As its 2016-17 term concluded, the U.S. Supreme Court held unanimously in Matal v. Tam1 that the disparagement clause of the Lanham Act, Section 2(a), is unconstitutional in violation of the First Amendment's Free Speech Clause. The clause at issue—a provision unchanged from the original 1946 enactment of the Lanham Act—prohibits registration of marks which "may disparage . . . persons, living or dead, institutions, beliefs or national symbols, or bring them into contempt or disrepute." 2 The Opinion of the Court, written by Justice Alito – joined in various parts by all of the Justices – reflected the sacred nature of the First Amendment protections at stake when applicants seek to register trademarks deemed offensive. A concurring opinion by Justice Kennedy, joined by Justices Ginsburg, Sotomayor and Kagan, further highlighted the fundamental simplicity of the First Amendment protection that must be accorded trademark registration to prevent the slippery slope of governmental censorship.

The decision was issued in the case involving an Asian rock band seeking to trademark its name the "Slants," which band founder Simon Tam asserts he selected in order "'reclaim' the term and drain its denigrating force as a derogatory term for Asian persons." But the decision's repercussions will be much broader – most directly to the efforts by the Washington Redskins ownership to defend against longstanding efforts by Native American activists to cancel its trademark registrations under the same provision of the Lanham Act.

The Court's opinion began with a primer on trademark law, outlining its history and origins, and purposes. Among the authorities cited were two articles by this Firm's name partner, Beverly Pattishall, a highly recognized trademark expert of his generation.3 The Court also noted the now more than 2 million active marks on the federal register. The Court next quickly dispensed with the argument put forth by Tam (which may have distinguished the case from that of the Redskins' case, as cancellation actions brought by individual Native American persons) that the clause did not apply to Tam's band name because the definition of "persons" included only "natural and juristic" persons, not "non-juristic" entities such as racial and ethnic groups. Although Tam had not raised the argument in the Federal Circuit or on the writ of certiorari, the Court nevertheless expressed the necessity of rejecting this claim.4 The Court concluded that the disparagement clause did prohibit registration of terms that "disparage persons who share a common race or ethnicity."5

The Court then turned to the fundamental issue of whether the clause violates the Free Speech Clause of the First Amendment. The Court first rejected the Government's arguments that the registration of trademarks constitutes government speech, not private speech. The Court pointed out that if "private speech could be passed off as government speech by simply affixing a government seal of approval, government could silence or muffle the expression of disfavored viewpoints."6 The Court concluded that "it is far-fetched to suggest that the content of a registered mark is government speech," noting that if the federal registration makes a mark government speech, "the Federal Government is babbling prodigiously and incoherently."7 Significantly, the Court noted the "most worrisome implication" of the Government's argument concerned the copyright registration system, in that such a ruling could eliminate similar protections for books and writings based on the expressive content.8

In the next section of the Opinion, Justice Alito (joined by an unusual mix of Justices – Roberts, Thomas and Breyer) rejected the Government's assertion that the clause should be upheld because it is "subsidized speech." The Court handily rejected the argument, noting that the situation was readily distinguished from cases involving government cash or equivalent subsidies, because, in contrast, the trademark applicant must pay fees.9 The Court concluded that the clause also could not be protected as analogous to cases in which a unit of government creates a limited public forum for private speech where some content and speaker-based provisions may be allowed, noting that even in such situations "viewpoint discrimination" is forbidden.10

Having concluded that trademark registration is not government speech, Justice Alito’s Opinion next turned to the question of whether trademarks are commercial speech and therefore subject to relaxed scrutiny. Quickly dismissing the competing claims of the Government and Tam as to whether trademarks are all commercial speech or have an expressive component, he found that the disparagement clause failed even the relaxed test of a commercial speech restriction that must serve "a substantial interest" and be "narrowly drawn."11 Justice Alito rejected as "substantial interests, the Government's interest in preventing offensive speech as "that idea strikes at the heart of the First Amendment." Finally, he rejected the asserted interest in protecting the "orderly flow of commerce" as "far too broad."

The concluding remarks by Justice Alito are particularly notable in this era of a super-charged political environment: "The commercial market is well stocked with merchandise that disparages prominent figures and groups, and the line between commercial and non-commercial speech is not always clear, as this case illustrates. If affixing the commercial label permits the suppression of any speech that may lead to political or social 'volatility,' free speech would be endangered."12

The ramifications of the Court's decision are yet to be seen. The first, nearly certain result, will be the upholding of the Washington Redskin's registrations in the face of challenge under Section 2(a).13 Less certain is the greater fallout. Will the ruling open the floodgates for applications seeking registrations of any number of offensive, hateful and otherwise distasteful marks? While recognizing the source and consumer protection functions of trademarks, Justice Kennedy noted in his concurrence that there remain only "a few categories of speech that the government can regulate or punish—for instance, fraud, defamation, or incitement . . . and a few other narrow exceptions."14 It seems that the next wave of litigation in the trademark arena may now revolve around these narrow First Amendment exceptions, rather than traditional trademark principles. Will today's nasty tweet or violent Facebook rant become tomorrow's trademark? While the Tam decision decisively answers one question, it may open the door to many more questions of what trademarks are permissible, assuming no traditional trademark grounds for refusal.

Footnotes

1 Matal, Interim Director, USPTO v. Tam, No. 15-1293 (June 19, 2017) (8-0 decision; Justice Gorsuch took no part in the decision). The full opinion can be found at: https://www.supremeCourt.gov/opinions/16pdf/15-1293_1o13.pdf.

2 15 U.S.C. § 1052(a).

3 Slip Op. at 2-5. Citing, treatises and compendiums including 3 J. McCarthy, Trademarks and Unfair Competition §19:8 (4th ed. 2017); Pattishall, The Constitutional Foundations of American Trademark Law, 78 Trademark Rep. 456, 457–458 (1988); Pattishall, Two Hundred Years of American Trademark Law, 68 Trademark Rep. 121, 121–123 (1978), Id. at 2.

4 All Justices concurred in this portion of the opinion with the exception of Justice Thomas who saw "no reason to address this legal question." J. Thomas concurring, Slip. Op. at 1.

5 Slip. Op., at 11.

6 Id. at 14.

7 Id. at 14-15, citing Pro-Football, Inc. (Washington Redskins) Amicus brief and numerous examples of such phrases.

8 Id. at 18.

9 Id. at 18-20.

10 Id. at 22. But in dicta, the Court noted it left open the question of whether such analysis framework is appropriate for free speech challenges to the provisions of the Lanham Act.

11 Id. at 23-24, citing Central Hudson Gas & Elec. Corp. v. Public Serv. Comm'n of N.Y., 447 U.S. 557 (1980), but leaving open the question of whether Central Hudson provides the appropriate test for deciding free speech challenges to provisions of the Lanham Act.

12 Id. at 26.

13 Pro Football, Inc. v. Blackhorse, Case No. 15-1874 (4th Circ.).

14 J. Kennedy concurring, Slip. Op. at 2, citing United States v. Stevens, 559 U. S. 460, 468 (2010).

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