Free speech legal battle changes law on disparaging trademarks

published in McAfee & Taft tIPsheet | July 10, 2017

By Sasha Beling

Last month, in Matal v. Tam, the U.S. Supreme Court affirmed the Federal Circuit Court of Appeal’s decision that struck down a portion of Section 2(a) of the Lanham Act.

The Supreme Court ruled that the portion in question, which prohibited the registration of trademarks consisting of disparaging matter, was a violation of the First Amendment’s free speech provision and therefore is unconstitutional.

The Lanham Act, enacted in 1946, is a federal law that covers the use and registration of trademarks in the United States. Section 2(a) of the Lanham Act sets forth certain restrictions that prohibit the registration of a trademark that “consists of or comprises immoral, deceptive, or scandalous matter; or matter which may disparage … persons, living or dead, institutions, beliefs, or national symbols, or bring them into contempt, or disrepute.”

Disparaging trademarks ruled form of free speech

In 2011, Simon Tam, the founder of the Asian-American rock band THE SLANTS, filed a trademark application for the band’s name. The U.S. Patent and Trademark Office (USPTO) denied registration on the basis that the mark was derogatory to those of Asian descent under the disparagement provision of Section 2(a) of the Lanham Act. Tam appealed the USPTO’s decision to the Trademark Trial and Appeals Board (TTAB), which upheld the refusal to register the application. The band argued its use of THE SLANTS was not in a disparaging manner but “to ‘reclaim’ and ‘take ownership’ of Asian stereotypes.” Tam appealed the decision to the Federal Circuit, which initially affirmed the refusal to register. Later in an en banc (full court) decision, the Federal Circuit reversed the refusal to register and found that while THE SLANTS was a disparaging mark, the disparagement provision of Section 2(a) of the Lanham Act is an unconstitutional government regulation of private speech (i.e. a trademark and application therefor is private speech).

On June 19, 2017, the Supreme Court unanimously affirmed the Federal Circuit’s opinion, ruling that the disparagement provision of Section 2(a) “offends a bedrock First Amendment principle: Speech may not be banned on the ground that it expresses ideas that offend.” Accordingly, Tam should receive a federal registration for THE SLANTS trademark.

The Tam decision is good news for the Washington Redskins football team. Recently, several of the NFL’s Washington Redskins’ trademark registrations were ordered to be cancelled by the TTAB on the basis that the registrations violated the disparagement provision of Section 2(a) of the Lanham Act. The Redskins appealed the TTAB’s decision to the U.S. District Court in Alexandria, Virginia, which upheld the cancellation decision of the TTAB. The team then appealed the decision to the Fourth Circuit Court of Appeals.

Late last month in the Redskins case, all parties conceded that the Supreme Court’s Tam decision was controlling law and that the Fourth Circuit should vacate the district court’s order directing the USPTO to cancel the team’s trademark registrations. As a result, the Redskins should be able to keep its trademark registrations and, going forward, offensive or disparaging trademarks cannot be refused registration.

Scandalous and immoral trademarks have their day in court

While the issue of disparaging trademarks has been decided, at this time scandalous and immoral trademarks — for example, those that include profanities, vulgarities, or sexually explicit content — can still be refused registration. The constitutionality of the scandalous/immoral provision of Section 2(a) is currently being challenged. In In Re Brunetti, the USPTO and TTAB refused registration for the trademark “FUCT” for various clothing and apparel items on the grounds that the mark comprises immoral or scandalous matter. The case is pending, and we are awaiting a decision from the Federal Circuit on whether it will adopt the reasoning in Tam and rule that scandalous and immoral trademarks cannot be refused registration on First Amendment Free Speech grounds.

Stay tuned.