2020 · Freedom of Expression · Human Rights · Intellectual Property · Trademark Law · Trademarks

‘Immoral’ Trademarks and Freedom of Expression: The EU and the USA Compared

There is a prohibition on the registration of ‘trade marks which are contrary to public policy or to accepted principles of morality’ in the European Union (see Article 7(1)(f) of the Regulation (EU) 2017/1001 of the European Parliament and of the Council of 14 June 2017 on the European Union trade mark). Until as recently as last year, there used to be a similar prohibition in the USA (although worded differently). Section 1052(a) of Title 15 of the US Code permits the refusal of registration of trademarks that ‘Consists of or comprises immoral, deceptive, or scandalous matter; or matter which may disparage or falsely suggest a connection with persons, living or dead, institutions, beliefs, or national symbols, or bring them into contempt, or disrepute’.

However, in 2017, in Matal v. Tam, the US Supreme Court ruled that the clause in §1052(a) permitting the refusal of registration of marks that may disparage or bring  into contempt or disrepute any persons, living or dead (i.e. the disparagement clause) is unconstitutional pursuant to the First Amendment. Subsequently, in 2019, in Iancu v. Brunetti, the US Supreme Court ruled that the prohibition on the registration of immoral and scandalous trademarks equally violates the First Amendment. This latter decision thus paves the way for the registration of marks which some may deem as immoral (such as in Brunetti’s case, the mark ‘FUCT’).

The aim of this post is to compare how the US Supreme Court and the Court of Justice of the European Union (CJEU) have dealt with the interface between trademarks and freedom of expression in the context of the refusal by IP offices to register ‘immoral’ marks. Thus, I do not intend to speculate on whether or not it is right or wrong to register such marks. In other words, the key question here is: does the refusal to register such marks have anything to do with freedom of expression? Well, the US Supreme Court certainly thinks so and, in fact, it believes that such a refusal violates freedom of expression. As Justice Kagan (delivering the opinion of the court) notes in Brunetti: ‘a law disfavoring “ideas that offend” discriminates based on viewpoint, in violation of the First Amendment.’ In his concurring opinion in the same case, Justice Alito instructively notes that:

Viewpoint discrimination is poison to a free society. But in many countries with constitutions or legal traditions that claim to protect freedom of speech, serious viewpoint discrimination is now tolerated, and such discrimination has become increasingly prevalent in this country. At a time when free speech is under attack, it is especially important for this Court to remain firm on the principle that the First Amendment does not tolerate viewpoint discrimination.

However, three members of the court in Brunetti (Chief Justice Roberts, Justice Breyer, and Justice Sotomayor) drew a distinction between immoral marks and scandalous marks. While they agreed with the majority that the ban on immoral marks violates the First Amendment, they did not think this was the case with regard to the ban on scandalous marks. As Chief Justice Roberts pointed out:

…refusing registration to obscene, vulgar, or profane marks does not offend the First Amendment. Whether such marks can be registered does not affect the extent to which their owners may use them in commerce to identify goods. No speech is being restricted; no one is being punished. The owners of such marks are merely denied certain additional benefits associated with federal trademark registration. The Government, meanwhile, has an interest in not associating itself with trademarks whose content is obscene, vulgar, or profane. The First Amendment protects the freedom of speech; it does not require the Government to give aid and
comfort to those using obscene, vulgar, and profane modes of expression.

Before comparing the approach of the US Supreme Court with the situation in the EU, some caveats are necessary. It should be noted that the protection of freedom of expression in the EU (pursuant to both Article 10 of the European Convention on Human Rights and Article 11 of the Charter of Fundamental Rights of the European Union) is not as expansive as the First Amendment in the USA. Freedom of expression in Europe is subject to  limitations as stated in Article 10(2) of the European Convention on Human Rights.

Having said that, the CJEU recently had to address a case pertaining to the refusal to register a trademark on the grounds that it was contrary to the ‘accepted principles of morality’. Thus, in Constantin Film Produktion GmbH v. European Union Intellectual Property Office (EUIPO)the EUIPO had refused to register the mark ‘Fack Ju Göhte’ on the grounds that it would be contrary to the accepted principles of morality. This was upheld on appeal by the General Court. However, on the 27th of February 2020, the CJEU ruled in favour of the applicant in this case. Since the facts of the case predates Regulation (EU) 2017/1001, the court’s decision was based on a similar prohibition contained in Article 7(1)(f) of Regulation No 207/2009.

