According to the 2d circuit's opinion:
A picture of a frog with the second of its four unwebbed "fingers" extended in a manner evocative of a well known human gesture of insult has presented this Court with significant issues concerning First Amendment protections for commercial speech. The frog appears on labels that Bad Frog Brewery, Inc. ("Bad Frog") sought permission to use on bottles of its beer products. The New York State Liquor Authority ("NYSLA" or "the Authority") denied Bad Frog's application.
fn 1. The gesture, also sometimes referred to as "flipping the bird," see New Dictionary of American Slang 133, 141 (1986), is acknowledged by Bad Frog to convey, among other things, the message "f**k you." The District Court found that the gesture "connotes a patently offensive suggestion," presumably a suggestion to having intercourse with one's self.
The court applied the Intemediate Scrutiny test applicable to Commercial Speech cases as determined by the Central Hudson case. The question for the state, then, is "What is your substantial governmental interest in prohibiting this label?" The state of New York says that it has a substantial interest in protecting children from exposure to vulgarity.
If those are appropriate ends, then what are the means that New York has chosen to protect children from vulgairty? New York responds that the way it has chosen to protect children from vulgarity is to ban the friggin' frog label. Does this action directly advance the stated substantial governmental interest?
Our point is that a state must demonstrate that its commercial speech limitation is part of a substantial effort to advance a valid state interest, not merely the removal of a few grains of offensive sand from a beach of vulgarity.
Therefore, the state's interference with Bad Frog's commercial speech is an unconstitutional infringement.
The Bad Frog label:
Connecticut had a similar problem when it banned the use of Seriously Bad Elf beer's label on the grounds that it appealed to children. Connecticut relented when Bad Elf threatened suit.