The Lanham Act, enacted in 1946, is the primary federal statute dealing with the registration and enforcement of trademarks. One provision of that statute states that the U.S. Patent and Trademark Office (PTO)--the agency that oversees federal trademarks--may not register a mark that would “disparage.”
The PTO has relied on this language to refuse to register certain marks that would be offensive, for example those that would constitute racial slurs.
This provision of the patent law was challenged by an unlikely source: an Asian American rock band called The Slants. In 2011, the band sought to trademark its name with the PTO, but its application was denied for being “disparaging” to Asian Americans.
Unanimously affirming the U.S. Court of Appeals for the Federal Circuit, the U.S. Supreme Court handed a major victory to the band in its June 19, 2017 decision, invalidating Section 2(a) on First Amendment grounds. The decision (Matal v. Tam, 582 U.S. ___ (2017)), has broad implications for the types of marks that the PTO will now be required to register.
In 2011, Simon Tam, the lead singer of The Slants, chose the band’s name “in order to “reclaim” and “take ownership” of stereotypes about people of Asian ethnicity. According to the Supreme Court’s summary of the facts, the musical group “draws inspiration for its lyrics from childhood slurs and mocking nursery rhymes” and giving its albums names such as “The Yellow Album” and “Slanted Eyes, Slanted Hearts.” Its name, therefore, is part of the group’s artistic and social commentary.
The Slants challenged the examiner’s finding before the PTO’s Trademark Trial and Appeal Board (TTAB), to no avail. The initial rejection was affirmed.
Subsequently, the band sought a review of that decision in federal court, where the U.S. Court of Appeals for the Federal Circuit ultimately found the disparagement clause facially unconstitutional under the First Amendment’s Free Speech Clause. The majority in that case held that “the clause engages in viewpoint-based discrimination, that the clause regulates the expressive component of trademarks and consequently cannot be treated as commercial speech, and that the clause is subject to and cannot satisfy strict scrutiny.” In other words, the First Amendment does not permit the government to permit the viewpoint or content of speech, regardless of whether or not it may offend.
The government appealed the Federal Circuit's ruling, and the Supreme Court heard oral argument on the case in January 2017.
The U.S. Supreme Court was called upon to address, among other arguments, the constitutionality of the a section of the Lanham Act that empowers the PTO to decline to register "disparaging" trademarks. Understanding this provision is critical to understanding the Court's ultimate decision in Matal v. Tam.
While it is not required that trademarks be federally registered, registering with the PTO confers a number of benefits that are important, or even critical, for many businesses.
As the Court noted, registration “(1) serves as constructive notice of the registrant’s claim of ownership’ of the mark…. (2) is prima facie evidence of the validity of the registered mark and of the registration of the mark, of the owner’s ownership of the mark, and of the owner’s exclusive right to use the registered mark in commerce on or in connection with the goods or services specified in the certificate…. and (3) can make a mark ‘incontestable’ once a mark has been registered for five years.” Moreover, registration enables the trademark holder to stop the importation into the United States of articles bearing an infringing mark.
Under 15 U.S. Code § 1052, the PTO may not register a trademark that “[c]onsists of or comprises 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....”
Trademark examiners employed by the PTO would have the ability and responsibility to deny marks that appear to be disparaging. Generally, the PTO would consider the meaning of the mark in common usage, and whether or not the mark would be considered to be disparaging to a substantial composite of the group referenced by the mark.
The PTO’s trademark examiner rejected the trademark application, however, finding that a substantial composite of persons of Asian decent would find the name to be disparaging. In making this determination, the examiner relied on numerous dictionaries and other commentary regarding the mark’s connotations.
When examining potential violations of the disparagement clause, the PTO typically applies a two-part test. First, the examiner considers the likely meaning of the mark using both dictionary definitions and the manner in which the mark is used in connection with particular goods or services. According to Trademark Manual of Examining Procedure §1203.03(b)(i), “If that meaning is found to refer to identifiable persons, institutions, beliefs or national symbols,” the examiner moves to the second step, asking “whether that meaning may be disparaging to a substantial composite of the referenced group.”
