SCOTUS rules trademark censorship is improper. Now, will someone please bring a case about the “obscene or indecent” prohibitions on alcohol labeling?

For the record, we predicted this outcome. Furthermore, it has the benefit of correctness and consistency with the bedrock freedom of expression principles undergirding the democracy.

Two years ago, the Matal v. Tam decision began a slow but steady pace towards invalidating sections of the Lanham Act that allowed the USPTO to sit in judgment of the propriety of offensive and disparaging words utilized as trademarks.

Rather than accept the decision in the spirit in which it was intended – practitioners and the USPTO apparently thought it correct to limit their understanding of the Tam holding to the “disparage” language of Section 1052 of the Lanham Act and pressed on with denying registrations based on the other censorial provisions of the Section’s provisions such as “immoral” or “scandalous” matter. That didn’t got well for them from the start as the Federal Circuit took issue with such a ruling leading to the Court’s granting cert for a clothing manufacturer.

The Court’s recent ruling in Iancu v. Brunetti (link to opinion) took issue with the USPTO’s refusal to register FUCT for clothing given the way the word sounds. The Court held that a ban on scandalous marks like the FUCT mark violates the First Amendment as viewpoint discrimination with Justice Kagan reiterating that “[t]he government may no discriminate against speech based on the ideas or opinoins it conveys.” To rule in a different fashion would “allow[] registration of marks when their messages accord with, but not when their messages defy, society’s sense of decency or propriety.”

Practitioners and alcoholic beverage manufacturers will note that the “labeling” mandates of the Unfair competition and unlawful practices Section of the Federal Alcohol Administration Act makes it unlawful for distillers, brewers, vintenres, and other manufacturers to both label and advertise using statements that disparage a competitor’s products, or are obscene or indecent.

These prohibitions are carried into the regulations for the labeling requirements of the commodities.

Given the Brunetti decision regarding the impropriety of a federal agency sitting in judgment of what’s immoral or scandalous, it seems inevitable that a beverage label triggering denial of a certificate of label approval based on the obscene or indecent prohibition, and likely even the disparaging of a competitor’s product prohibition, will result in the same prohibitions getting stricken and ruled unconstitutional on the basis of the First Amendment.

We’ve covered this in several pieces on the blog. It seems odd that the updated versions of the new alcohol labeling and advertising regulations do not note these decisions and point out the fallacy of their enactment and continued legitimacy under the law and reasoning espoused in Tam and Brunetti.

The justifications and reasoning espoused in Tam and Brunetti set the stage for similar challenges to COLA restrictions and denials premised in the same faulty statutory authority allowing viewpoint censorship under the Federal Alcohol Administration Act. It is only a matter of time until a denial on those grounds leads to the challenge and eventual downfall of those provisions.

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