The Supreme Court’s recent decision in Matal v. Tam, 582 U.S. ___ (2017) changes the trademark landscape by striking down the Lanham Act’s “disparagement clause” and rejecting the notion that trademarks are themselves “government speech.”

The Slants and Re-Appropriation of Derogatory Terms

The case stems from a trademark application filed by Simon Tam, the lead singer of the rock band “The Slants.” Although “slants” is often viewed as a derogatory term for persons of Asian descent, and despite suffering years of bullying growing up, Tam and his fellow band members (all of whom are Asian-American) sought to “reclaim” the term and turn the previously-negative stereotype into a point of pride.

Trademark registration is not required for a person or entity to use a word or phrase in commerce, but the protections afforded by the registration are often crucial in helping avoid or prevent consumer confusion regarding source or affiliation. See Matal, 582 U.S. at ___ (quoting Park ‘N Fly, Inc. v. Dollar Park & Fly, Inc., 469 U.S. 189, 198 (1985)) (“The Lanham Act provides national protection of trademarks in order to secure to the owner of the mark the goodwill of his business and to protect the ability of consumers to distinguish among competing producers.”).

Here, The Slants ran into that exact problem when other bands started to use the same name. So, in 2010, Tam and the band sought to trademark the name but their application was rejected. The U.S. Patent and Trademark Office (“PTO”) denied the application on the basis that the registration would violate the Lanham Act’s “disparagement clause”—specifically, a concern that the trademark may “disparage . . . or bring . . . into contemp[t] or disrepute” any “persons, living or dead.” See 15 U.S.C. § 1052(a).

Tam appealed at the PTO, but was denied. He then took his case to federal court, where the en banc Court of Appeals for the Federal Circuit held the disparagement clause to be unconstitutional as an impermissible violation of the First Amendment. See In re Tam, 808 F.3d 1321 (Fed. Cir. 2015) (en banc). The Supreme Court affirmed.

Supreme Court Decision

The Supreme Court began by rejecting Tam’s argument that the disparagement clause did not even actually apply to his application because it allegedly only concerned “persons” (that is, individuals and juristic entities) and not racial or ethnic groups. With the scope of the clause decided, the Court then addressed the Government’s claims that (a) trademarks are government speech, and not private speech; (b) trademarks are a government subsidy; and (c) the disparagement clause should be evaluated under a new “government-program” doctrine.

The distinction between “government” speech and “private” speech was the crux of the Government’s case because Supreme Court precedent clearly established that “[t]he Free Speech Clause . . . does not regulate government speech.” Matal, 582 U.S. at ___ (quoting Pleasant Grove City v. Summum, 555 U.S. 460, 467 (2009)). With that broad exception, the Court noted how the doctrine “is susceptible to danger misuse” and for that reason “must exercise great caution before extending” the scope of government speech.

To that end, the Court reasoned trademarks are not “government speech”—despite being registered by the PTO, an arm of the Federal Government—because the government “does not dream up” the content of the marks, “does not edit” the marks, and (normally) will not reject a registration based on the viewpoint it expresses. Additionally, registration “does not constitute approval” of a mark and “it is unlikely that more than a tiny fraction of the public” knows what trademark registration even means. For these reasons, the Court determined, “it is far-fetched to suggest that the content of a registered mark is government speech.”1

The remainder of the opinion resulted in limited precedent as the Court was split 4-4 in approving differing rationales for the ultimate outcome.2 Justices Alito, Roberts, Thomas, and Breyer rejected the Government’s “subsidy” argument, namely because the PTO is not providing cash or its equivalent to trademark applicants—“quite the contrary[,] an applicant for registration must pay the PTO[.]” These Justices also declined the Government’s invitation to apply a newly suggested “government-program” doctrine to save the disparagement clause, by simply merging the “government speech” line of cases with the “government subsidy” line of cases, because the rights conferred by a trademark registration were not valuable enough to warrant protection.

In any event, Justices Alito, Roberts, Thomas, and Breyer determined viewpoint discrimination has always been forbidden when the government creates a limited public forum for private speech (which trademarks were determined to be, earlier in the opinion). The Justices reminded how “[the Supreme Court has] said time and again that ‘the public expression of ideas may not be prohibited merely because the ideas are themselves offensive to some of their hearers.’” Matal, 582 U.S. at ___ (quoting Street v. New York, 394 U.S. 576, 592 (1969)). Justices Kennedy, Ginsburg, Sotomayor, and Kagan expanded on the application of viewpoint discrimination to trademarks and agreed that the First Amendment’s prohibition of such discrimination was fatal to the disparagement clause.

Finally, Justices Alito, Roberts, Thomas, and Breyer declined to determine whether trademarks are “commercial speech”—thus making the disparagement clause subject to the relaxed scrutiny of Central Hudson—because the disparagement clause could not withstand even that lower standard of review. The clause, these Justices determined, serves no “substantial interest” and is not “narrowly drawn.” Most specifically, the argument that the Government has an interest in preventing offensive speech is completely unavailing because “the broadest boast of our free speech jurisprudence is that we protect the freedom to express ‘the thought that we hate.’” Matal, 582 U.S. at ___ (quoting United States v. Schwimmer, 279 U.S. 644, 655 (1929) (Holmes, J., dissenting)).3

Impact

This decision will likely have wide-reaching impact as individuals (i) attempt to follow in The Slants’ footsteps of reclaiming once-derogatory terms, or, conversely, (ii) attempt to capitalize on the ability to sequester certain offensive words and phrases for commercial gain through trademark registration. The effects of the disparagement clause’s demise cannot accurately be forecasted to affect any one industry and, instead, will most likely impact all commercial streams.

A notable circumstance the decision is sure to impact is the current fight between the Washington, DC NFL team (the “Washington Redskins”) and the PTO, over the “Redskins” moniker. See Pro-Football, Inc. v. Blackhorse et al., Case No. 15-1874 (4th Cir. 2015). Six of the team’s trademarks had been cancelled by the PTO after several Native Americans petitioned that they disparaged Native Americans and had been registered in violation of the Lanham Act’s disparagement clause. Given the Matal v. Tam decision and its attendant striking down of the disparagement clause, however, it is likely the Court of Appeals for the Fourth Circuit will side with the team and reinstate the trademark registrations.

In coming to that conclusion, one must question the import of how Simon Tam chose “The Slants” in an effort to “reclaim” the term whereas the NFL team can make no such claim to its selection of “Redskins.” Given the protections afforded by the First Amendment—and the prohibition on viewpoint discrimination—such a calculus is also likely obsolete.

A copy of the Court’s slip opinion can be found here.