Tuesday, June 20, 2017

Supreme Court Declares Disparagement Provision of Section 2(a) Unconstitutional

In case you haven't heard, the Supreme Court ruled yesterday that the disparagement provision of Section 2(a) of the Trademark Act is facially unconstitutional because it violates the Free Speech clause of the First Amendment. "It offends a bedrock First Amendment principle: Speech may not be banned on the ground that it expresses ideas that offend." Matal v. Tam, 582 U.S. ___, 122 USPQ2d 1757 (2017).

The Slants album cover

Simon Tam's application to register the mark THE SLANTS for a musical band was refused registration under Section 2(a), which in pertinent part bars the registration of marks that may "disparage ... or bring into contemp[t] or disrepute" and "persons, living or dead." The TTAB affirmed the refusal [here], but the CAFC reversed [here].

The Supreme Court, in an opinion by Justice Alito, observed that federal registration "confers important legal rights and benefits on trademark owners who register their marks." B&B Hardware, 575 U.S. ___, at ___. Registration serves as constructive notice of a registrant's claim of ownership, provides prima facie evidence of the validity of the mark and its registration and of the owner's exclusive right to use the mark, enables a mark to be rendered "incontestable" after five years of use, and allows the owner to stop importation of infringing goods.

The Court thoroughly rejected the Government's arguments that trademarks are government speech, that trademarks are a form of government subsidy, and that the disparagement clause should be tested under a new "government-program" doctrine. The Court observed that even in situations where some content- and speaker-based restriction may be allowed, "viewpoint discrimination" is forbidden.

Our cases use the term “viewpoint” discrimination in a broad sense, ... and in that sense, the disparagement clause discriminates on the bases of “viewpoint.” To be sure, the clause evenhandedly prohibits disparagement of all groups. It applies equally to marks that damn Democrats and Republicans, capitalists and socialists, and those arrayed on both sides of every possible issue. It denies registration to any mark that is offensive to a substantial percentage of the members of any group. But in the sense relevant here, that is viewpoint discrimination: Giving offense is a viewpoint.

The Government argued that all trademarks are commercial speech and thus subject to relaxed scrutiny under the First Amendment, as outlined in Central Hudson Gas Elec. Corp. v. Public Serv. Comm’n of N. Y., 447 U. S. 557 (1980). The Court side-stepped that question because it found that the disparagement clause of Section 2(a) "cannot withstand even Central Hudson review."

Under Central Hudson, a restriction of speech must serve "a substantial interest," and it must be "narrowly drawn." Id., at 564–565 (internal quotation marks omitted). This means, among other things, that "[t]he regulatory technique may extend only as far as the interest it serves." Id., at 565. The disparagement clause fails this requirement.

The Government claimed an interest in preventing speech that expresses offensive ideas, but that position "strikes at the heart of the First Amendment." Demeaning speech may be hateful, but the Constitution protects the freedom to express hateful thought. The Government also claimed another interest is to protect the orderly flow of commerce, since discriminatory conduct has an adverse effect on commerce. But, the Court pointed out, the disparagement provision is not "narrowly drawn to drive out invidious discrimination." It applies to any trademark that disparages any person, group, or institution. "It is not an anti-discrimination clause; it is a happy-talk clause," and goes further than necessary to serve the asserted interest.

The Court therefore held the disparagement provision of Section 2(a) to be unconstitutional on its face.

In a concurring opinion, Justice Kennedy observed that "[t]he central purpose of trademark registration is to facilitate source identification."

To serve that broad purpose, the Government has provided the benefits of federal registration to millions of marks identifying every type of product and cause. Registered trademarks do so by means of a wide diversity of words, symbols, and messages. Whether a mark is disparaging bears no plausible relation to that goal.

Read comments and post your comment here.

TTABlog comment: Not a surprising outcome, but one that is not welcomed by many. Next up: the "scandalous and immoral" provision of Section 2(a). The FUCT appeal (In re Brunetti) is currently suspended at the CAFC. In a January 2016 letter [here], the Director of the USPTO recommended that the case be remanded to the USPTO because the reasoning in the CAFC's Tam decision "requires the invalidation of Section 2(a)’s prohibition against registering scandalous and immoral marks as well."

Text Copyright John L. Welch 2017.


At 7:46 AM, Anonymous Anonymous said...

Some people say the "floodgates will now open" for applications that previously might have been refused as disparaging, but I don't see this happening at all. Sure, there will be more applications for disparaging marks, but I suspect most people who were inclined to file disparaging marks previously were filing anyway without the benefit of counsel. So I expect the uptick now to be negligible, and probably most will never end up registering anyway due to lack of use. Fears of a deluge of disparaging marks are in my view way overblown.

At 8:38 AM, Anonymous Erik Pelton said...

I agree with "anonymous." While this case is rightfully quite newsworthy given the importance of the First Amendment and the involvement of the Redskins brand (worth $3 billion according to Forbes), in the end this ruling will not affect trademark practices for 99.9% of brands.

At 9:24 AM, Anonymous Anonymous said...

What of Applicants who failed to overcome a disparagement objection in the past? Are their applications now revived, filing dates and priority preserved?

At 9:46 AM, Anonymous Anonymous said...

