On June 19, 2017, the Supreme Court struck down the prohibition on the registration of offensive trademarks. Matal v. Tam, No. 15-1293, 582 U.S. ___ (2017). The Court unanimously held that the Lanham Act’s provision preventing the registration of disparaging marks violated the Free Speech Clause of the First Amendment.

In November 2011, Simon Tam—the lead singer of the Asian-American rock group “The Slants”—filed an application with the United States Patent and Trademark Office (“PTO”) to register the mark “The Slants” for goods and services related to live musical entertainment. The term “slants” is sometimes used as a derogatory term for people of Asian descent. The PTO therefore denied Tam’s application because Section 1052 of the Lanham Act mandates refusal of “matter which may disparage or falsely suggest a connection with persons, living or dead, . . . or bring them into contempt, or disrepute.” 35 U.S.C. § 1052(a). The PTO denied Tam’s appeal, but the Federal Circuit, sitting en banc, ruled that the disparagement clause of the Lanham Act was “facially unconstitutional.” Tam, slip op. at 7.

The Supreme Court affirmed, rejecting each of the Government’s arguments that would either eliminate any First Amendment protection or lower the standard of review. First, Justice Alito, writing for the majority, concluded that trademarks are private speech, not government speech. Id. at 18. The Court cautioned that government speech, which is not subject to the First Amendment, is a doctrine that is “susceptible to dangerous misuse.” Id. at 13-14. Justice Alito further reasoned that the government does not “dream up these marks, and it does not edit marks submitted for registration.” Id. at 14. Rather, the trademark registration process is entirely viewpoint-neutral—excluding the disparagement clause—and it is “far-fetched” to suggest the government is “babbling prodigiously and incoherently” through contradictory and often nonsensical trademarks. Id. at 14-15.

Second, the Court rejected the argument that trademark registration is a form of government subsidy, reasoning that the PTO does not pay money to trademark registrants and, in fact, fees are paid by the applicants to the PTO to support the registration system. Id. With respect to any non-monetary benefits provided by trademark registration, the Court noted that “just about every government service requires the expenditure of government funds” and the incidental benefits of those funds does not change the analysis. Id. at 19-20.

Third, the Court refused the Government’s invitation to sustain the disparagement clause under a new “government-program” doctrine, which the Court deemed merely a merger of the government-speech and government-subsidy doctrines. Id. at 20-23. The Court added that, even if trademarks are commercial speech—which it need not and did not decide—commercial speech could not be restricted based on Section 1052(a) because such a restriction would not both serve “a substantial interest” and be “narrowly drawn.” Id. at 24. The Court emphasized that “the proudest boast of our free speech jurisprudence is that we protect the freedom to express ‘the thought that we hate.’” Id. at 25.

Justice Kennedy (joined by Justices Ginsburg, Sotomayor, and Kagan) wrote separately, concurring in part and concurring in the judgment, to expand on “why the First Amendment’s protections against viewpoint discrimination apply to the trademark [at issue].” Id. at 27. Justice Kennedy noted, in particular, that “mandating positivity . . . might silence dissent and distort the marketplace of ideas,” and that—whether based on the applicant’s personal views or on the expected reaction of the public—the disparagement clause amounted to unconstitutional censorship. Id. at 28-31. Justice Thomas also wrote separately to express his belief “that when the government seeks to restrict truthful speech in order to suppress the ideas it conveys, strict scrutiny is appropriate, whether or not the speech in question may be characterized as ‘commercial.’” Id. at 35.

What This Means for You

The Matal v. Tam decision may help resolve a number of ongoing disputes involving the registration of allegedly disparaging marks. (Of course, public opinion in some cases may be more important than the registribility of a mark for branding.) Additionally, this decision may foreshadow the demise of other prohibitions on registration, including the Lanham Act’s ban on “immoral . . . or scandalous matter.” On June 26, 2017, the PTO released Examination Guide 1-17, which notes that the “scandalousness provision” remains pending before the Federal Circuit in In re Brunetti, No. 15-1109. The PTO has been suspending action on pending applications that are subject to refusal under the scandalousness provision until the Brunetti litigation concludes. However, in a letter brief submitted in the Brunetti appeal on January 21, 2016, the PTO stated that “the reasoning of Tam requires the invalidation of Section 2(a)’s prohibition against registering scandalous and immoral marks as well.” In re Brunetti, No. 15-1109, ECF No. 52 at *2 (Fed. Cir. Jan. 21, 2016).

Attorneys currently handling trademarks under attack based on disparagement, immoral, or scandalous grounds will want to consider including a First Amendment defense in any pending pleadings or dispositive motions.