By: Jon Avidor and Qualia Hendrickson
In a unanimous decision in Matal v. Tam, 582 U.S. __ (2017), the U.S. Supreme Court ruled that federal law prohibiting the registration of disparaging trademarks or service marks was unconstitutional under the First Amendment and that the United States Patent and Trademark Office (“USPTO”) may no longer reject applications to register trademarks deemed potentially offensive.
The “Disparagement” Clause of the Lanham Act
At issue in this case was Section 2(a) of the Lanham Act, which refused federal registration to trademarks and service marks that consist or comprise of “immoral, deceptive, or scandalous matter; or matter which may disparage or falsely suggest a connection with persons, living or dead, institutions, beliefs, or national symbols, or bring them into contempt, or disrepute . . . .” 15 U.S.C. § 1052(a). According to the Trademark Manual of Examining Procedure, in determining whether a proposed mark was disparaging, trademark examiners would look at “the likely meaning of the matter in question” based on the dictionary definition and other elements of the mark and how the mark is used, and “whether that meaning may be disparaging to a substantial composite”—not necessarily a majority—of the referenced, identifiable persons, groups, institutions, beliefs, or national symbols based on contemporary attitudes.
This prohibition—and case—only applied to registration of trademarks on the Federal Register (either the Principal Register or Supplemental Register). Federal registration provides substantial benefits to the trademark owner, including among other things, a legal presumption of nationwide ownership of a valid trademark, constructive notice to all other persons of the owner’s exclusive right to use the mark in commerce (plus the right to use the ® symbol), and greater monetary remedies in infringement lawsuits. However, prior to this case, potentially disparaging marks that would have otherwise been ineligible for federal registration could nevertheless develop common law trademark rights based on continued use in commerce.
Matal v. Tam concerned the Asian-American dance-rock band The Slants, or as their new EP cleverly refers to themselves, “The Band Who Must Not Be Named.” The band applied to register THE SLANTS trademark with the USPTO twice, first in March 2010 and again in November 2011, in Class 41 for use in connection with “Entertainment in the nature of live performances by a musical band.” The USPTO issued an office action denying the application under Section 2(a) of the Lanham Act because the likely meaning of “SLANTS” was a negative term used in reference to the shape of certain Asian people’s eyes “in a disparaging manner because it is an inherently offensive term that has a long history of being used to deride and mock a physical feature of those individuals.” On appeal, the refusal was affirmed by the Trademark Trial and Appeal Board.
Lead singer of the rock band and named appellant Simon Tam argued he named his group The Slants to “reclaim” and erode the Asian stereotype and slur and to empower other Asians to “be proud of their cultural heritage, and not be offended by stereotypical descriptions.” Through their songs and performances, The Slants “weigh in on cultural and political discussions about race and society,” which Tam argued are at the heart of the First Amendment’s protection of free speech and expression. The U.S. Court of Appeals for the Federal Circuit agreed with Tam in a 10-2 ruling, writing, “Whatever our personal feelings about the mark at issue here, or other disparaging marks, the First Amendment forbids government regulators to deny registration because they find the speech likely to offend others. Even when speech ‘inflict[s] great pain,’ our Constitution protects it ‘to ensure that we do not stifle public debate.'” The government appealed the ruling to the Supreme Court.
Appeal to the Supreme Court
The Supreme Court heard arguments on January 18, 2017 (prior to Justice Gorsuch’s appointment) and decided the case on June 19, 2017, holding 8-0 in favor of Tam and The Slants. Justice Alito delivered the opinion of the Court, and Justices Kennedy and Thomas filed concurring opinions. The high court upheld the Federal Circuit’s decision and struck down the disparagement clause of the Lanham Act as a facial violation of the First Amendment to the Constitution, agreeing that the Lanham Act’s provision prohibiting the registration of trademarks that may “disparage . . . or bring . . . into contemp[t] or disrepute” any “persons, living or dead” could not withstand legal scrutiny of laws that discriminate on the viewpoint of the speaker.
