The June 18, 2014, decision of the U.S. Patent and Trademark Office’s Trademark Trial and Appeal Board (TTAB) cancelling six federal trademark registrations for trademarks used by the Washington Redskins professional football team has received substantial media coverage and generated great interest among the public.

The impact of the decision has been widely misstated in early news reports. Harry Reid, the Senate Majority Leader, stated on the Senate floor: “The Redskins no longer have trademarks. They are gone.” According to the Majority Speaker’s statement, anyone who wants to sell T-shirts with the name Redskins can now do so.” Highly regarded publications have advised their readers: “The ruling, if it stands up to an appeal to the U.S. Court of Appeals for the Federal Circuit, would mean that the NFL no longer has the exclusive right to sell merchandise and apparel branded with those specific uses of the nickname.”

The truth is far different. Though undoubtedly a matter of significance in the trademark area, the legal impact of the TTAB’s decision is likely to be far less influential than these news reports suggest. Most importantly, the decision, even if ultimately upheld, does not mean that the team has lost all rights in the marks or that the marks are not enforceable under state or federal law. To put the case into perspective, let’s look at what happened, what the decision means to the NFL, and what it means for the rest of us.

What happened

The case, Blackhorse v. Pro Football, Inc., resulted from a proceeding to cancel six trademark registrations used by the Washington Redskins football team. All of the registered marks included the term “Redskins.” The proceeding was filed by five Native Americans who argued that the registrations had been improperly granted because they violated the statutory requirement that trademarks cannot be registered if they consist of or comprise “matter which may disparage … persons, living or dead … or bring them into contempt, or disrepute.”1 The TTAB found that the Native Americans had established, by a preponderance of the evidence, that the term “Redskins,” when used in association with professional football services, was disparaging of Native Americans at the times the various registrations were issued. Based upon this finding, the TTAB held that the statutory prohibition against registering disparaging marks required cancellation of the registrations.

What the decision means to the NFL

First, the cancellations will not become effective until judicial review (appeal) of the case is completed, and only if the decision is upheld. If upheld, the decision will result in a loss in rights to the Washington Redskins football team. For any mark used as extensively as those involved in the decision, however, the impact of that loss of rights will be minimal. The benefits lost from cancellation of the registrations will include:

  1. Loss of the legal presumption of ownership and constructive notice of the trademark owner’s use of the mark in all geographic areas of the U.S, including geographic areas in which the mark has not yet been used. The team’s ownership of the Redskins mark and establishment of nationwide rights can be easily proven without any legal presumptions. In case anyone should question the value of a federal mark registration, it is important to keep in mind that for mark owners who have used their marks only in a limited geographic scope, the loss of the benefit (via federal mark registration) of nationwide constructive use would be very meaningful, as it might open up the opportunity for others to use the same or similar marks in parts of the country where the prior user had not yet established rights.2  The Redskins mark rights have been established through longstanding actual nationwide use.
  2. Loss of the ability to sue for infringement of a federally registered mark. Once again, the impact from this loss will be negligible. Trademark rights are established through use and promotion of a mark, not merely registration. The trademark owner here can bring essentially the same lawsuit under its state common law rights. In addition, though the issue is not free from doubt,3  the “Redskins” marks might be protectable under the federal unfair competition statute. Any statement suggesting others will be free to sell “Redskins” merchandise is highly misleading.
  3. Loss of civil and criminal statutory remedies applicable to counterfeit goods, as counterfeits for such purposes are, by definition, limited to counterfeits of federally registered marks.4These remedies include the valuable ability to secure ex parte seizure orders allowing mark owners to use court orders to seize infringing merchandise outside of football games without having identified the counterfeiters in advance.
  4. Loss of the ability to record the registrations with the U.S. Customs and Border Patrol Service to block the importation of infringing or counterfeit goods. This is more significant, but it does not mean that others can import and sell infringing goods with immunity. Lawsuits can still be brought to prevent sales of any infringing or counterfeit goods after goods are imported into the U.S..
  5. Loss of other contractual or administrative advantages — including the ability to record registered trademark rights with the Trademark Clearinghouse and take advantage of early registration of new generic top level domain names containing “Redskins” (e.g., “redskins.football” or “redskins.sports”).

It also is important to consider what cancellation of the registrations would not mean, namely:

  1. Even if upheld, the decision does not mean all trademark rights in the “Redskins” marks are lost, and does not mean others can sell “Redskins” merchandise with immunity.
  2. It does not mean that the Washington Redskins football team will be precluded from using the Redskins trademarks.
  3. It does not mean that the football team will no longer have exclusive rights to sell merchandise and apparel branded with those the trademarks in question.

Accordingly, the primary impact of the decision to the Washington Redskins football is likely to be political — the decision is likely to fuel widespread public criticism of the team for using a nickname that many believe to be a racial slur.

What the decision means for the rest of us

The decision is unlikely to have a major legal impact on most trademark owners. The most likely impact is public opinion pressure to avoid marks that might be offensive to some. The most obvious marks to be affected are those using Indian names or images: There currently are hundreds of companies using trademarks with Indian-related names or images.5 Though most have been non-controversial, others have been subject to criticism in the past. In the professional sports context, the Chief Wahoo logo mark used by the Cleveland Indians baseball team, a cartoon caricature of a Native American, has been described as a racial stereotype and derogatory by some. Will this decision result in increased criticism of the Chief Wahoo mark? What about other Indian marks that are less controversial, such as the name and logo of the Chicago Blackhawks?

Under the legal standard applied by the TTAB, a “disparaging” trademark can be disqualified for federal registration even if a majority of people do not find the mark disparaging. The disparagement test is measured only against the referenced group, and only requires a “substantial composite” of the referenced group to be offended. Using this test, it is possible, in theory at least, for marks never considered “disparaging” to suffer the same fate of cancellation. What, for example, would be the result if a “substantial composite” of Irish Americans are offended by the famous Notre Dame “Fighting Irish” logo and perceive it as depicting an ethnic stereotype that is demeaning or derogatory?

This scenario is unlikely to play out for several reasons, such as:

  1. As the TTAB noted, trademark cancellations are granted only with “due caution” and “after a most careful study of all of the facts.”
  2. For purposes of cancellation, it is insufficient for a mark to develop a disparaging perception over time. The test for cancellation is whether the mark was disparaging at the time of registration. Indeed, the one dissenting judge at the TTAB specifically noted that the “case is not about the controversy, currently playing out in the media, over whether the term ‘redskins’ as the name of Washington’s professional football team, is disparaging to Native Americans today.”
  3. A review of the evidence presented to the TTAB reveals the magnitude of the efforts of the Native Americans in cancelling the “Redskin” marks. Cancelling trademarks because they are disparaging takes a very substantial and dedicated effort, and few people will have the appetite for such an undertaking.

Déjà vu

This is the second time the TTAB has canceled the “Redskins” marks. In 1999, after seven years of litigation, the TTAB previously found the “Redskins” mark disparaging and ordered cancellation. That decision was overturned on appeal, though on grounds other than the merits.

What’s next?

The Washington Redskins football team already has announced their intention to appeal this decision. The appeal can take one of two different courses. It can be appealed to the U.S. Court of Appeals for the Federal Circuit in the Washington, D.C.; or the team can file a civil action in the United States District Court for the Eastern District of Virginia, which has jurisdiction over all civil actions seeking review of TTAB cancellation proceedings. The final chapter of the Redskins trademark registration story will not be written until the appeals process is completed, which will likely be one or more years in the future.