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Legal Watch: Sears & Patagonia File Suit, SCOTUS Reevaluates TM Law

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Sears Holding sets its sights on two dozen targets in a lawsuit alleging they illegally asset-stripped the former owner of Sears and Kmart to the tune of $2 billion in gain in the years leading up to its Chapter 11 bankruptcy. Named defendants include former head Edward Lampert, his hedge fund ESL Investments, and former ESL exec and current Treasury Secretary Steven Mnuchin.

Patagonia files suit against AB InBev, the parent of Anheuser-Busch, alleging that “AB has done everything possible to make it appear as though [its] ‘Patagonia’ beer is sold by Patagonia.” AB InBev was granted a trademark to sell Patagonia-branded beer in the U.S. in 2012, but the brewer sat on the name until 2018, when it started selling Patagonia beer with the branding in Colorado after years of success in Argentina. The Patagonia brand was created in the 1960s and is known for its mountain silhouette logo, environmental conservationism, and ski resort aesthetic—all of which Patagonia alleges AB InBev ripped off. Through its food business Patagonia Provisions, the apparel company began brewing its own beer, Long Root, in 2016 and recently launched its second beer earlier this year. AB InBev has stated that it will fight the suit.

Marks that are Immoral, Scandalous, Soon to Gain Protection?

The U.S. Supreme Court heard arguments in Iancu v. Brunetti, a case which weighs whether prohibition on the federal registration of “immoral” or “scandalous” trademarks is facially invalid under the First Amendment’s free speech clause. At issue was the mark FUCT, which was not spoken aloud during oral arguments, but painfully described as “the equivalent of the past participle form of … the paradigmatic profane word in our culture.”

The counter-culture streetwear brand FUCT was created in the 1990s by Erik Brunetti, who hasn’t been able to secure federal protection since.

The question hinges on a definition of public decency, but as was pointed out by several justices during oral argument, the standard is constantly shifting and practically impossible to pin down. As Slate points out, the U.S. Patent & Trademark Office (USPTO) applies the law in a way that appears quite arbitrary. The USPTO

has approved the trademark “Cumbrella” and rejected “Cum Together.” It has approved “Whores From Hell” and rejected “The Christian Prostitute.” It has approved “Grammar Nazi” while rejecting “Coffee Nazi” and “Surf Nazi.” “Dykes on Bikes” and “Dyke Night” are OK, but “2 Dykes Minimum” is not. “Anal Fantasy Collection” got registered while “A-Hole Patrol” was refused. “Party With Sluts,” “Wondrous Vulva Puppet,” “Laughing My Vagina Off,” and “I Am Strung Out Like a Crack Whore in Spandex” were all approved. “Camel Toe Surf Wax,” “Tasty Twats,” “Bubby Trap,” and “Pussywear” were all denied registration by the PTO.

There are several factors that may affect whether one mark is worthy of registration over another—such as the sensibilities of the specific targeted audience as well as the class of products/services sought to be protected. But if the application of the law is deemed too arbitrary, that would be a strike against its constitutionality.

The provision at issue is closely related to one the Court held to be unconstitutional in 2017 in a case called Matal v. Tam, which prohibited federal registration of marks that “disparage” an individual or group of people. In Tam, an Asian-American dance-rock band sought protection for its name The Slants and were ultimately granted the right to seek registration on First Amendment grounds.


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