SCOTUS Finds Disparagement Clause of the Lanham Act an Unconstitutional Violation of Free Speech

By: Christian Feldman[1]

On June 19th 2017, in an opinion written by Justice Alito, the Supreme Court of the United States unanimously determined that the disparagement clause (the “Clause”) of the Lanham Act was an unconstitutional violation of free speech.[2]  The Clause allowed trademarks to be refused if they could “disparage . . . or bring . . . into contempt” any “persons, living or dead.”[3]  Most are probably familiar with the Clause due to the controversial cases involving the NFL’s Washington Redskins.[4]  The Court’s holding in Matal v. Tam is a noteworthy triumph for both The Slants and the Washington Redskins.

The case involves an Asian-American rock band named “The Slants.”[5] The band’s lead singer, Simon Tam, applied to the U.S. Patent and Trademark Office (“PTO”) seeking to register the mark “THE SLANTS.”[6]  The PTO denied the application, reasoning that the term was derogatory towards persons of Asian descent.[7]  On review, the Court noted that when deciding if a trademark is disparaging, “an examiner at the PTO generally applies a two-part test.”[8]  The examiner must first consider “the likely meaning of the matter in question” and second “whether that meaning may be disparaging to a substantial composite of the referenced group.”[9]  During this inquiry, to determine the likely meaning of the mark, the examiner must look at the goods and services, as well as other factors such as how the mark is used in commerce.[10]  “If that meaning is found to refer to identifiable persons, institutions, beliefs, or national symbols,” then the examiner moves to the second prong.[11]  The Court explained that a “substantial composite” does not necessarily mean a majority.[12]

The PTO found that the term “SLANTS” derogatorily referenced peoples of Asian descent.[13]  Accordingly, the second prong of the analysis was satisfied. The PTO relied upon dictionary definitions, and actual evidence of offended persons as evidence of disparagement – indeed one of the band’s performances had been canceled due to public backlash over their name.[14]   For such reasons, the PTO examiner rejected Tam’s application.[15]

Tam appealed the rejection to the Trademark Trial and Appeal Board (“T.T.A.B.”), which affirmed the examining attorney’s refusal.[16]  Tam subsequently appealed to the Federal Circuit which affirmed; however, on a rehearing en banc, the Federal Circuit vacated and remanded, finding the Clause to be unconstitutional.[17]  The Court explained that the Federal Circuit found the Clause engaged in “view-point based discrimination” regulating expressive components of trademarks, and was therefore unable to withstand either strict or intermediate scrutiny.[18]  The Federal Circuit rejected the PTO’s arguments that trademarks constitute government speech and/or are “a form of a government subsidy.”[19]  Thus, the Supreme Court granted certiorari.[20]

Prior to resolving the Clause’s constitutionality, the Court had to first address Tam’s argument that “the clause does not reach marks that disparage racial or ethnic groups.”[21]  Tam maintained that the Clause could only be applied to marks that disparaged “natural and juristic persons” and, accordingly, did not pertain to racial groups.[22]  Although the Court had already denied certiorari on this question, the Court was obligated to answer, as it was potentially outcome determinative.[23]  Thus, “accepting Tam’s statutory interpretation would resolve this case and leave the First Amendment question for another day” and “[the Court] ought not to pass on questions of constitutionality . . . unless such adjudication is unavoidable.”[24]  Nonetheless, the Court rejected this narrow interpretation, instead finding that “Tam’s argument [was] refuted by the plain terms of the disparagement clause.”[25]  In fact the Clause applies not only to persons, but also to “institutions and beliefs.”[26]  Justice Alito plainly stated, “it is clear that the prohibition against registering trademarks ‘which may disparage . . . persons’ prohibits registrations of terms that disparage persons who share a common race or ethnicity.”[27]  Therefore, determination as to the Clause’s First Amendment implications was justifiably ripe.

