Digest of In re Tam, No 2014-1203, (Fed. Cir. Apr. 20, 2015) (precedential). On appeal from United States Patent and Trademark Office, Trademark Trial and Appeal Board. Before Lourie, Moore, and O’Malley.

Procedural Posture: Applicant appealed from a TTAB decision affirming the examining attorney’s refusal to register the mark THE SLANTS because it is disparaging. CAFC affirmed. (An order issued on April 27, 2015 vacated the panel opinion and reinstated the appeal following a sua sponte request for a poll on whether to consider the case en banc.)

  • Disparagement: The TTAB did not err in finding the mark THE SLANTS disparaging under the Lanham Act. The TTAB did not improperly consider the prior applications by Mr. Tam in regards to the manner of use for the time period during which Mr. Tam asserts the mark was used. The fact that a number of innocuous meanings exist for the mark does not foreclose the possibility that the term may be used in an offensive manner. The manner in which the applicant uses the mark in the marketplace is dispositive of its likely meaning. The record shows that Mr. Tam’s own statements describe the mark as being “derived from an ethnic slur for Asians.” Furthermore, both individuals and Asian groups have perceived the term as being an offensive and racist term referring to people of Asian descent. In this regard the TTAB found that there was substantial evidence that the term was likely offensive to a substantial composite of persons of Asian descent even without a marketing survey or other quantitative measure of the term’s offensiveness. Therefore, the CAFC found that the TTAB correctly applied the two part test of Geller in finding the mark disparaging.
  • First Amendment: Section 2(a) of the Lanham Act does not place an unconstitutional restriction on free speech by conditioning a benefit on the relinquishment of speech. The CAFC found that under current precedent the PTO’s refusal to register a mark does not affect the ability to use the mark. Therefore, refusing to register a mark does not implicate the First Amendment.
  • Vagueness: The test for determining whether a mark is disparaging is well-established and the TTAB followed the appropriate two-part test set forth in Geller. Therefore, the standard is not unconstitutionally vague.
  • Due Process: Mr. Tam argues that there are registered trademarks that are offensive to different groups of people evidencing the arbitrary nature of trademark adjudication and violation of his due process rights. The CAFC found no violation of due process as Mr. Tam was afforded a full opportunity to prosecute this application and appeal the unfavorable decision. The CAFC noted that previous errors do not bind the USPTO to improperly register Mr. Tam’s disparaging mark.
  • Equal Protection: Mr. Tam argues that the examining attorney’s rejection of his application hinged on the ethnic identities of him and his bandmates. The CAFC found that the record showed that the denial of the mark was due to the mark’s use in a disparaging manner and not on account of his race. This nondiscriminatory reason for denying the mark precludes a showing of a violation of equal protection.

Additional views by Judge Moore:

  • First Amendment: The current precedent under McGinley regarding the constitutionality of § 2(a) of the Lanham Act should be revisited. Trade names are commercial speech and protected under the First Amendment. Refusal to register a mark that is disparaging denies benefits in connection with commercial speech and at the very least has a chilling effect on speech. The nature of the benefits derived from registered marks supports the conclusion that these benefits are not government subsidies. Additionally, the USPTO is now funded using user fees rather than government funding. The purpose of the Lanham Act which is derived from the Commerce Clause further supports that these benefits are not the result of Congress’ spending power. In this manner the USPTO is acting as a regulating body that applies content-based regulations on speech. However, there is not a legitimate government interest in discouraging the use of disparaging marks. Therefore, the current precedent under McGinley should be reexamined.