Iancu v. Brunetti
TRADEMARK – Decided: June 24, 2019
Holding: The Lanham Act's prohibition on registration of "immoral or scandalous" trademarks violates the First Amendment.
Section 2(a) of the Lanham Act permits the USPTO to refuse a trademark if it "comprises immoral, deceptive, or scandalous matter…" 15 U.S.C. § 1052(a). Erik Brunetti has used the mark "FUCT" for his clothing line since 1990, only applying for federal registration in 2011. Citing § 2(a), the USPTO refused registration as "scandalous." The TTAB affirmed the mark as vulgar and unregistrable in light of the "strong, and often explicit" imagery in the apparel's promotional material. Brunetti appealed to the Federal Circuit.
During the appeal, the Supreme Court issued its opinion in Matal v. Tam, 137 S. Ct. 1744 (2017), finding the Lanham Act's disparagement clause an unconstitutional viewpoint-based restriction of speech. In light of Tam, the Federal Circuit reversed, deeming the registration bar on "immoral" or "scandalous" marks facially invalid.
In a 6-3 opinion by Justice Elena Kagan, the Court postulated, "[t]he government may not discriminate against speech based on the ideas or opinions it conveys." When the PTO disapproves marks that some may find offensive, it infringes the First Amendment. In dissent, Justice Sonia Sotomayor contended Brunetti's mark should be rejected, opining one could read "scandalous" narrowly to mean "vulgar" or "obscene," which is viewpoint-neutral and thus does not violate the First Amendment.
In a win for free speech, Brunetti reaffirms that restrictions on the content of a trademark must be viewpoint-neutral. But four justices (Justice Samuel Alito in concurrence and Chief Justice John Roberts and Justices Stephen Breyer and Sonia Sotomayor in dissent) expressed concern that the Court's decision would open the door for obscene trademark applications – and recent reporting shows that concern is being realized. Practitioners should watch this space, including whether the PTO rejects offensive or vulgar marks under other provisions in the Lanham Act or whether Congress amends the Lanham Act, to more narrowly prohibit obscene marks.
Return Mail Inc. v. United States Postal Service
PATENT – Decided: June 10, 2019
Issue: The federal government is not a "person" capable of filing a covered business method review petition under the Leahy-Smith America Invents Act.
The AIA allows a "person" to challenge a patent's validity through a covered business method (CBM) review before the Patent Trial and Appeal Board (PTAB). AIA §18(a)(1)(B).
When patent-holder Return Mail's attempts to license a patent to USPS were unsuccessful, Return Mail filed suit in the United States Court of Federal Claims. Then USPS filed a CBM petition with the PTAB. In its final written decision, the PTAB rejected Return Mail's argument that USPS lacked statutory standing to file a CBM suit and invalidated all of the challenged claims as drawn to ineligible subject matter under 35 U.S.C. § 101.
In a 6-3 opinion by Justice Sonia Sotomayor, the Court held the AIA excludes the Postal Service and other federal agencies from the definition of "person." There is a "longstanding interpretive presumption that 'person' does not include the sovereign." The Court rejected the Postal Service's arguments to overcome the presumption, finding no evidence that Congress intended to allow a federal agency to file an adversarial challenge like a CBM review petition.
In dissent, Justice Stephen Breyer found the presumption is overcome because the Postal Service can apply for, obtain, and maintain a patent; sue others for, be sued for, and assert defenses to patent infringement; and invoke and defend against other administrative procedures for challenging patents.
Return Mail restricts the federal government's ability to challenge a patent – even one asserted against it in a patent infringement lawsuit – through the AIA's streamlined, post-issuance review procedures. Patent holders, particularly those considering suit against a federal agency, will see this as a win, but they should also note the Court's opinion does not restrict a federal agency's ability to petition for ex parte re-examination or for Congress to clarify the AIA's definition of "person."