SUPREME COURT RULES 8-0: TRADEMARK DISPARAGEMENT CLAUSE UNCONSTITUTIONAL

The law that called for the cancellation of the NFL Redskins trademark registrations, because the marks were deemed to be disparaging to Native Americans, has been found to be unconstitutional in an 8-0 decision by the United States Supreme Court today. Here, the case at issue was the Federal Circuit’s en banc ruling in Lee v. Tam, which found the Disparagement Clause of the Lanham Act to be a facially unconstitutional prohibition of speech under the First Amendment.

The case involved a musical band named THE SLANTS, comprised of Asian-Americans. The band’s trademark application was refused on the basis that it was a violation of Section 2(a) of the Lanham Act, 15 U.S.C. Section 1052(a), as the term “slants” was deemed to be disparaging toward individuals of Asian descent. The owner of the THE SLANTS application, Simon Tam, an Asian-American himself, chose the name to be empowering, in light of the term’s disparaging origin, and appealed the USPTO’s decision. At first, the Trademark Trial and Appeal Board, and later the Federal Circuit, upheld the ruling as a violation of Section 2(a). However, in a rare, subsequent, en banc ruling, the Federal Circuit found Section 2(a) to be a facially unconstitutional violation of free speech under the First Amendment. The government appealed the Federal Circuit’s decision to the Supreme Court, who heard the case at the start of this year.

Speculations of a split decision flurried following oral arguments in January, and in a way, those speculations were partially confirmed today. Only 4 of the sitting 8 Justices, namely, Alito (who wrote the majority opinion), Roberts, Thomas and Breyer, found the need to undergo a legal analysis considering whether federal trademarks are: i) government-subsidized speech or ii) commercial speech, both with relaxed standards of First Amendment protections. The other Justices, Ginsburg, Sotomayor and Kagan, joined in a concurring opinion written by Justice Kennedy, wherein he laid out the justification for why the Disparagement Clause in trademark law was a facially unconstitutional violation of the First Amendment, subject to strict scrutiny standards (the most rigorous legal standard for upholding a law as Constitutional).

All of the sitting 8 Justices joined Justice Alito in ruling that federal trademarks are private speech, not government speech, and that the prohibition on scandalous/disparaging marks amounted to viewpoint discrimination. Justice Alito wrote, “[o]ur cases use the term ‘viewpoint’ discrimination in a broad sense, . . . and in that sense, the disparagement clause discriminates on the bases of ‘viewpoint.’ . . . Giving offense is a viewpoint.”

The majority opinion went on to refute the contention that trademark registration should be considered government-subsidized speech, subject to relaxed standards. The Court distinguished this case from others, where the government had permissibly restricted speech in the process of bestowing a benefit to a party, by noting such cases involved cash benefits; whereas, here, trademark law grants no cash benefits. Instead, trademark law requires trademark owners to pay substantial fees for applications and the continued registration of marks. The Court noted that the government does indeed incur expenses for providing the benefits of trademark registration, but so do nearly all government programs that benefit the public, “like police and fire protection, as well as services that are only utilized by some, e.g. the adjudication of private lawsuits and the use of public parks and highways.” Therefore, federal trademark registration was held not to be considered government-subsidized speech.

Finally, the majority opinion refused to consider the question of whether trademark registration was commercial speech, holding, even under the more relaxed intermediate scrutiny standard for commercial speech, outlined under Central Hudson Gas & Elect. v. Public Serv. Comm’n of N. Y., 447 U. S. 557 (1980), Section 2(a) was not narrowly tailored to meet the interests asserted by the government. The government claimed it had an interest in the orderly flow of commerce, which could be disrupted by trademark registration of marks considered tantamount to discriminatory conduct. However, the Court found, “the clause is not ‘narrowly drawn’ to drive out trademarks that support invidious discrimination”, as it reaches any trademark that disparages any person, group or institution. “It is not an anti-discrimination clause,” wrote Justice Alito, “it is a happy-talk clause. In this way, it goes much further than is necessary to serve the interest asserted.”

Kennedy’s concurring opinion went even further, stating, “the viewpoint discrimination rationale renders unnecessary any extended treatment of other questions raised by the parties.” The government had argued the law to be “viewpoint neutral”. It claimed the Trademark Office is not concerned with a trademark applicant’s personal views and does not prohibit speech on one side of an issue or another, but rather is concerned with the potential reaction to the mark by the applicant’s intended audience. Kennedy, however, opined that, “[t]he First Amendment’s viewpoint neutrality principle protects more than the right to identify with a particular side”, and by prohibiting marks that members of the public may consider scandalous and/or disparaging, “[t]he law thus reflects the Government’s disapproval of a subset of messages it finds offensive. This is the essence of viewpoint discrimination.”

Even though Justice Thomas joined in the majority, he wrote a separate concurrence to highlight his opinion that classifying certain types of speech as "commercial" would not automatically lower the Court's scrutiny standard. "I continue to believe that when the government seeks to restrict truthful speech in order to suppress the ideas it conveys, strict scrutiny is appropriate, whether or not the speech in question may be characterized as 'commercial'," wrote Justice Thomas, quoting from his concurring opinion in Lorillard Tobacco Co. v. Reilly, 539 U.S. 525, 572 (2001).

Both the majority and concurring opinions seemed to give much deference to past free speech cases dealing with prohibitions on offensive speech. “If there is a bedrock principle underlying the First Amendment, it is that the government may not prohibit the expression of an idea simply because society finds the idea itself offensive or disagreeable”, wrote Justice Alito in the majority opinion, quoting Texas v. Johnson, 491 U. S. 397, 414 (1989). The Court thus unanimously found Section 2(a) of the Lanham Act to be unconstitutional, as it provided for a government prohibition on speech it considers to be offensive to a relevant audience.

The Supreme Court’s unanimous decision now opens the floodgates for applicants to register any scandalous or disparaging mark, no matter how vulgar. As a direct result of this decision, the NFL Redskins will regain federal protection for their marks, ending a long-fought battle over some highly lucrative intellectual property. Additionally, trademark applications that were suspended, pending this ruling, due to a determination that the marks were scandalous and/or disparaging, will proceed through the remaining application process. The door is now open for you to register the offensive mark of your choosing.

If you have a trademark, slogan or logo you wish to protect, call the offices of Reyes & Schroeder Associates, P.C., at 818-253-1641, or e-mail us at info@rslawca.com. We are highly experienced in trademark prosecution services and obtaining successful registrations at the USPTO for our clients. Our qualified attorneys will insure you receive the highest quality legal counsel, necessary to secure protection of your marks across the entire United States. You may read the full opinion of the Supreme Court’s decision in Matal v. Tam, 582 U. S. ____ (2017), discussed above in this article - click here.

About the Author: Michael W. Schroeder is a licensed attorney in good standing in the State of California with extensive experience in trademark prosecution, litigation and transactional legal services.