If the examiner next concludes that a “substantial composite, although not necessarily a majority, of the referenced group would find the proposed mark . . . to be disparaging in the context of contemporary attitudes,” then sufficient cause exists to deny registration unless the trademark applicant can prove otherwise.
In a unanimous 8-0 decision, on June 19, 2017, the Supreme Court affirmed the decision of the U.S. Court of Appeals for the Federal Circuit. (Justice Neil Gorsuch, who had just joined the Court, did not participate in the deliberation of the case).
Justice Samuel Alito authored the majority opinion, holding that 15 U.S. Code § 1052 “offends a bedrock First Amendment principle: Speech may not be banned on the ground that it expresses ideas that offend.”
Justice Alito offered a robust explanation of the role of free speech in American society. The First Amendment “prohibits Congress and other government entities and actors from ‘abridging the freedom of speech.’” Yet federal trademark registration is a somewhat unique example of private speech that is subject to government approval and oversight. The government, on behalf of the PTO, argued that trademarks represent “government speech” similar to the statues that exist in a public park. Following this logic, the federal government and its agencies should have the ability to approve or deny of the marks that individuals seek to federally register, since that register is maintained and controlled by the government.
But the Court rejected these arguments, stating unequivocally that “Trademarks are private, not government, speech." Citing decades of constitutional precedent, the Court noted that “the public expression of ideas may not be prohibited merely because the ideas are themselves offensive to some of their hearers.” If there is a bedrock principle underlying the First Amendment, the majority held, “it is that the government may not prohibit the expression of an idea simply because society finds the idea itself offensive or disagreeable.”
For the government to restrict speech, it must show that its regulations are “narrowly drawn” to support an essential government purpose. But Justice Alito dismantled this possible avenue to saving the statute, too. Not only did the government fail to articulate any essential purpose in prohibiting certain marks, but the disparagement clause was very broadly written, capturing all sorts of speech and leaving government officials with too much discretion.
The Court quipped that, as drafted, the disparagement clause is not even an anti-discrimination clause, "it is a happy-talk clause." It is not narrowly tailored to achieve a specific essential government interest.
In short, 15 U.S. Code § 1052 might seem, in theory, like a smart way to prevent offensive and disparaging trademarks from flooding the market. But the issue is who has the power to determine what is “offensive” or “disparaging.” These determinations are inherently subjective. What offends one person might empower another; what might seem disparaging to one person might inspire another. The Slants, themselves Asian Americans, sought to “take back” the term “slant” as a disparaging moniker. Consequently, they argued that it was inappropriate for a government official to make a determination about their speech, categorizing it as “disparaging” when, in fact, they meant it was quite the opposite.
Perhaps more than most Supreme Court cases about intellectual property rights, the Tam case received much national press attention. Partly, this was because of a compelling set of facts that most non-lawyers can understand; and perhaps feel some degree of sympathy on both sides.
The case also received an unusual amount of attention because of parallel litigation involving the Washington Redskins football team. Because “redskins” is a derogatory name for Native Americans, the football team has faced its own battle with the PTO over its mark, as well as a good amount of public pressure to change the team’s name. Not surprisingly, the Supreme Court’s decision in Tam bodes well for the Redskins’ ability to retain its federal trademark registration.
The most immediate legacy of Matal v. Tam will be the new marks that the PTO will now be required to register. Words and logos that might seem offensive and disparaging will now find themselves qualifying for federal trademark registration.
Some have criticized the Court's decision, worrying that it could flood the market with derogatory racial and ethnic slurs. Others, however, emphasize that the free market, rather than government officials, should decide whether speech is “disparaging.” In other words, if a company wants to be successful in the market, it would think twice before using an offensive trademark for its products and services. Under this new case law, that judgment ultimately belongs to the trademark applicant rather than the government.
Effective Date: June 19, 2017