In its decision, the CJEU observed that the concept of ‘accepted principles of morality’ refers to the ‘fundamental values and standards to which a society adheres at a given time.’ According to the CJEU, those values and norms should be ‘determined according to the social consensus prevailing in that society at the time of the assessment.’ In this regard, the CJEU highlighted the need to adopt a contextual approach (rather than an abstract assessment of the mark) in making this determination. Thus, ‘due account is to be taken of the social context, including, where appropriate, the cultural, religious or philosophical diversities that characterise it, in order to assess objectively what that society considers to be morally acceptable at that time.’ [para 39]

So, what factors should inform this assessment? According to the CJEU at para 42:

…the examination is to be based on the perception of a reasonable person with average thresholds of sensitivity and tolerance, taking into account the context in which the mark may be encountered and, where appropriate, the particular circumstances of the part of the Union concerned. To that end, elements such as legislation and administrative practices, public opinion and, where appropriate, the way in which the relevant public has reacted in the past to that sign or similar signs, as well as any other factor which may make it possible to assess the perception of that public, are relevant.

The relevant public in this case consists of the German-speaking general public of the EU, particularly that of Germany and Austria.

In applying this contextual approach to the facts of the case, the CJEU appears to have been heavily influenced by the success of the applicant’s comedy that bears the same title as the mark being sought to be registered i.e. ‘Fack Ju Göhte’. As the CJEU notes at paras 51-53 of its judgment:

Thus, the fact that it is that mark itself which is to be examined does not mean that, in the course of that examination, contextual elements capable of shedding light on how the relevant public perceives that mark could be disregarded.

As the Advocate General observes in point 94 of his Opinion, those factors include the great success of the comedy of the same name amongst the German-speaking public at large and the fact that its title does not appear to have caused controversy, as well as the fact that access to it by young people had been authorised and that the Goethe Institute — which is the cultural institute of the Federal Republic of Germany, active worldwide and tasked, inter alia, with promoting knowledge of the German language — uses it for educational purposes.

In so far as those factors are, a priori, capable of constituting an indication that, notwithstanding the assimilation of the first part of the mark applied for to the English phrase ‘Fuck you’, the German-speaking public at large does not perceive the word sign ‘Fack Ju Göhte’ as morally unacceptable, the General Court, in concluding that that sign is incompatible with accepted principles of morality, could not rely solely on the intrinsically vulgar character of that English phrase without examining those factors or setting out conclusively the reasons why it considered, despite those factors, that the German-speaking public at large perceives that sign as running counter to the fundamental moral values and standards of society when it is used as a trade mark.

While the CJEU acknowledged that the success of a film does not automatically prove the social acceptance of its title, it noted that this provides an indication of its acceptance and this needs to be taken into account in assessing the perception of that sign [para 66]. Furthermore, the court noted that no concrete evidence had been put forward to explain why the German-speaking public at large will perceive the sign ‘Fack Ju Göhte’ as contrary to the fundamental moral values and standards of society when the same public did not seem to have been bothered by the comedies bearing the same title. [para 69]

Importantly, the CJEU emphasised the need to take into account freedom of expression when applying Article 7(1)(f). In its decision, the General Court had  suggested that this was unnecessary. During the appeal, the EUIPO had also argued, inter alia, that ‘the purpose of the exclusive right granted by a trade mark is to ensure undistorted competition and not freedom of expression’. [para 33]. However, as the CJEU notes at para 56:

…contrary to the General Court’s finding in paragraph 29 of the judgment under appeal, that ‘there is, in the field of art, culture and literature, a constant concern to preserve freedom of expression which does not exist in the field of trade marks’, freedom of expression, enshrined in Article 11 of the Charter of Fundamental Rights of the European Union, must, as EUIPO acknowledged at the hearing and as the Advocate General states in points 47 to 57 of his Opinion, be taken into account when applying Article 7(1)(f) of Regulation No 207/2009. Such a finding is corroborated, moreover, by recital 21 of Regulation No 2015/2424, which amended Regulation No 207/2009 and recital 21 of Regulation 2017/1001, both of which expressly emphasise the need to apply those regulations in such a way as to ensure full respect for fundamental rights and freedoms, in particular freedom of expression.

It would however have been helpful if the CJEU had devoted more than one paragraph to analysing the role of freedom of expression when applying Article 7(1)(f). Crucially, it is not clear from the CJEU’s analysis whether the refusal to register an ‘immoral’ mark necessarily violates freedom of expression.

More importantly, considering the contextual approach and the need for evidence regarding the public perception of a mark as suggested by the CJEU, one wonders whether an IP office is actually the proper forum for making assessments regarding the ‘fundamental moral values and standards of society’. Furthermore, is the commercial success of a film really an indicator that the relevant general public accepts the title of said film? What would constitute an indicator of public acceptance in other cases?

So, which approach is better? Is the approach of the US Supreme Court (i.e. treating the prohibition of the registration of immoral marks as a violation of freedom of expression) preferable? Or is the CJEU’s contextual and more nuanced (though unpredictable) approach preferable? I will let you, the reader, decide.

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