The U.S. Supreme Court has invalidated the statutory bar against the federal registration of disparaging trademarks, on the ground that it violates the First Amendment and is unconstitutional. What does this mean for businesses in general, including, in particular, broadcasters and the Washington DC National Football League franchise?
History of the Case
The case involved an application by Simon Tam to register the mark THE SLANTS for an Asian-American band. Mr. Tam selected the name in order to make a statement about racial and cultural issues. The federal Lanham (Trademark) Act states that a trademark shall not be denied registration unless, among other reasons, it:
Consists of or comprises immoral, deceptive, or scandalous matter; or matter which may disparage or falsely suggest a connection with persons, living or dead, institutions, beliefs, or national symbols, or bring them into contempt, or disrepute.
Accordingly, the Patent and Trademark Office (PTO) denied the application on the basis that, regardless of Mr. Tam’s intent, the phrase “THE SLANTS” may be disparaging to a substantial percentage of persons of Asian descent. The PTO also stated that it was bound by a 1981 precedent issued by the United States Court of Appeals for the Federal Circuit, holding that the statute was constitutional.
As discussed in a previous post, in a 9-3 ruling, on appeal, the United States Court of Appeals for the Federal Circuit reversed its own precedent and concluded that the statutory prohibition against the registration of disparaging marks violates the First Amendment and is unconstitutional.
Supreme Court Review
The Director of the PTO sought to appeal the Federal Circuit’s ruling to the Supreme Court. Surprisingly, Mr. Tam, who was the prevailing party, agreed that the Supreme Court should hear the appeal, in order that the issue should be finally decided without waiting for another case to reach the Court. The Supreme Court agreed to hear the case.
On June 19, 2017, the Supreme Court held that the prohibition against registration of disparaging mark is unconstitutional under the Free Speech Clause of the First Amendment. The decision was unanimous, although four of the eight justices did not agree with some of the reasons stated in the opinion.
First, the Court addressed several arguments by the PTO that would eliminate or highly limit any First Amendment protection.
For example, the PTO asserted that federal registration of a mark suggests that the viewpoint expressed by the mark was approved by the Government. It argued that approval of a mark was therefore government speech, which is not covered by the First Amendment. The Court rejected this argument on the basis that registration of a mark does not constitute government approval of the mark.
The opinion addressed several other arguments by the PTO in support of its position, but only four members of the Court agreed with the analysis of the following two issues.
The Court recognized that the case involved two “notoriously tricky” (and potentially conflicting) issues of constitutional law.”
- On the one hand, as argued by Mr. Tam, the government may not deny a benefit to a person on a basis that infringes his constitutional freedom of speech.
- On the other hand, as argued by the PTO, the government is not required to subsidize activities that it does not want to promote by granting cash subsidies or their equivalent, such as tax benefits.
Even though registration of a trademark provides valuable non-monetary benefits, resulting from the expenditure of government funds, the Court concluded that the same could said of any government service. It noted trademark applicants pay filing fees, which it said also distinguished the case from the ones cited by the PTO. In the end, the Court concluded that the benefits of trademark registration were not the type of subsidy that would allow the government to refusal to allow the registration of disparaging marks.
In addition, the PTO argued that trademarks are commercial speech and therefore are only entitled to a lower level of constitutional protection. Mr. Tam made the counter-argument that many trademarks have an expressive component and constitute speech that should not be regulated by the government.
The Court cited to a 1929 dissent by Justice Oliver Wendell Holmes where he stated:
Speech that demeans on the basis of race, ethnicity, gender, religion, age, disability, or any other similar ground is hateful; but the proudest boast of [the right to] free speech is that we protect the freedom to express “the thought that we hate.”
Ultimately, the Court held that, regardless of how a trademark is characterized, the statute would be deemed unconstitutional in that the statute was overly broad. In particular, the Court stated that the law improperly prohibits the registration of some marks that are protected under the First Amendment and is not properly limited to serving what might be an appropriate purpose, such as refusing to register marks that “support invidious discrimination.” As an example of the law’s overbreadth, the Court stated that the statutory bar to registering disparaging marks:
[a]pplies to trademarks like the following: “Down with racists,” “Down with sexists,” “Down with homophobes.” It is not an anti-discrimination clause; it is a happy-talk clause. In this way, it goes much farther than is necessary to serve the interest asserted.
