United States: Of Slants, Skins And Signs: Another Step Closer To The Showdown

Last Updated: January 7 2016
Article by Peter A. Sullivan

In September, we discussed In re Tam and the potential for a showdown over the constitutionality of Section 2(a) of the Lanham Act. At that time, a panel of the Federal Circuit had recently upheld the PTO's refusal to register the mark THE SLANTS for a music group, finding that the name was disparaging to persons of Asian descent.  Judge Moore stated in her "additional views" that it was time to revisit the constitutionality of Section 2(a) and In re McGinley, the case that upheld the constitutionality of the provision.  The en banc Federal Circuit has now had an opportunity to weigh in on the question and, on December 22, 2015, it struck down Section 2(a) as unconstitutional, overruling McGinley.

Nine of the twelve judges agreed that Section 2(a) violated the First Amendment, with Judge Moore writing the opinion for the en banc court.  The court found that Section 2(a) discriminates on the basis of the content of the message, and thus merits strict scrutiny, citing Reed v. Town of Gilbert and Sorrell v. IMS Health.  When the PTO refuses to register a mark under Section 2(a), the court reasoned that it is doing so on the basis of what it considers the expressive message and its effect on a class of individuals.  The court also found that the fact that the provision regulates commercial speech did not save it from scrutiny, and it held as an alternative basis for supporting the judgment that Section 2(a) was unconstitutional under the Central Hudson intermediate scrutiny test for commercial speech.

In holding that Section 2(a) was unconstitutional, the en banc court rejected three arguments that would have avoided applying heightened scrutiny:  (1) trademark registration does not by itself regulate speech; (2) trademark registration is government speech; and (3) trademark registration is a form of government subsidy.

Does Trademark Registration Regulate Speech?

The court first rejected the argument that the act of registration, or its refusal, does not restrict the ability of the music group to use the name THE SLANTS.  It held that the government cannot apply an unconstitutional test to determine whether it would allow a trademark registration, citing the "constitutional conditions" cases, including Perry v. Sindermann.  It found registration to confer a benefit on the holder of the mark.  The denial of that benefit, standing alone, sufficed to cause a chilling effect on First Amendment rights when Section 2(a) is applied.  It also rejected as illusory the possibility that there were common law trademark rights that were available even if federal registration is not available.

Is Trademark Registration Government Speech?

The court next rejected the argument that trademark registration is government speech.  It noted that the trademark itself is undeniably private speech, and even the signaling accoutrements of trademark registration, such as the ® sign, do not rise to the level of government speech.  Regulatory activity, such as allowing the use of the symbols indicating a registered mark, publishing the mark in the PTO Official Gazette, and issuing registration certificates, does not convert the underlying speech to government speech. If that were the case, the © copyright mark similarly would transform expressive material receiving a copyright into government speech and thereby allow the government to make content-based choices about which works can be copyrighted.

Is Trademark Registration A Government Subsidy?

The court then held that trademark registration is not a government subsidy and thus could not be exempt from strict scrutiny under the line of cases discussing government benefits.  It noted that the Lanham Act was enacted under the authority of the Commerce Clause and not the Spending Clause.  The court also again analogized to copyright registration.  If the government were allowed to decide whether to grant a trademark on the basis of the content of the expression, the court reasoned, then it could also condition the grant of a copyright registration on the expressive message of the work, which is anathema to the First Amendment.

**

Some of the judges voiced additional views on the decision.  Judges O'Malley and Wallach in concurrence also would have struck Section 2(a) as being unconstitutionally vague as to the meaning of "disparage."  Judge Dyk, concurring and dissenting, stated that Section 2(a) is not unconstitutional on its face, but its application in this case violated the First Amendment.  Judge Reyna in dissent stated that Section 2(a) satisfies intermediate scrutiny because the provision satisfies the goal of regulating the orderly flow of commerce, and he criticized the majority for not acknowledging this goal in its Central Hudson analysis.  Judge Lourie, also in dissent, questioned how a law that has been applied rather consistently for nearly seventy years can now be unconstitutional?  It is a fair question, and one that cannot be answered without confronting the fact that the jurisprudence has shifted since McGinley, in cases like Reed and Sorrell, opening up provisions like Section 2(a) for First Amendment challenge.

This is another step toward the showdown.  The Fourth Circuit is set to weigh in on Section 2(a) in the Pro-Football, Inc. v. Blackhorse case involving the REDSKINS trademark.  The district court opinion in that case relied on the now-overruled McGinley case.  It will be interesting to see if the Fourth Circuit will adopt the views of the en banc Federal Circuit or go in another direction.  Then the Supreme Court may have an opportunity to weigh in.  In the meantime, will we see more challenges to content based regulations, perhaps in food labeling or the FCC's regulation of broadcast television and radio?  More disruption to follow.

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