I would have liked to see a little more discussion of whether TM's are really speech in the first place, as opposed to merely source indicators. If TM's aren't speech then there's no need to implicate the 1st Amendment. I know that everyone wants their marks to be speech (or a lifestyle/statement) but the TM Act is really only about source indicators. If one is going to strike down part of a 71 year old law, it's not too much to ask for them to lay a thorough foundation.

Also, this just shifts the burden of policing disparaging marks to the marketplace, i.e., businesses and consumers. People with offensive marks will likely point to the PTO's "approval" of their marks to argue that retailers should carry their brands. Does anyone remember the Darlie/Darkie brand of toothpaste sold in Asia? https://en.wikipedia.org/wiki/Darlie

At 10:51 AM, Anonymous Anonymous said...

I disagree with what seems to be the general consensus. I predict a land grab for choice four letter words (and interesting variants) for t-shirts (and other easily sold goods). We all know how unfortunately easy (however fraudulent) it is to meet the specimen requirement.

At 11:23 AM, Anonymous Anonymous said...

Nice how the opinion says the disparagement clause violates free speech without noting that registration restrictions don't, you know, restrict speech.

At 2:01 PM, Anonymous MorrisP said...

While there may not be a "deluge" of marks featuring racial slurs and the like, it seems unavoidable that at least certain such marks will eventually register -- and they may not be marks that seek to "reclaim" the terms in question (like Tam's mark). And if the "scandalous and immoral" prohibition does fall next (as it almost surely will), that may open something more akin to "floodgates"... I'm sure we have all observed numerous filings for the sort of marks that are routinely denied under that prohibition.

So we will be faced with the strange and uncomfortable spectacle of such marks appearing on the Federal register, marked in commerce with an (R), etc. Perhaps this is simply the price we pay, if the prohibitions in 2(a) could not survive constitutional scrutiny. But while I am hesitant to substitute my own (meager) understanding of First Amendment law for that of a unanimous Supreme Court, I still struggle to wrap my head around the decision.

At 3:45 PM, Anonymous Anonymous said...

How do surnames, descriptive marks, geographically descriptive marks survive - why is First Amendment not implicated?

At 4:28 PM, Anonymous Anonymous said...

What happens to the application now? Is it going to be re-examined with the Supreme Court decision taken into consideration? How often do ex-parte appeals reach the U.S. Supreme Court?

At 6:41 PM, Anonymous Anonymous said...

Anonymous at 9:46am wrote, "I would have liked to see a little more discussion of whether TM's are really speech in the first place, as opposed to merely source indicators. If TM's aren't speech then there's no need to implicate the 1st Amendment. I know that everyone wants their marks to be speech (or a lifestyle/statement) but the TM Act is really only about source indicators."

There's no reason a trademark can't be both "speech" and a trademark (i.e., a source identifier). THE SLANTS is a good example.

At 1:03 PM, Anonymous Anonymous said...

Anonymous @ 6:41: A trademark isn't anything but an abstract construct until it's USED. The registration restrictions do not apply to USE. And, even when used, trademarks express nothing but source identification. See Friedman v. Rogers, 440 U.S. 1, 11 (1979). See also definition of trademark in section 45. This is the mistake the court made. So eager to dive into sexy First Amendment doctrine that they forgot to truly examine the Act that the First Amendment was being applied to (and to look at their own precedent).

At 4:45 PM, Anonymous David Welkowitz said...

Anonymous @1:03: In Friedman, I don't think the Court said that trademarks are not speech (at least not on the page you cited). They said that the trademark in question was simply commercial speech--meaning it was subject to a lesser degree of scrutiny. Friedman was also written at an early stage of the development of the commercial speech doctrine (well before Central Hudson, for example). FWIW, in Tam, four Justices found that section 2(a) could not survive even a lower level of scrutiny, while the other four declined to address that question directly.

At 6:43 PM, Anonymous Anonymous said...

Anonymous at 1:03pm: You didn't answer the question: why can't a term be both a trademark and speech? Neither Friedman v. Rogers nor Section 45 states that a trademark can't be "speech", and indeed that's silly. Take the THE SLANTS as an example. The essence of the refusal under 2(a) was that THE SLANTS -- when used, of course -- would be disparaging to a substantial composite of the referenced group. The applicant wanted to re-claim the term "slants" whereas the government said it would nonetheless be disparaging, but everyone agreed the mark expressed an idea. I simply don't understand why you believe a trademark cannot be expressive in addition to functioning as a source-identifier.

At 4:09 AM, Anonymous Anonymous said...

It seems the Supreme Court can't win. Some would condemn a contrary ruling as PC. Instead they are chided for an eager but unnecessary "dive into sexy First Amendment doctrine." That's too bad, as Tam is very straight forward and correctly decided. But the result would have been the same if Tam proceeded on the basis of equal protection or commerce clause with the same result.

At 9:07 AM, Anonymous Keith said...

A disparaging slogan placed on a shirt front could still (at least initially) be refused as merely ornamentation, or a product feature, i.e., not a trademark.

At 2:01 PM, Anonymous Anonymous said...

The court in Tam rejected the proposition that when the government grants a federal registration to certain private speech (a trademark) that speech is transformed into government speech.

Maybe so, but the R in a circle federal trademark registration notice that can be used once a mark is registered is viewed by the public as a seal of approval from the federal government. It is surely governmental speech, and its use in connection with a disparaging mark should be as regulatable as the Confederate flag on a license plate in the 2015 Walker case.


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