SO WHAT DOES THIS MEAN FOR DISTILLERS? While it is no longer necessary to consider the potential disparaging effects of a trademark for purposes of federal trademark registration, it’s unlikely that we will soon witness a substantial rise in the number of “disparaging” trademark applications for the simple reason that trademarks that offend consumers are unlikely to be commercially viable. The same might not be as true for scandalous or immoral marks, and for that reason it will be interesting to see what occurs in the wake of the Brunetti decision regarding the remaining portions of Section 2(a). Moreover, the First Amendment only restrains governmental entities from taking action that restrict free expression. Thus, a wholesaler or retailer can simply refuse to carry a product it views as disparaging, scandalous or immoral. Similarly, a trade association can choose to withhold certain member benefits from products it deems offensive. The Brewers Association, for example, recently announced that it would not permit the use of its Great American Beer TRADEMARKS Festival trademark in connection with a THAT OFFEND medal-winning beer whose name it CONSUMERS ARE deems offensive. UNLIKELY TO BE And Tam may have an even greater impact if and when COMMERCIALLY VIABLE.
distillers or other alcohol beverage producers use that precedent to challenge the host of federal and state alcohol beverage laws designed to enforce standards of morality and good taste in the marketing of such products. Federally, an Alcohol & Tobacco Tax & Trade Bureau (“TTB”) regulation prohibits on distilled spirits labels: (2) Any statement that is disparaging of a competitor's product. (3) Any statement, design, device, or representation which is obscene or indecent.5 A nearly-identical regulation applies to distilled spirit advertising. Fortunately for the industry, TTB rarely invokes these two prohibitions. But should TTB seek to invoke them, a distiller would likely have a robust First Amendment objection. In the wake of Tam, that position has become even stronger. TTB generally takes a light touch when it comes to labels that might be described as disparaging, obscene or indecent. The same cannot be said for certain state alcohol beverage control authorities. Even before the Tam decision, those state agencies have spawned a number of precedents in which alcohol beverage producers and advertisers successfully challenged government actions against allegedly obscene or indecent labels. Among them:
A 1998 Second Circuit Court of Appeals decision holding that the New York State Liquor Authority could not refuse to approve
27 C.F.R. § 5.42(a)(2) & (3)
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Published on Sep 19, 2017