Supreme Court Abolishes Ban on Offensive Trademarks
July 5, 2017

By Ryan M. Wiesner

On June 19, 2017, the United States Supreme Court released a monumental decision championing free speech and changing the landscape of trademark law. In Matel v. Tam, the Court struck down as unconstitutional the “disparagement clause” of the Lanham Act, which permitted the United States Patent and Trademark Office (USPTO) to refuse federal registration to trademarks believed to be disparaging, or offensive. The clause was ultimately found to violate First Amendment free speech rights. The decision is already having a major impact. The disparagement clause became a focus of media attention in the last few years, with the federal government challenging as offensive the NFL Washington franchises’ “Redskins” moniker. As of June 29, 2017, though, the Justice Department has officially halted its efforts to strip the “Redskins” name of federal trademark registration in light of the Supreme Court’s decision in Tam.

Background facts and lower court holding

The case stems from an Asian-American dance-rock band’s attempt to obtain federal trademark registration over the name “The Slants.” The USPTO assessed the band’s application and refused to register the mark under 15 U.S.C. § 1052(a), known as the disparagement clause. The clause provides that the USPTO may refuse to register a trademark on the principal register if the mark is found to “disparage” any “person, living or dead.” This provision has been determined to apply to “non-juristic” persons such as racial or ethnic groups. While applicants denied federal registration can still use their mark, and enjoy some benefits and protections under federal and state law, they lose major benefits that come with being listed on the Principal Register—including obtaining exclusives rights to use the mark in commerce, enjoying the presumption of exclusive and valid ownership in their mark, and preventing importation of infringing goods. So while not necessary, federal trademark registration is an extremely valuable asset.

The examiner who reviewed “The Slants” application applied a two-part test and found (1) that the mark was associated with an identifiable group (Asians) and (2) that the mark’s meaning “may be disparaging to a substantial composite” of persons of Asian ethnicity—a finding based in part on the definitions of the terms “slants” and “slant-eyes”. The burden then shifted to the band to show that the mark was not disparaging. The band’s lead singer, Simon Tam, tried to accomplish this by dis-closing that he chose the mark not to offend Asian-Americans, but to repurpose an ethnic slur and rebrand it with a positive meaning.

Tam lost this fight, unsuccessfully went through the Trademark Trial and Appeal Board (TTAB) appeals process, and eventually appealed to the Court of Appeals for the Federal Circuit. Sitting en banc, the Federal Circuit sided with Tam and his band mates, finding that the disparagement clause was facially unconstitutional be-cause it amounted to “view-point discrimination” that did not pass strict scrutiny, i.e., the clause was not narrowly tailored to serve an important government interest.

The Supreme Court’s view

The government petitioned the Federal Circuit’s decision to the Supreme Court, which granted certiorari to answer a single question: whether the disparagement clause in the Lanham Act “is facially invalid under the Free Speech Clause of the First Amendment.”

The Court, in an 8-0 decision authored by Justice Samuel Alito (joined in part by Chief Justice Roberts and Justices Thomas and Breyer), agreed with the Federal Circuit and held that the Lanham Act’s disparagement clause is facially unconstitu-tional because it violated the First Amendment. Justice Alito reaffirmed the Court’s longstanding position that the First Amendment protects even offensive viewpoints. He elaborated that:

Speech that demeans on the basis of race, ethnicity, gen-der, religion, age, disability, or any other similar ground is hateful; but the proudest boast of our free speech ju-risprudence is that we protect the freedom to express ‘the thought that we hate.’

The Court, in so holding, shot down all arguments the government raised to defend the disparagement clause. Specifically, the Court ruled against the government’s claims that trademarks are (1) “government speech” exempt from First Amendment scrutiny; (2) a government “subsidy” subject to government control; and (3) “com-mercial speech” subject to a lesser standard of review.

The Court included several noteworthy quotes in denying each of these arguments. In striking down the “government speech” theory, Justice Alito recognized that if trademarks were considered government expression the federal government would be “babbling prodigiously and incoherently.” He illustrated his point by asking, “if trademarks represent government speech, what does the Government have in mind when it advises Americans to . . . ‘Just do it’ or ‘Have it your way?’” as Nike and Burger King suggest consumers to do. Justice Alito’s point is that just because the government issues trademark registrations does not mean it endorses the mark’s meaning or expression and, therefore, it has no real interest or right in monitoring a trademark’s overall meaning, even if it offends the masses.

Justice Alito also denied the government’s justifications for the clause. The govern-ment and its amici defended the USPTO’s ability to refuse registration for certain marks by highlighting the disparagement clause’s important purposes, including preventing underrepresented groups from being “bombarded with demeaning mes-sages in commercial advertising” and protecting the flow of commerce from racist, sexist, or other discriminatory marks.

The Court, though, dressed down these justifications and determined they amounted to nothing more than the government’s belief that it has an unrestricted “interest in preventing speech expressing ideas that offend.” But Justice Alito recognized that this belief contradicts longstanding First Amendment jurisprudence that “speech may not be banned on the ground that it expresses ideas that offend.” Viewpoints may be offensive, but the First Amendment protects the right to express offensive ideas, even in trademark form.

The Court’s decision, again, has already had major implications, with the govern-ment throwing in the towel on its challenge to the Washington Redskin’s trademark. Surely other pending litigation focused on this issue will come to a close sooner than expected and the USPTO will likely see an increase in applications for, and registrations issued to more colorful, offensive trademarks.

Please contact your Davis & Kuelthau, s.c. attorney or the author noted above if you have any questions.

 

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