Addressing the issue of constitutionality, the Court tackled three primary contentions; any of which, separately and independently, would remove the First Amendment safeguards or reduce the inquiry to the lower rational-basis review.[28]  Those three arguments were “(1) that trademarks are government speech, not private speech, (2) that trademarks are a form of government subsidy, and (3) that the constitutionality of the disparagement clause should be tested under a new ‘government program’ doctrine.”[29]

In regards to the first contention, the Court declined to grant trademark registration the “immunity” afforded to government speech.[30]  The Court found that trademarks “are not dream[t] up by the Federal Government” nor does the PTO edit trademarks.[31]  The Court pointed out that if trademarks constitute government speech, “the Federal Government is babbling prodigiously and incoherently” and is “unashamedly endorsing a vast array of commercial products”— not to mention the vast contradictory viewpoints the government would express.[32]  The Court found that if it were to accept this argument, then copyright registrations would also lose their First Amendment protections.[33]  Therefore the Justices rejected the PTO’s argument and held that “[t]rademarks are private, not government speech.”[34]

The Court then turned to the PTO’s next argument, that “this case is governed by cases in which this Court has upheld the constitutionality of government programs that subsidized speech expressing a particular viewpoint.”[35]  Interestingly, this is a “notoriously tricky” constitutional law issue.[36]  If the Court found trademark registration akin to a government subsidy, it would allow the PTO to circumvent First Amendment protections by allowing the government to deny registration of marks with viewpoints that it does not agree with.[37]  Again, the Court refused to extend the doctrine.  Notably, they found the PTO’s supporting precedent distinguishable from the current situation; specifically because those situations involved cash subsidies.[38]  The Court rejected the claim that cash subsidies were analogous to a trademark registration’s substantial non-monetary benefits.[39]  Indeed, most government services afford some type of non-monetary benefit, and furthermore, trademarks are not the only form of government registration.[40]  Accordingly, the Court rejected this reasoning.

The Court then addressed the Government’s final argument–that the restriction be allowed under a new “government-program” doctrine.[41]  In a sense, the new doctrine, if accepted, would be a merger between the two aforementioned doctrines, and would further reduce Free Speech protections from government agencies.[42]  The Government claimed that the situation at hand was similar to cases[43] where laws allowing public employers to automatically deduct fees from non-union employees to be used by unions in collective bargaining negotiations (but not in political affiliation matters) had been upheld.[44]  Nonetheless, the Court rejected this assertion,[45] finding cases where the government created a public forum for private speech a more appropriate guiding influence.[46]  They noted that in such cases, the Constitution allowed the government to utilize “content- and speaker-based restrictions. . . .”[47]  Notwithstanding this fact, the Court explained, “viewpoint discrimination is forbidden.”[48]  Importantly, “the public expression of ideas may not be prohibited merely because the ideas are themselves offensive to some of their hearers.”[49]  As such, the proposed “government program” doctrine was not a sufficient manner in which to analyze the disparagement clause.

After deciding that trademarks are appropriately subject to First Amendment protection, the Court then turned its attention to the level of review they should utilize.[50]  That is, should trademarks be treated as commercial speech, receiving a less burdensome review, or conversely, as non-commercial speech, subject to a more stringent review?[51]  However, this debate was rendered moot as the Court found that the Clause could not even pass the lesser commercial speech standard, known as the Central Hudson review.[52] Under this analysis the Clause would have to “serve a substantial interest, and . . . be narrowly drawn.”[53]  The Clause was argued to serve two interests: (1) preventing “underrepresented groups from being bombarded with demeaning messages in commercial advertising”; and (2) “protecting the orderly flow of commerce.”[54]  The court disregarded the first contention by saying that even though the Government clearly has an interest in preventing hateful speech, such speech is central to the First Amendment.[55]  This means that the First Amendment’s core purpose is to prevent the Government from being able to censor this type of speech. Indeed, “the proudest boast of our free speech jurisprudence is that we protect the freedom to express the thought we hate.”[56]

