On June 19, 2017, the United States Supreme Court in Matal v. Tam struck down the Lanham Act’s disparagement clause, which prohibits the registration of disparaging trademarks, finding that the provision violates the Free Speech Clause of the First Amendment. 582 U.S. __, No. 15-1293, 2017 WL 2621315 (U.S. June 19, 2017).
In an 8-0 ruling, the Court held that trademarks are private speech, not government speech or the subject of government subsidies or programs which may be withheld by the government. The Court further held that, even if trademarks are commercial speech, the disparagement clause cannot withstand relaxed scrutiny because it was not narrowly tailored to prevent discriminatory and demeaning trademarks. Consequently, the Court found the disparagement clause to be facially unconstitutional under the First Amendment.
Under Tam, the U.S. Patent and Trademark Office (USPTO) may no longer deny trademark registrations on the basis that the marks may be disparaging. Accordingly, Tam will undoubtedly have far-reaching consequences in the business community (and, not to mention, finally resolve the Washington Redskins case).
The Lanham Act’s Disparagement Clause
The Lanham Act’s disparagement clause prohibits the registration of trademarks “which may disparage . . . persons, living or dead, institutions, beliefs, or national symbols, or bring them into contempt, or disrepute . . . .” 15 U.S.C. § 1052(a).
Under the disparagement clause, the USPTO will find a prima facie case of disparagement where (1) the trademark refers to “identifiable persons, institutions, beliefs or national symbols,” and (2) a substantial percentage of the referenced group, “in the context of contemporary attitudes,” would consider the mark to be disparaging. Once a prima facie case is made, the burden shifts to the applicant of the mark to prove that the mark is not disparaging. The USPTO has clarified that the fact that the applicant is a member of the referenced group or has good intentions in using the mark does not change the analysis.
Simon Tam is the lead singer of “The Slants,” an Asian-American rock band. He chose the name “The Slants,” a variant of an ethnic slur, in order to reclaim stereotypes about people of Asian ethnicity.
In 2010, he applied to register the band name with the USPTO’s principal register. The USPTO rejected the application, finding that “there is . . . a substantial composite of persons who find the term in the applied-for mark offensive.” Tam contested the decision before the examiner and the USPTO’s Trademark Trial and Appeal Board (TTAB), but was denied.
Tam took the case to court, and the Federal Circuit ultimately held that the disparagement clause is facially unconstitutional under the First Amendment’s Free Speech Clause. The court held that the clause engages in viewpoint-based discrimination, regulating the expressive component of trademarks which cannot be treated as commercial speech, and that the clause cannot survive strict scrutiny.
The government filed a petition for certiorari, which the U.S. Supreme Court granted on the issue of whether the disparagement clause is facially invalid under the First Amendment.
Supreme Court Rules that the Disparagement Clause is Unconstitutional
As a threshold matter, the Court addressed Tam’s argument that the disparagement clause does not apply to marks that disparage racial or ethnic groups. The thrust of Tam’s argument was that the clause prohibits the registration of marks that disparage “natural persons,” not groups. The Court dismissed Tam’s definitional interpretation as “meritless” and refuted by the “plain terms” of the clause (noting that “every person is a member of a ‘non-juristic’ group, e.g., right-handers, left-handers, women, men, people born on odd-numbered days, people born on even-numbered days”). The Court also found that the clause applied broadly to encompass not only marks that disparage natural persons, but also marks that disparage “institutions” and “beliefs.”
Next, the Court addressed the government’s arguments that trademarks are government speech, that they are a form of government subsidy, and that the disparagement clause should be tested under the “government-program” doctrine.
First, the Court held that trademarks are private, not government speech, and are therefore entitled to free speech protections. In other words, because the government does not create, edit, or have the authority to arbitrarily reject marks, trademarks are not government speech and federal registration does not constitute approval of a mark. The Court also stated: “it is far-fetched to suggest that the content of a registered mark is government speech. If the federal registration of a trademark makes the mark government speech, the Federal Government is babbling prodigiously and incoherently . . . For example, if trademarks represent government speech, what does the Government have in mind when it advises Americans to . . . ‘Just do it’ . . . ?”
Second, the Court held that trademarks are not government-subsidized speech and, accordingly, the government could not justify the disparagement clause on the rationale that it is not required to subsidize activities that it does not wish to promote. Among other things, the Court noted that the USPTO does not pay applicants seeking to register a mark – rather, applicants pay the USPTO filing and other fees.
Finally, the Court held that “government-program” cases involving the collection of union dues by public employers were inapplicable to the registration of trademarks.
Given that the disparagement clause could not be analyzed as a type of government speech, subsidy, or program, the Court next addressed the parties’ arguments regarding whether trademarks are commercial speech, which is subject to relaxed scrutiny. The Court declined to resolve the issue, instead finding that the disparagement clause could not even withstand a relaxed scrutiny analysis. Specifically, the Court held that the disparagement clause was not sufficiently “narrowly drawn” to weed out trademarks that support invidious discrimination. Because the clause applies to trademarks that disparage any person, group, or institution, and would therefore apply to trademarks like “Down with racists,” “[i]t is not an anti-discrimination clause; it is a happy-talk clause.” “In this way, it goes much further than is necessary to serve the interest asserted.”
Concluding its opinion, the Court noted:
There is also a deeper problem with the argument that commercial speech may be cleansed of any expression likely to cause offense. The commercial market is well stocked with merchandise that disparages prominent figures and groups, and the line between commercial and non-commercial speech is not always clear, as this case illustrates. If affixing the commercial label permits the suppression of any speech that may lead to political or social “volatility,” free speech would be endangered.
Import of the Decision
With the disparagement clause of the Lanham Act struck down, the USPTO may no longer reject trademark registration applications because the trademarks are disparaging or offensive to a specific group, institution, belief, or symbol. This will undoubtedly result in the registration of myriad words, phrases, and marks that are considered by many to be derogatory. This also leaves the door open for the government to draft a more narrowly-tailored disparagement clause if it chooses to do so. The Tam case also signals a new chapter that calls into doubt other aspects of well-established trademark law. See 15 U.S.C. § 1052(a) (addressing immoral, deceptive, or scandalous matter). The full import of this case and its effect on the future of trademark law is uncertain.
Hannah T. Joseph, the author of this case summary, is an associate with the firm, whose work in intellectual property has been recognized by, among others, the Boston Globe (Can you trademark ‘covfefe’? These people and companies are trying) and at the Boston Bar (where she serves as Co-Chair of the Boston Bar Association’s Intellectual Property Committee).
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