Supreme Court hears arguments in First Amendment trademark and tender offer negligence cases
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Supreme Court hears arguments in First Amendment trademark and tender offer negligence cases

The US Supreme Court heard oral arguments in two cases Monday to start off its April session: Iancu v. Brunetti, a free speech and trademark case, and Emulex Corp. v. Varjabedian, a question of faulty disclosures in public investment offers.

In Iancu v. Brunetti, the court will decide whether the Lanham Act’s “prohibition on the federal registration of ‘immoral’ or ‘scandalous’ marks is facially invalid under the Free Speech Clause of the First Amendment.”

Eric Brunetti was denied a trademark of his company’s logo, “FUCT,” because of its resemblance to the f-word. The trademark office denied his application, citing a provision of the Lanham Act, which is the primary governing trademark statute in the US, that said marks could not be “scandalous.” Brunetti argued that this was a violation of the First Amendment both as-applied to his case, but also in every case, because there is a “substantial amount of speech that is improperly refused under this provision,” and it is therefore “incredibly overbroad,” making it unconstitutional.

The government argued that the Lanham Act’s ban on federal registration of scandalous trademarks is “not a restriction on speech but a valid condition on participation in a federal program. On its face, and as applied here, the provision is viewpoint-neutral.”

Emulex Corp. v. Varjabedian asks whether securities investors can sue a company for failing to provide adequate information for the investors to use in evaluating the price of a tender offer.

The Ninth Circuit recognized an inferred private right to recover for negligent violations of a portion of the Securities Exchange Act of 1934, which proscribes “mak[ing] any untrue statement of a material fact … in connection with any tender offer.” Emulex argued Monday to reverse this decision, stating that there is no private right of action under the Act, and even if so, negligence is not a high enough for liability.