United States: Supreme Court Strikes Down 70-Year-Old Statutory Provision Barring The Registration Of "Disparaging" Trademarks

For more than 70 years, the Lanham Act has barred the federal registration of disparaging trademarks. In Matal v. Tam, No. 15-1293 (U.S. June 19, 2017), the Supreme Court unanimously struck down that limitation, holding that the disparagement clause was a facially unconstitutional restriction on speech.

The Lanham Act, passed in 1946, governs the federal registration of trademarks. While federal registration is not necessary to use or protect a mark, registration provides certain benefits to the mark holder. For example, a federal registration is prima facie evidence that the mark is valid, and federally registered marks may be recorded with US Customs and Border Protection in order to stop the importation of counterfeits.1

Section 2 of the Lanham Act contains various limitations on the types of marks that are eligible for federal registration. One such limitation, in Section 2(a), bars the registration of a mark that contains "matter which may disparage ... persons, living or dead, institutions, beliefs, or national symbols, or bring them into contempt, or disrepute."2

In Tam, the lead singer of The Slants, a dance-rock band with members of Asian descent, sought to register THE SLANTS as a mark. A trademark examining attorney at the U.S. Patent and Trademark Office (USPTO) denied the request on the basis that the mark may be disparaging to Asian-Americans. The Trademark Trial and Appeal Board affirmed the denial of the application. The plaintiff appealed to the U.S. Court of Appeals for the Federal Circuit, which held, in an en banc opinion, that the disparagement clause was facially unconstitutional under the First Amendment.3

The Supreme Court unanimously affirmed the Federal Circuit's judgment, with Justice Kennedy writing separately, joined by three other Justices. (Justice Gorsuch did not participate in the case.)

All eight Justices joined in the portion of Justice Alito's opinion that rejected the government's argument that trademark registration was a form of government speech. Calling the argument "far-fetched," the Court emphasized that deeming federal registration government speech would effectively have the federal government "babbling prodigiously and incoherently" and it would constitute a "huge and dangerous extension of the government speech doctrine." The Court noted that registration by the USPTO is mandatory for marks that meet all of the statutory requirements and are viewpoint neutral, and that the USPTO itself "has made clear that registration does not constitute approval of a mark."

The remainder of Justice Alito's opinion was joined by Chief Justice Roberts and Justices Thomas and Breyer. The four Justices rejected the government's argument that trademark registration was akin to government subsidy of private speech, noting among other things that trademark applicants pay the government for registrations. These four Justices rejected the government's proposal to establish a new "government-program" doctrine that would permit the disparagement restriction. In doing so, Justice Alito noted that even in situations where the government itself subsidizes private speech, viewpoint discrimination is forbidden, and that "den[ying] registration to any mark that is offensive to a substantial percentage of the members of any group ... is viewpoint discrimination: Giving offense is a viewpoint." Justice Alito's opinion did not decide whether trademarks are commercial speech, because he concluded that Section 2(a)'s disparagement clause failed even the standard of review applied to commercial speech under Central Hudson Gas & Elec. Corp. v. Public Serv. Comm'n of N.Y., 447 U.S. 557 (1980).

Justice Kennedy, joined by Justices Ginsberg, Sotomayor, and Kagan, reached the same result, under a similar First Amendment analysis. These four Justices embraced Justice Alito's opinion, explaining:

As the Court is correct to hold, [Section 2(a)] constitutes viewpoint discrimination—a form of speech suppression so potent that it must be subject to rigorous constitutional scrutiny. The Government's action and the statute on which it is based cannot survive this scrutiny.

Justice Kennedy noted that the case did not fall into the "narrow" category of cases where viewpoint discrimination is permitted, i.e., cases involving government speech. Because the restriction of disparaging marks "bears no plausible relation" to the goal of facilitating source identification through the federal registration of marks, the disparagement clause could not survive the "rigorous constitutional scrutiny" applied in cases of viewpoint discrimination.

Although the Tam decision was limited to the disparagement clause, it all but certainly invalidates a similar restriction in Section 2(a) — the bar on registering marks that contain "immoral ... or scandalous matter." Courts and the USPTO have historically interpreted this provision as barring the registration of marks that are obscene or vulgar.4 The four-Justice plurality led by Justice Alito rejected every basis that the government asserted for defending that clause. Although it is not clear whether the remaining Justices would view the scandalous/immoral clause as viewpoint discrimination, it seems extremely unlikely that five Justices would uphold this clause after striking the disparagement clause.

This issue could be resolved soon, as it is presently before the Federal Circuit in In re Brunetti, No. 2015-1109 (Fed. Cir. filed Sept. 22, 2014), a case involving the USPTO's refusal to register the mark FUCT for certain apparel on the ground the mark is "immoral" or "scandalous" under Section 2(a) of the Lanham Act. Following the Federal Circuit's en banc decision in Tam, the government took the position that the result should apply equally to the bar on the registration of "scandalous" and "immoral" marks, stating in a letter brief that:

Although a court could draw constitutionally significant distinctions between these two parts of Section 2(a), we do not believe, given the breadth of the [Federal Circuit's] Tam decision and in view of the totality of the [c]court's reasoning there, that there is any longer a reasonable basis ... for treating them differently.

If the government maintains its position in light of the Supreme Court's decision in Tam, it is likely the Federal Circuit will similarly hold that the bar on registering "scandalous" and "immoral" marks is unconstitutional.

Footnotes

1 See 15 U.S.C. §1057(b), 1124.

2 15 U.S.C. §1052(a).

3 In re Tam, 808 F.3d 1321 (Fed. Cir. 2015).

4 In re Tam, 808 F.3d 1321 (Fed. Cir. 2015).

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