Are portions of the Federal Regulations and the Federal Alcohol Administration Act governing alcohol labeling and advertising FUCT?

The Supreme Court just granted cert in the Patent and Trademark Office’s appeal of In re Brunetti, 877 F.3d 1330 (Fed. Circ. 2017). It’s important for First Amendment and advertising buffs because it’s the first extension case pressing the rationale of the court’s recent landmark Matal v. Tam, 137 S.Ct. 1744.

As a refresher, in Tam the Supreme Court invalidated some language in a section of the Lanham Act (trademark law) barring the registration of “disparaging” marks because that prohibition violated the free speech clause of the First Amendment.

That same section 15 USC 1052(a) also prohibits quite a few other things such as bringing national symbols into disrepute and marks that are immoral or scandalous. The list is long and much of it is meat for a First Amendment challenge. And that’s what’s happening in Brunetti; a challenge to the immoral and scandalous prohibitions of the trademark law.

In Brunetti, the USPTO denied applications for an athletic apparel mark “FUCT” holding it comprised immoral or scandalous matter because it sounds like fucked so it could be prohibited under Section 2(a). Brunetti appealed to the Federal Circuit and won. The Federal Circuit held that the mark was immoral or scandalous and also held that that didn’t matter because Section 2(a)’s bar on scandalous or immoral trademarks was an unconstitutional restriction of free speech.

The USPTO’s appeal of that decision by the Federal Circuit finding that restrictions on registering scandalous or immoral marks violates free speech rights is what the Court will be hearing. Why the Court decided to wade back into these waters is an interesting question. Perhaps with all nine members hearing the case this time, they want to put the matter to rest so lower courts are not stuck splitting hairs over which portions of the Lanham Act violate free speech rights and which don’t – like the same section’s ban on marks that might dilute other marks through tarnishment.

It all matters to alcoholic beverage manufacturers because similar prohibitory provisions exist in both the Federal Regulations and the Federal Alcohol Administration Act. Prohibitory provisions that would most certainly not withstand a similar First Amendment challenge if the TTB tried to enforce them.

Back when the Court decided Tam we made the case that the ruling about disparaging marks – and many other types of content restrictions such as indecent or obscene in the Federal Regulations and the Federal Alcohol Administration Act would be held unconstitutional under the same rationale as Tam if anyone ever had need to challenge them.

As a refresher on the Federal Regulations governing alcoholic beverage labeling and advertising:

• 27 CFR 4.39 Wine Labeling
• 27 CFR 4.64 Wine Advertising
• 27 CFR 5.42 Distilled Spirits Labeling
• 27 CFR 5.65 Distilled Spirits Advertising
• 27 CFR 7.29 Malt Beverage Labeling
• 27 CFR 7.54 Malt Beverage Advertising

each contain the following provision regarding certain statements that are prohibited on labeling and advertising for their respective alcoholic beverages:

(2) Any statement that is disparaging of a competitor’s products.

(3) Any statement, design, device, or representation which is obscene or indecent.

Similarly, the Federal Alcohol Administration Act, 27 USC 205 (e)(4) and (f)(4) prohibit both labels and advertising (respectively) that contain statements that “are disparaging of a competitor’s products or are … obscene, or indecent”.

In each instance, disparaging a competitor products, obscenity, and indecency, all of them smack of viewpoint discrimination and are usually going to be unconstitutional as applied and almost certainly are subject to a challenge of being unconstitutional on their face. It is only a matter of time until some distillery, a winery or a brewery submits a label for approval or places an advertisement violating one of these provisions and gets called out by the TTB, either through having their label rejected or through being cited for an advertisement that violates these prohibitions. When that happens, the lucky brewery, winery, or distillery is going to have a great case, a constitutional challenge in line with Rubin v. Coors Brewing.