Oddly, the decision never addressed what could (and perhaps should) have been the key issue in the case: Does registration of a trademark constitute speech in the first instance, particularly as a mark can be used regardless whether it is registered?
Nevertheless, the statutory provision in question was found to violate the Free Speech Clause of the First Amendment because it seeks to prohibit registration of marks (which the Court viewed as the banning of speech) on the basis that the marks express ideas that offend, and none of the arguments why the statute was nevertheless enforceable prevailed.
Impact of Decision
Whether or not disparaging trademarks are barred from registration, registration of a trademark does not affect anyone’s right to use the mark. Registration of a mark does, however, provide the owner with some additional protection under federal law, such as granting a nationwide exclusive right to use the mark and the ability to ask Customs to block infringing goods from entering the company. That said, the decision will have minimal impact on how trademarks are used.
The Court left open the possibility that a narrower statutory prohibition might be found to be constitutional, such as a bar against the registration of marks that invite violence against a particular group. Whether such a law would be passed by Congress and signed by the president in the foreseeable future is problematic.
One group in particular that may be affected by this decision are radio broadcasters. Radio “shock jocks” have increasingly created programming, character names and ongoing listener participation segments with titles that may be considered offensive. Some of these marks have been refused registration in the past, such as “Who’s Dick Hertz?,” “Bitchie Bitch and Dickie Dick” and “Pussy Lounge.” The same holds true for programming featuring extremist views, such as “Big Gay Hate Machine.” The creators of such programming, which is syndicated or seeks to be syndicated, would benefit from having federal registrations for these marks, in order to preclude someone from adopting them in a geographic market where they have no presence (and therefore no trademark rights). The door for registration of such marks has been opened much wider.
Overall, will there be an onslaught of registrations for disparaging marks issued by the PTO? There will almost certainly be more applications filed for such marks, but many are likely to meet with other impediments. Before a registration can issue, the applicant will have to prove use of the mark for the goods or services to be covered by the registration. Moreover, applicants who seek registration of disparaging phrases for t-shirts or caps may meet with a rejection on the ground that the phrase does not function as a trademark, i.e., it does not designate the source of the goods to the public, but rather is merely ornamental.
Notably, the decision does not address the constitutionality of the accompanying language of the Act, which prohibits the registration of marks that consist of or include “immoral, deceptive, or scandalous matter.”
- A refusal to register a mark on the ground that it is immoral or that it is scandalous is arguably subject to all of the same objections as a refusal to register a mark that is disparaging. Thus, it would not be surprising if the PTO announces that it will no longer refuse registration of a mark on one or both of these grounds.
- On the other hand, obscene marks have historically been refused registration under the provisions barring the registration of immoral and scandalous marks because there is no specific statutory bar to the registration of obscene marks. The regulation of or restrictions on obscenity has been held permissible under the First Amendment in many situations, including the ability of broadcasters to air obscene material. Thus, ironically, the impact of this ruling could be that obscene trademarks may be registered, even though their use may be proscribed in certain situations. For example, if the PTO has no right to refuse registration of an obscene mark, can it be argued that a broadcaster must carry an advertisement containing that mark? Ultimately, an amendment to the Trademark Act may be necessary to provide a basis for refusing the registration of obscene marks.
- In contrast, there are many laws regulating or making illegal deceptive activities, including other provisions of the Trademark Act. Moreover, deceptive marks do not express an idea and there is presumably no constitutional right to deceive people.
Perhaps the only result that will clearly flow from this decision is it will bring to an end the effort of Native-Americans to cancel some of the Washington Redskins’ registered trademarks, based on the same statutory provision. (Amazingly, this litigation began in September 1992, almost twenty-five years ago.)
Finally, at a time when many people increasingly feel free to disparage others, the Supreme Court has extended that First Amendment protection to the registration of arguably offensive trademarks. Regardless of the offensiveness of some marks that may now be registered, looked at from this perspective, perhaps the decision is not groundbreaking.