The U.S. Supreme Court recently considered the rule regarding the registration of offensive trademarks in a case brought by an Asian-American band dubbed "The Slants" that sought to register the name for trademark protection.

The band sued when registration of their name was denied based on Section 2(a) of the Lanham Act, which provides that no trademark shall be refused registration on account of its nature unless it "[c]onsists of … matter which may disparage … persons, living or dead, institutions, beliefs, or national symbols, or bring them into contempt, or disrepute."

The en banc Federal Circuit Court of Appeals struck down the rule on constitutional grounds. "It is a bedrock principle underlying the First Amendment that the government may not penalize private speech merely because it disapproves of the message it conveys," the court wrote. "That principle governs even when the government's message-discriminatory penalty is less than a prohibition."

The USPTO appealed and the nation's highest court granted the agency's writ of certiorari. At oral argument, the justices appeared to agree with the band by expressing skepticism that the government has the authority to penalize speech with which it disagrees.

"I always thought that government programs were subject to one extremely important constraint, which is that they can't make distinctions based on viewpoint," Justice Elena Kagan said.

Deputy solicitor general Malcolm Stewart noted that other laws are in place to prohibit libel or disparagement and argued that trademarks are traditionally source identifiers that "have not historically served as vehicles for expression."

But Justice Ruth Bader Ginsburg countered that the USPTO rejected the band's registration because the agency determined it was offensive. "Does it not count at all that everyone knows that The Slants is using this term not at all to disparage, but simply to describe?" she asked. "It takes the sting out of the word."

Disparaging is a matter of perspective, Chief Justice John Roberts pointed out after Stewart acknowledged that Justice Ginsberg's hypothetical term "Slants Are Superior" would likely be approved by the USPTO. "Why isn't that disparaging of everyone else? Slants Are Superior, well, superior to whom?"

The justices also recognized that nothing prevented the band from calling itself "The Slants," but that didn't mean the government had to protect it. "No one is stopping your client from calling itself The Slants," Justice Sonia Sotomayor told the band's attorney, John Connell. "You are asking the government to endorse your name to the extent of protecting it in a way that it chooses not to."

Connell responded that the lack of registration places a burden upon the band, because it "is denied the benefits of legal protections that are necessary for [them] to compete in the marketplace with another band. And the only reason for the denial of those benefits is the burden on noncommercial speech contained in the mark."

To read the transcript of the oral argument in Lee v. Tam, click here.

Why it matters: A ruling from the Court is expected later this term and could have significant implications for trademark law. If the justices reverse the Federal Circuit's opinion, the status quo would be restored, with the practical effect that The Slants could not register its mark and the Washington Redskins could lose its registration (that litigation is currently pending in the Fourth Circuit). However, if the Court affirms on free speech grounds, it could open the door to a variety of new trademark applications.