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Supreme Court Strikes Down Trademark Registration Ban on Free Speech Grounds

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Jennifer Elgin and Ariel Stevenson
July 2017

In a significant victory for free speech advocates – and fans of the Washington REDSKINS – the U.S. Supreme Court has ruled that section 2(a) of the Lanham Act’s prohibition on the registration of “disparaging” trademarks violates the Free Speech Clause of the First Amendment. The Court held in Matal v. Tam that the statute “offends a bedrock First Amendment principle: Speech may not be banned on the ground that it expresses ideas that offend.”

The decision pared back the “government-speech doctrine,” which exempts certain speech from First Amendment protection.  The case will affect the long-watched and debated case concerning registration of the REDSKINS trademark for Washington D.C.’s football team as well as pending cases challenging the “immoral” and “scandalous” clauses of section 2(a).

Background

In 2013, the Trademark Office refused registration of the mark  THE SLANTS for an Oregon rock band under Section  2(a) of the Lanham Act, which prohibits the registration of marks that may “disparage . . . or bring . . . into contemp[t] or disrepute” any “persons, living or dead.”[1] In the government’s view, THE SLANTS is a derogatory or offensive term for people of Asian descent. Tam, however, claimed that the band chose the name in order to reclaim the term and begin changing the negative connotation associated with it. On appeal, the Court of Appeals for the Federal Circuit initially upheld the PTO’s decision; on rehearing en banc, however, the Court of Appeals determined that the disparagement clause violated the First Amendment. The government appealed, and the Supreme Court granted certiorari to decide whether the disparagement clause “is facially invalid under the Free Speech Clause of the First Amendment.”

The Decision

In a rare show of unanimity, however, the Justices agreed with the Federal Circuit’s en banc review, finding the disparagement clause violates the First Amendment’s Free Speech Clause.[2]  The Court rejected Tam’s argument that the clause applied only to individuals and not to juristic persons. The government’s primary argument in support of section 2(a)’s disparagement claim was that registered trademarks are “government-speech,” not private speech of the trademark owner which is protected under the First Amendment. Justice Alito delivered the Opinion of the Court, concluding that trademarks are private speech, not government speech. The Court reasoned that the federal government does not create or change the marks submitted to the PTO for registration, it has limited power to remove marks from the Federal Register, and the PTO has stated that registration does not constitute approval of a mark.  The Court distinguished prior government speech cases, including most notably, Walker v. Texas Division, Sons of Confederate Veterans, where the Court in a 5-4 decision held that the Texas Department of Motor Vehicles did not violate the First Amendment in refusing to issue a license plate with the confederate battle flag because license plates are government speech. The Walker Court relied on the fact that license plate designs are perceived by the public as coming from the state, and are essentially government IDs. The Tam Court summarily distinguished Walker and other government speech cases, finding that factors in those cases simply were not present in the case of the federal trademark registration system. The Court seemed particularly troubled by the implication that finding that the federal registration system was government speech would affect the federal copyright registration system, allowing the government to regulate what works it would register based on viewpoint discrimination.

Justice Alito also delivered an opinion joined by Chief Justice Roberts and Justices Thomas and Breyer, rejecting the government’s argument that the registration of trademarks is constitutional as a government subsidy, finding that those cases involve cash subsidies.  The Justices also rejected the government’s claim that the clause was constitutional as a “government program” wherein the government can discriminate between viewpoints. Finally, the Justices found that Section 2(a) would not withstand review even under a more relaxed First Amendment scrutiny afforded to commercial speech under the “intermediate” balancing standard of Central Hudson Gas & Electric Corp. v. Public Service Commission of New York.

Justice Kennedy delivered a separate opinion, joined by Justices Ginsburg, Sotomayor and Kagan, agreeing and further explaining that the disparagement clause embodies impermissible viewpoint discrimination, rejecting the government’s argument that, because section 2(a) applies to all offensive marks, it does not represent viewpoint discrimination. Justice Kennedy wrote that “the Government’s disapproval of a subset of messages it finds offensive . . . is the essence of viewpoint discrimination” and “the government may not punish or suppress speech based on disapproval of the ideas or perspectives the speech conveys.”  Kennedy distinguished “those few categories of speech that the government can regulate or punish—for instance, fraud, defamation, or incitement.”  Unlike the Justices joining in the Alito opinion, who did not decide on the applicable level of scrutiny for trademark regulations, these Justices clearly advocated the “heightened” constitutional scrutiny applicable when the government is regulating speech because of disagreement with the message it conveys, as decided by the Court in Sorrell v. IMS Health Inc.

Impact of the Decision

The Court’s decision likely resolves the long-watched REDSKINS appeal, which has been suspended at the Fourth Circuit Court of Appeals pending the Tam decision.  The Tam decision signals that the Court’s “government speech” cases have limits. And, it confirmed that trademarks are a form of constitutionally protected speech, unlike fraudulent or inciteful speech. It appears that the Justices could not agree, however, on what level of constitutional scrutiny should be afforded to content-based trademark laws and regulations, with certain Justices plainly advocating for heightened scrutiny even for “commercial” speech.

It is highly likely that the other clauses in section 2(a) prohibiting registration of “scandalous” and “immoral” marks, also will fail constitutional scrutiny. The Federal Circuit suspended proceedings in In re Brunetti, No. 2015-1109, appealing the TTAB’s refusal of the applicant’s trademark application for FUCT as scandalous and immoral. The USPTO conceded in a January 2016 letter brief that the Federal Circuit’s reasoning in Tam also requires invalidation of the Lanham Act’s prohibition on the registration of scandalous and immoral marks.  Following the Supreme Court decision in Tam, the Federal Circuit ordered parties in Brunetti to file letter briefs explaining how the above appeal should be resolved, and in particular, “the Supreme Court’s statements that ‘offensive’ speech cannot be denied trademark protection and its application to this case.”

[1] Even without federal registration, a valid trademark may still be used in commerce and enforced against infringers. Federal registration, however, “confers important legal rights and benefits on trademark owners who register their marks.” B&B Hardware.

[2] Justice Gorsuch did not participate in the decision, having joined the Court after oral argument in the case.

Ms. Elgin co-authored amicus curiae briefs in support of Simon Tam in In re Tam, No. 14-1203 (Fed. Cir.), and in support of Pro-Football, Inc. in Pro-Football, Inc. v. Amanda Blackhorse, No. 15-1874 (4th Cir.).