An Overview of 2019 Supreme Court Trademark Developments
V&E IP Insights, December 31, 2019
This year (2019) marks a significant year in the development of United States Supreme Court trademark jurisprudence. Much public commentary has focused on the Supreme Court’s Brunetti opinion which found that the Lanham Act’s so-called Scandalous Clause was an unconstitutional prohibition on protected speech under the First Amendment. 588 U.S. ___ (2019). Beyond Brunetti, however, the Supreme Court has granted certiorari in a variety of cases that have the potential to significantly impact the trademark landscape.
Iancu v. Brunetti
In June of 2019, the Supreme Court held that the Lanham Act’s prohibition on registration of “immoral or scandalous” trademarks was discrimination on the basis of viewpoint, violating the First Amendment. Iancu v. Brunetti, 488 U.S. __ (2019). The Lanham Act instructs the United States Patent and Trademark Office (the “USPTO”) to refuse registration of any trademark containing “scandalous” or “immoral” matter. 15 U.S.C. § 1052(a). Despite this restriction, Erik Brunetti, an artist and entrepreneur, attempted to trademark “FUCT” for his line of clothing. The USPTO refused Brunetti’s registration based on evidence that the mark would be perceived by consumers as its vulgar homonym.
At Supreme Court oral argument, counsel for Brunetti responded that the Scandalous Clause is an unconstitutional restriction on free speech, drawing parallels to the Court’s opinion in Matal v. Tam, 582 U.S. __ (2017). Tam challenged the Lanham Act’s prohibition against any trademarks that may “disparage . . . or bring . . . into contemp[t] or disrepute” persons, whether living or dead, institutions, beliefs, or national symbols.
Humorously, Malcolm L. Stewart, arguing for the USPTO, declined to speak the FUCT mark aloud in oral argument, calling it instead “the profane past participle form of a well-known word of profanity and perhaps the paradigmatic word of profanity in our language.” Stewart argued that “[t]he Lanham Act’s ban on federal registration of scandalous trademarks is not a restriction on speech but a valid condition on participation in a program,” viewpoint neutral. The Supreme Court disagreed.
Beyond Brunetti: Pending Cases
In the days following Brunetti, the Supreme Court granted certiorari in a pair of cases that have the potential to impact the trademark landscape. First, in Lucky Brand, the Court will determine an issue of federal preclusion. Marcel Fashions Grp. Inc. v. Lucky Brand Dungarees Inc, 898 F.3d 232 (2d Cir. 2018), cert. granted, ___ U.S.L.W. ___ (U.S. June 28, 2019) (No. 18-1086). Lucky Brand arose from the 18-year legal battle between Lucky Brand and Marcel over their disputed GET LUCKY mark. The Court has ostensibly granted certiorari in the case to address an evolving circuit split on whether and to what extent defense preclusion, as opposed to claim preclusion, should be applied. Specifically, the question presented in Lucky Brand is whether, when a plaintiff asserts new claims, federal preclusion principles bar a defendant from raising defenses that were not actually litigated and resolved in a prior case between the parties. Oral argument in Lucky Brand is scheduled for January 13, 2020.
In Romag Fasteners, the Court will decide whether, under section 35 of the Lanham Act, 15 U.S.C. § 1117(a), willful infringement is a prerequisite for an award of an infringer’s profits for a violation of section 43(a), 15 U.S.C. § 1125(a). Romag Fasteners, Inc. v. Fossil Inc., 817 F.3d 782 (Fed. Cir. 2018), cert. granted, ___ U.S.L.W. ___ (U.S. June 28, 2019) (No. 18-1233). Said differently, the Court will determine what damages are appropriate when — as in the April 2014 jury verdict levied against Fossil, Inc. — a jury finds the defendant acted with “callous disregard” but falls short of the “willful” threshold.
Lastly, in November of this year, the Court granted certiorari in the Booking.com case. Booking.com B.V. v. Iancu., 915 F.3d 171 (4th Cir. 2019), cert. granted, __ U.S.L.W. __ (U.S. Nov. 8, 2019) (No. 19-46). In Booking.com, the Court will examine whether adding “.com” to an otherwise generic term — like “booking” — is sufficient to create a protectable trademark.
What does this mean for you?
The Court’s decision in Brunetti expressly removes the Lanham Act’s bar against immoral and scandalous trademarks. Some commentators have speculated that, with the restriction removed, there may be a rush to register previously unregistrable marks. So far, this has not been born out.
The pending cases have the potential to steer best practices in coming years. If the Court finds in Lucky Brand that defense preclusion should be applied broadly, defendants may be hesitant to omit defenses for fear of losing them when new claims are raised by the plaintiff. Romag Fasteners has the potential to change the intellectual property licensing and counseling space, while Booking.com has the potential to alter the registrability of a whole host of domains. Companies should keep an eye on this evolving area.
Vinson & Elkins monitors developments in the trademark regime and seeks to educate and assist businesses in taking action to manage risk. Visit our website to learn more about V&E’s Intellectual Property practices. For more information, please contact Vinson & Elkins lawyers Scott Brown or Briana Falcon.