amendment protection, “stressing that FUCT is a social commentary and therefore entitled.”
The decision is likely to come out this summer. We’ll keep you informed. You can hear the interview here.