While the government may constitutionally regulate or prohibit certain types of speech, these restrictions are narrowed exceptions to the “fundamental principle of the First Amendment that the government may not punish or suppress speech based on disapproval of the ideas or perspectives the speech conveys.” Governmental restrictions on one’s speech based its the content, i.e., either the subject matter or viewpoint of the speech, must meet strict scrutiny, meaning the burden is on the government to prove that the content-based restriction is necessary to protect a compelling governmental interest and is narrowly tailored to serve that interest. The Lanham Act, as well as the Trademark Manual of Examining Procedures, generally establishes viewpoint-neutral guidelines for trademark examiners to determine whether to grant an applied-for mark based on factors such as the mark’s distinctiveness to the consuming public, its similarity to other existing marks in the marketplace, and the mark’s likelihood to confuse consumers, among others. However, the Court ruled that the disparagement clause at issue in this case provides the USPTO with broad discretion to reject trademark applications on the basis that the content could offend particular persons, groups, institutions, beliefs, cultures, or ideologies, and unconstitutionally placed the burden on the applicant to prove the mark was not disparaging—a burden Tam and The Slants could not overcome in their first appeal. While the Government argued that trademarks primarily serve to identify the source of good or services, and are therefore commercial speech entitled to lessor scrutiny than expressive speech, the Court held that allowing the government to approve or disapprove of a trademark’s expressive elements was a violation of applicants’ constitutional free speech rights, and that as a fundamental principle of the First Amendment, “Speech may not be banned on the ground that it expresses ideas that offend.”
In a concurring opinion, Justice Kennedy focused only on the disparagement clause’s viewpoint-based discrimination and how the government could not carve out a subset of language it did not approve of and disguise their viewpoint discrimination as censorship, writing, “By mandating positivity, the law here might silence dissent and distort the marketplace of ideas.” For that reason, the challenged provision of Section 2(a) of the Lanham Act could not pass rigorous scrutiny. He and Justices Ginsburg, Sotomayor, and Kagan found further discussion of the other arguments presented unnecessary.
In a separate concurring opinion, Justice Alito addressed the government’s other arguments, including the “government-speech” doctrine that the USPTO used to defend its right to express its own viewpoint, warning that the argument is susceptible to dangerous misuse. He distinguished this case from a 2015 case, Walker v. Sons of Confederate Veterans, 576 US __ (2015), in which the Court allowed Texas to refuse to print the confederate flag on specialty license plates because license plates are government speech. Justice Alito wrote, “Trademark is private, not government, speech,” and that to allow trademarks, which are created by private individuals or businesses, to be passed off as government speech by virtue of a government seal and registration to it would be to permit the government to limit and silence speech the government found offensive and infringe on individuals’ rights.
Implications on Future Trademarks
The Court’s decision in Matal v. Tam eliminating the disparagement clause of the Lanham Act will certainly open the door to registering trademarks that have been rejected or cancelled under the disparagement clause. Interestingly, Reuters found that, since 2014, the Supreme Court often disagrees with specialized intellectual property courts and has upheld only 2 of 16 cases decided by the Federal Circuit court of appeals, which hears appeals from the administrative Trademark Trial and Appeals Board and Patent Trial and Appeal Board.
Perhaps the most widely known and hotly debated case of a refusal of trademark protection occurred in 2015 when a judge in the U.S. District Court for the Eastern District of Virginia affirmed a 2014 ruling by the Trademark Trial and Appeal Board declaring that the Washington Redskins’ name was offensive to Native Americans, cancelling six of the football team’s trademark registrations. An appeal was on hold in the Court of Appeals for the Fourth Circuit pending the outcome of Matal v. Tam, though in light of the Supreme Court’s decision, the team, which has used the Redskins name since 1932 amid both wide support from fans and vocal criticism from Native American advocacy groups and in the media, believes their dispute with the government will resolve in their favor. The court of public opinion is an entirely different beast, however, so the future of Redskins brand remains to be seen, though in the meantime, owner Dan Snyder says he is “thrilled” with the ruling.
*We would like to thank our intern Qualia C. Hendrickson for her contribution to this article.