The Clause failed the second portion of the test, according to the Court, as it was overly broad.[57]  The Court determined that it applied to “any person, group, or institution.”[58]  Additionally, it protected persons both living and dead, and such speech is very unlikely to disrupt commerce.[59]  In finality, the Court deemed this ruling to be proper policy.  They cautioned against the fine line between commercial speech, and non-commercial speech, in trademarks,[60]  warning that “commercial speech may be cleansed of any expression likely to cause offense.”[61]  Thus the ruling of the Federal Circuit was affirmed and the Disparagement Clause was struck as facially unconstitutional.[62]

Naturally this ruling is of national relevance. “The Slants” are the obvious winners, however the Washington Redskins, and free speech proponents will also be pleased with the outcome.  The Redskins, who are currently appealing the withdrawal of their trademark registration, will certainly be afforded new ammunition to regain what was lost.[63] In light of these national implications, the Cumberland Law Review will follow the ruling’s effect in future cases and keep its readers informed should there be momentous updates.

[1] Candidate for Juris Doctor, Cumberland School of Law 2018; Bachelor of Arts, College of Charleston.

[2] See Matal v. Tam, 137 S. Ct. 1744, 1751 (2017) (“We now hold that this provision violates the Free Speech Clause of the First Amendment.”).

[3] 15 U.S.C. § 1052(a)(2012). See also Tam, 137 S. Ct. at 1751. Trademarks may also be refused for being “merely descriptive, or deceptively misdescriptive” or if the mark “is so similar to an already existing registered trademark or trade name that it is likely to cause confusion.” Tam, 137 S. Ct. at 1753 (internal citations omitted). These are codified in 15 U.S.C. § 1052(e)(1) and 15 U.S.C. § 1052(d), respectively. See id.

[4] See generally Pro Football, Inc. v. Blackhorse, 112 F. Supp. 3d 439 (E.D. Va. 2015); Pro-Football, Inc. v. Harjo, 565 F.3d 880 (Ct. App. D.C. 2009). Indeed, Pro-Football, Inc. even submitted a brief on the matter as amicus curiae on behalf of “The Slants.” See Tam, 137 S. Ct. at 1758.

[5] Tam, 137 S. Ct. at 1751.

[6] Id. at 1747. Although trademarks can be used in commerce without federal registration, doing so provides a number of advantages and protections. Specifically, “it serves as constructive notice of the registrants claim of ownership”; is prima facie evidence of validity of the mark; and makes the mark incontestable after five years of registration. See Tam, 137 S. Ct. at 1753 (quoting 15 U.S.C. § 1072).

[7] Id. at 1751.

[8] Tam, 137 S. Ct. at 1753 (internal quotations omitted).

[9] Id. at 1754 (quoting Trademark Manual of Examining Procedure § 1203.03(b)(i) (Apr. 2017)).

[10] Id. at 1753.

[11] Id.

[12] Id. at 1754.

[13] Id.

[14] Tam, 137 S. Ct. at 1754.

[15] Id.

[16] See In re Tam, 108 U.S.P.Q.2d (West) 1305, *8 (T.T.A.B. 2013) (“We affirm the refusal.”). Specifically, the T.T.A.B. applied the Clause’s established two-pronged test. Id. at *4. They found that (1) the likely meaning of “THE SLANTS” to mean a “derogatory reference to people of Asian descent”; and (2) it was disparaging to a substantial composite of persons. Id. at *5, *7.

[17] In re Tam, 808 F.3d 1321, 1357 (Fed. Cir. 2015) (en banc) (“We hold that the disparagement provision of § 2(a) is unconstitutional because it violates the First Amendment. We vacate the Board’s holding that Mr. Tam’s mark in unregistrable, [sic] and remand this case to the Board for further proceedings.”).

[18] Tam, 137 S. Ct. at 1754.

[19] Id.

[20] Lee v. Tam, 137 S. Ct. 30 (2016) (granting certiorari).

[21] Tam, 137 S. Ct. at 1755.

[22] Id.

[23] Id.

[24] Id. (quoting Spector Motor Serv. Inc, v. McLaughin, 323 U.S. 101, 106 (1944)).

[25] Id. at 1756.

[26] Id.

[27] Tam, 137 S. Ct. at 1756 (internal citations omitted).

