​​On September 29, 2016, the Supreme Court agreed to review Lee v. Tam, better known as “THE SLANTS” case, to assess the constitutionality of the Trademark Office’s refusal to register disparaging marks under Section 2(a) of the Lanham Act. In re Simon Shiao Tam, 808 F.3d 1321 (Fed. Cir. 2015), cert. granted sub nom., Lee v. Tam, (U.S. Sep. 29, 2016) (No. 15-1293).

How Tam Rocked the Lanham Act

Simon Shiao Tam, a founding member of the band The Slants, applied to register THE SLANTS as a trademark in 2011 for use with his band’s live music performances. Tam chose The Slants as his band’s name in an effort “to ‘reclaim’ and ‘take ownership’ of Asian stereotypes.” The Trademark Office rejected the application on the grounds that the mark “‘deride[s] and mock[s] a physical feature’ of people of Asian descent.” This determination that THE SLANTS was disparaging was affirmed on appeal by the Trademark Trial and Appeal Board and then again on appeal by the Federal Circuit, before being reheard and vacated by the Federal Circuit, sitting en banc.

The Federal Circuit’s Spin on the First Amendment

With the Federal Circuit’s first decision in THE SLANTS case, an ordinary Section 2(a) refusal became a major First Amendment case, threatening the constitutionality of the Lanham Act. After affirming the Trademark Trial and Appeal Board’s decision, Judge Moore separately issued an opinion under the title “additional views” regarding why the disparaging trademark exclusion in Section 2(a) was unconstitutional. Following Judge Moore’s “additional views,” the Federal Circuit agreed to hear the case again and sitting en banc Judge Moore wrote the opinion for the Federal Circuit holding that the disparaging trademark exclusion was unconstitutional.

Section 2(a) of the Lanham Act precludes registration of marks consisting 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.” This section has prevented the registration of numerous applications for marks containing racial slurs, swear words, and arguably vulgar designs over the last several decades. The 9-3 majority of the Federal Circuit sitting en banc determined that excluding disparaging marks from registration is a viewpoint-based denial of protection of speech by private speakers that cannot be reconciled with the First Amendment.

The most significant conclusions that the Federal Circuit majority drew were: (1) the disparagement exclusion is viewpoint based, rather than content based, because it precludes registration of marks that describe groups in a negative way but allows registration of marks that refer to groups in a positive way; (2) although the government can discriminate against speech based on viewpoint when the speech is considered to be that of the government itself, federal trademark registration is not government speech and is a regulatory activity; and (3) even if registering a trademark is considered a subsidy or benefit, the denial of an available benefit based on the viewpoint of speech is still unconstitutional. The dissenting judges disagreed with a number of the majority’s conclusions, namely, whether trademark registration is government speech and whether the government has a sufficiently justifiable interest in restricting subsidies.

The Supreme Court Joins the Band

The government filed a petition for certiorari, arguing that Section 2(a) “does not restrict any speech or restrain any form of expression,” as federal trademark registration is a federal benefit and Congress has latitude to consider the content of speech in defining terms on which benefits are provided; and further, Section 2(a) does not restrict the use of marks or restrict a mark owner’s common law trademark rights. Tam agreed that certiorari should be granted but requested that the Supreme Court affirm the Federal Circuit’s judgment, arguing that the disparagement provision is contrary to the First Amendment and unconstitutionally vague.

The Supreme Court will now review the Federal Circuit’s In re Tam decision at a time when the disparaging mark exclusion in section 2(a) has become a hot topic, particularly in light of the media attention that the REDSKINS case has garnered. Pro-Football, Inc. v. Blackhorse, 112 F. Supp. 3d 439 (E.D.Va. 2015), appeal docketed, No. 15-1874 (4th Cir. Aug. 6, 2015). Several registrations of the REDSKINS mark, used by the Washington Redskins NFL football team, were canceled by the TTAB on the grounds that REDSKINS was disparaging of people of Native American descent. This case has been appealed to the Fourth Circuit Court of Appeals, and oral argument was recently calendared for this December 2016. Pro-Football petitioned the Supreme Court to review the REDSKINS district court decision before the case has been heard by the Fourth Circuit, but the Supreme Court denied Pro-Football’s request.

Based on the question presented in Lee v. Tam, the Supreme Court made clear that its grant of review is only as to the disparagement provision in Section 2(a) of the Lanham Act, 15 U.S.C. 1052(a), but the outcome of this case will affect the other types of marks excluded by Section 2(a), such as marks that may be viewed as immoral or scandalous. Indeed, in a footnote in its en banc decision the Federal Circuit “recognized…that other portions of § 2 may likewise constitute government regulation of expression based on message, such as the exclusions of immoral or scandalous marks….”

The potential impact of Lee v. Tam and the future of Section 2(a)

Would the unconstitutionality of the disparagement provision open the floodgates for the registration of marks like “I HATE XYZ COMPANY”? This could be a consequence of holding the disparagement provision unconstitutional because there’s an argument that use of I HATE XYZ COMPANY wouldn’t suggest a false association or be likely to cause consumer confusion, as consumers would not think XYZ Company is the source of goods and services provided under the I HATE XYZ COMPANY mark. (The UDRP has adopted this perspective in several domain cases involving the addition of “-sucks” to a well-known trademark, finding it to be an obvious indication that a domain name is not affiliated with that trademark owner. See Wal-Mart Stores, Inc. v. walmartcanadasucks.com, WIPO Case No. D2000-1104.) But the disparagement provision or other clauses in Section 2(a) are not the only provisions preventing registration of I HATE XYZ COMPANY marks now. Dilution law could prevent registration of I HATE FAMOUS COMPANY marks, and the likelihood of confusion analysis could prevent registration of I HATE XYZ COMPANY depending on how the likelihood of confusion factors are weighed.

It could be argued that the entirety of Section 2(a) is unconstitutional if the Supreme Court determines that the disparagement provision is unconstitutional. However, it seems more likely that the unconstitutionality of the disparagement provision would only be relevant to Section 2(a)’s exclusion of immoral or scandalous marks or marks that bring persons, institutions, beliefs, or national symbols into contempt or disrepute, rather than also being relevant and applicable to 2(a)’s exclusion of marks that are deceptive or that falsely suggest connection with persons, institutions, beliefs, or national symbols, or marks featuring a false geographical indication for wine/spirits. The government has a legitimate interest in, and the core purpose of the Lanham Act is, protecting consumers from misleading acts and preventing consumer confusion. Section 2(a)’s exclusion of deceptive marks and marks suggesting false association or origin are a means of protecting consumers from this confusion.

Further, if the disparagement provision is unconstitutional, it could be argued that other restrictions in the statute are viewpoint based. Taken to the logical extreme, even the entirety of the statute is unconstitutional: it is discrimination against a viewpoint intended to create confusion. However, the government has an interest in protecting consumers from fraudulent and misleading acts, so even if other provisions that protect consumers could be viewpoint-based, it seems likely that much of the Lanham Act can meet the high standard of strict scrutiny.

The outcome of Lee v. Tam will have a significant impact on US trademark law, and given the potential for this decision to apply to other provisions in the Lanham Act, it will be important for the Supreme Court to make clear the parameters of the decision and how it may or may not apply to other parts of the Lanham Act.

Originally published in IP Watchdog​ on October 5, 2016