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Trademark Supreme Court Cases to Watch in 2019

15 Feb Trademark Supreme Court Cases to Watch in 2019

So far, for its Spring 2019 term, the Supreme Court has agreed to hear two trademark cases that should provide interesting discussion and potential changes to the law.

Immoral and Scandalous Trademarks: Iancu v. Brunetti

One case that the Supreme Court recently agreed to take up involves the Lanham Act’s prohibition on registering immoral and scandalous marks.

In this case, the Los Angeles based clothing line FUCT was denied protection because the Trademark Office determined that the name is the past tense of a vulgar word, and therefore ineligible for trademark protection.

Although Brunetti, the owner of the company, may manufacture, market, and sell goods and services without registering their marks, receiving a trademark allows his company to prevent infringers from profiting off the brand’s reputation.

This case comes on the heels of a 2017 case, Matel v. Tam, in which the Court determined that the Lanham Act’s prohibition on protecting disparaging marks was unconstitutional. There, an Asian American band called The Slants was initially denied protection due to the potentially disparaging and offensive band name. However, the Supreme Court ultimately found in the band’s favor on First Amendment grounds – namely, that speech “may not be banned on the grounds that it expresses ideas that offend.”

Questions of what constitutes immoral or scandalous marks often come down to opinion and discretion of the examining office. This determination echoes another famous Supreme Court quote, written by Justice Stewart in a 1964 concurrence regarding the definition of pornography. Rather than making a hard and fast rule, the Justice famously wrote: “I know it when I see it.”

If the Court rules in favor of Brunetti, this will be a major change to the Lanham Act. We will likely see an increase in requests for trademark protection on previously-rejected marks.

Trademark Licensing and Bankruptcy: Mission Product Holdings v. Tempnology

The second trademark case is concerned with the rights of trademark licensees if an executory trademark license is rejected in bankruptcy filings. In typical bankruptcy cases, a debtor may “reject” contracts and free itself of some, but not all, obligations. Obligations that can not be freed include contracts regarding intellectual property because the other party has made investments reliant on the IP and could lose a significant amount of money if the contract is rejected.

The dispute circles around the Bankruptcy Code’s definition of “intellectual property,” which includes patents and copyrights, but excludes trademarks. Some lower courts have taken the view that trademarks are included in this definition, while others have taken the opposite view.

Although the outcome of this case may not promote the creation of brands and logos sought after by rebellious teenagers, it may prove an important decision when it comes to manufacturing t-shirts with these logs on them. As more retailers are declaring bankruptcy in recent years, it is important to have a consistent rule for courts to follow in adjudicating these cases.

This article is for informational purposes only and does not provide legal advice. If you are interested in speaking with an intellectual property lawyer who also specializes in entertainment law, contact Heerde Blum LLP by calling 213-770-5757 or 212-920-5858 or by filling out the online contact form.