[28] Id. at 1757.

[29] Id.

[30] Id. Importantly “government speech” is not limited by the First Amendment. Tam, 137 S. Ct. at 1757. The Court has noted that “it is not easy to imagine how government could function if it were subject to the restrictions that the First Amendment imposes on private speech.” Id. (quoting Pleasant Grove v. Summum, 555 U.S. 460, 467 (2009)) (internal quotation marks omitted).

[31] Id. at 1758.

[32] Id. at 1759 (“[I]f trademarks represent government speech, what does the Government have in mind when it advises Americans to ‘make. believe’ (Sony), ‘Think Differently’ (Apple) . . . or ‘Have it Your Way’ (Burger King)?”).

[33] Tam, 137 S. Ct. at 1760.

[34] Id. More specifically, the Court distinguished the case law on which the Government relied to establish trademarks as government speech. Tam, 137 S. Ct. at 1759-61.  The Court found that the cases primarily involved scenarios in which the Government was the entity registering the trademark, as opposed to a private individual or business. See id. at 1760. Allowing trademark registration to operate as government speech would “constitute a huge and dangerous extension of the government-speech doctrine.” Id.

[35] Tam, 137 S. Ct. at 1760.

[36] Id.

[37] Id. at 1761.

[38] Id.

[39] Id.

[40] Tam, 137 S. Ct. at 1761 (again noting how doing so would implicate far more governmental activities than just trademarks, which the Court found to be a dangerous limitation of Free Speech protections).

[41] Id.

[42] Id. However, the doctrine is not simply a merger of the “government speech” or “government subsidy” doctrines as it incorporates a third element derived from automatic deduction of union dues from non-union employee cases. Id. at 1761-62.

[43] Specifically, two cases: Davenport v. Washington Ed. Assn., 551 U.S. 177 (2007); Yasura v. Pocatello Ed. Assn., 555 U.S. 353 (2009).

[44] Tam, 137 S. Ct. at 1762.

[45] Id. (“[T]hose cases occupy a special area of First Amendment case law, and they are far removed from the registration of trademarks.”).

[46] Id. at 1763.

[47] Id.

[48] Id. (internal quotation marks omitted).

[49] Id. (quoting Street v. N.Y., 394 U.S. 576, 592 (1969))(internal quotation marks omitted). The court determined that here, the Clause clearly was viewpoint discrimination even though it applied evenhandedly to all groups. Tam, 137 S. Ct. at 1763. This is so because it denies registration “to any mark that is offensive to a substantial percentage of the members of any group.” Id. It seemingly discriminates against the viewpoint of the offending speaker. See id.

[50] Tam, 137 S. Ct. at 1763-64.

[51] Id. at 1764. The Government maintains that trademarks are commercial and are regulated to ensure stability in intrastate commerce. Id. On the other hand, Tam argued that his trademark extends beyond mere commercial speech, and at its core is expressive, i.e. “these trademarks do not simply identify the source of a product or service but go on to say something more. . . .”).

[52] Id.

[53] Id. (internal quotation marks omitted).

[54] Id. This is the Court’s generalization of the interests offered in both the Government’s and amicus briefs. See id.

[55] Tam, 137 S. Ct. at 1764.

[56] Id. (quoting U.S. v. Schwimmer, 279 U.S. 644, 655 (1929) (Holmes, J. dissenting))(internal quotation marks omitted).

[57] Id. at 1765. (“[I]t goes much further than is necessary to serve the interest asserted.”).

[58] Id. (emphasis in original).

[59] Id.

[60] Id.

[61] Tam, 137 S. Ct. at 1765.

[62] Id. Justice Gorsuch did not participate in the opinion. Additionally, Justice Kennedy, wrote a concurring opinion in which Justices Ginsberg, Kagan, and Sotomayor joined in.

[63] Appeal of Pro-Football, Inc. v. Amanda Blackhorse, 112 F. Supp. 3d 439 filed on August 6, 2015 to the 4th Circuit Court of Appeals.

 

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