In In re Tam, 117 U.S.P.Q.2d 1001 (Fed. Cir. 2015), the U.S. Court of Appeals for the Federal Circuit rocked the trademark world by deeming the disparagement bar of Lanham Act Section 2(a) unconstitutional because it violates the Freedom of Speech Clause of the First Amendment.

What This Means to You

  • The court’s opinion suggests that the “immoral or scandalous” prohibition of Section 2(a) may likewise be unconstitutional.
  • The decision, if it stands, will clear the way for future registration of marks that people may consider even more offensive.

Case Background

In April 2015, the Federal Circuit affirmed the Trademark Trial and Appeal Board’s 2013 decision upholding the refusal of the U.S. Patent and Trademark Office to register the mark THE SLANTS for “entertainment in the nature of live performances by a musical band” on the ground that the mark is disparaging of persons of Asian descent, in violation of Section 2(a). One week later, however, the court vacated its decision and ordered a re-hearing en banc, directing the parties to address the following question: “Does the bar on registration of disparaging marks in 15 U.S.C. § 1052(a) violate the First Amendment?”

Decision Analysis

After the en banc re-hearing, the Federal Circuit vacated the TTAB’s 2013 ruling, holding that “The government regulation at issue amounts to viewpoint discrimination, and under the strict scrutiny review appropriate for government regulation of message or viewpoint, we conclude that the disparagement proscription of § 2(a) is unconstitutional.”

For more than 30 years, the TTAB and the Federal Circuit had followed the 1981 ruling of the U.S. Court of Customs and Patent Appeals in In re McGinley, which tersely stated that a Section 2(a) refusal did not abridge an applicant’s First Amendment rights because the refusal to register a mark did not affect the applicant’s right to use the mark, since “[n]o conduct is proscribed, and no tangible form of expression is suppressed.”

In Tam, the Federal Circuit observed that although Section 2(a) does not prevent the use of a disparaging mark, federal registration of a mark confers significant benefits on a trademark owner, benefits that are not available when the mark is not registered. For example, a federal registrant has a right to exclusive nationwide use of the mark where there was no prior use by others. A registered mark is presumed valid and use of the mark may become incontestable after five years. The registrant may enforce the mark in federal court and may recover treble damages for willful infringement. The registrant may obtain the assistance of the U.S. Customs and Border Protection agency in restricting importation of infringing or counterfeit goods, and may qualify for a simplified process for obtaining recognition and protection of the mark in countries that have signed the Paris Convention. Registration also provides a complete defense to state or common law claims of trademark dilution.

The court noted that many of the Lanham Act’s provisions that bar registration concern “deceptive” speech and do not run afoul of the First Amendment. Section 2(a), however, is a “hodgepodge” that includes restrictions “based on the expressive nature of the content, such as the ban on marks that may disparage persons or are scandalous or immoral.”

The Federal Circuit concluded that Section 2(a) is “a viewpoint-discriminatory regulation of speech, created and applied in order to stifle the use of certain disfavored messages. Strict scrutiny therefore governs its First Amendment assessment.”

On April 20, 2016, the USPTO filed a petition for writ of certiorari at the Supreme Court, seeking to challenge the Federal Circuit’s ruling. Meanwhile, in light of possible Supreme Court review of theTam decision, the USPTO has suspended further examination not only of all applications in which a disparagement refusal has been issued, but also those in which an “immoral or scandalous” refusal has been made.

Takeaways

Although the notoriety of the Tam decision has largely been confined to trademark lawyers, the pending ruling by the U.S. Court of Appeals for the Fourth Circuit in the REDSKINS case will undoubtedly grab nationwide headlines. That court is not bound by the decision of the Federal Circuit in Tam, but it would not be surprising to see the Tam case play a major role in the court’s analysis of the Section 2(a) disparagement bar as it applies to the REDSKINS mark.