“Simple and correct” or “tremendous damage to minorities”? Opinion split on Matal v Tam decision 20 Jun 17
The long-awaited Supreme Court decision in Matal v Tam was handed down yesterday and immediately caused heated debate. Following our coverage of the decision, we approached a number of trademark experts to obtain their analysis of the wider implications and what it practically means.
As we reported, the court held that the disparagement clause of the Lanham Act violates the Free Speech Clause of the First Amendment. A few hours after the decision was handed down, The Slants’ Simon Tam offered his reaction on Facebook, stating: “The Supreme Court has vindicated First Amendment rights not only for The Slants, but all Americans who are fighting against paternal government policies that ultimately lead to viewpoint discrimination… Irony, wit, satire, parody... are essential for democracy to thrive, these are weapons that neuter malice.”
By contrast, The National Asian Pacific American Bar Association (NAPABA) released a statement expressing concern about the ruling. “The ability of any business or individual to have the exclusive ability to profit from racial slurs using a federal trademark, no matter their intent, has harmful consequences,” claimed NAPABA president Cyndie M Chang.
When we approached the trademark community for response, the feedback was similarly mixed. Below we present the responses we received. As a reminder, these are personal opinions and do not necessarily reflect the views of any practitioner's law firm or organisation:
Jennifer Lee Taylor, chair of the trademark practice of law firm Morrison & Foerster:
The ruling appears to be very narrow as the court rejected the government’s arguments that trademark registration creates a type of government speech or a government subsidy. The government’s promotion of these arguments in its briefing surprised many in the trademark community, so this conclusion seems appropriate. Instead, the court affirmed that the non-disparagement clause of the Lanham Act constitutes viewpoint discrimination. It will be interesting to see if how this reasoning might be used in the future with respect to other government programs. Finally, Section 2(a) of the Lanham Act proscribes the registration of immoral, deceptive, or scandalous trademarks, as well as trademarks that disparage others. The opinion does not mention how its ruling might affect registrations of marks that are considered immoral or scandalous, but do not disparage a particular group, because that issue was not before the court. We can expect to see applicants claiming violations of their First Amendment rights when arguing against refusals of such marks in the future.
Michael Kelber, partner and co-chair of the Intellectual Property practice group at Chicago law firm Neal Gerber & Eisenberg:
It’s pretty sweeping – the disparagement clause can’t survive in view of the First Amendment. This should resolve the Redskins case too, Washington will get to keep its trademark registrations. The court was split on a couple of the finer points raised by the government, but they all agreed that registration of a trademark did not constitute government speech, and thus, regardless of whether trademarks are commercial or private speech, it was unconstitutional for the government to restrict their registration based on the message they convey. This opinion would also make it hard for the bar against scandalous marks to survive.
Elizabeth King, principal at Sutton McAughan Deaver PLLC:
I would first say that I think the Tam case was not a good case for the USPTO to have before the CAFC during the pending Redskins dispute. It is easy to play armchair quarterback, but the board probably ought to have thought twice before affirming the 2(a) refusal here. The reason I say that is that the case involved the rare situation where a group that has been subjected to prejudice and discrimination reclaimed an epithet and used that name to promote and reclaim its own identity. This is a pretty stark contrast from the Redskins situation. Moreover, in Tam the evidence that the term THE SLANTS would be perceived as disparaging by the Asian community was razor-thin; and there was inconsistent evidence in the file. Having said that, for whatever reason the board ruled as it did teeing up the nightmare scenario we have now, namely the entire disparagement clause has been thrown out as unconstitutional and it seems likely that the prohibition against other marks (for instance scandalous marks) under Section 2(a) is to follow.
Having said that, it is my opinion that the court's ruling today is going to do tremendous damage to minorities, women, the oppressed of all backgrounds and, of course, most urgently the Native American community in the Redskins case. The court did not adequately address the issue of commercial speech. Instead it glossed over the fact that trademarks are commercial speech and it wrongly dismissed the notion that a USPTO federal trademark registration is a type of federal subsidy. Respectfully, I could not disagree more with the court.
As this very court held in 2015 in B&B Hardware, benefits conferred by a federal registration are "significant". There is no doubt that a federal registration operates as a type of subsidy: it confers extraordinary rights such as constructive first use in all fifty states from the date the application is filed, to the presumptions of validity, ownership, and use of the mark should one need to sue to enforce it. Yet the court actually compared this to the non-monetary benefits of any governmental service such as the Fire Department or the Police. In my opinion this is legal sophistry.
The non-monetary benefits of the Fire Department or the Police benefit all of society; they are for the good of all of society. The non-monetary subsidy of the federal registration benefits the mark holder alone. It is a commercial benefit. It states that after five years even a senior user cannot cancel the registration. That is a huge benefit that is singularly commercial and singularly to the benefit of the registrant. So when the court states that the regulation cannot meet the Central Hudson standard of being narrowly tailored, it makes that assertion without support: the prohibition applies to a single mark vis-a-vis a specific person or group. The court simply did not give adequate analysis to commercial speech and its comparison of the commercial subsidy conferred in trademark registration to the societal expenditure of the police force is simply not supportable.
Ultimately what the court has done in the last two landmark trademark cases (B&B Hardware and Tam – both authored by Justice Alito) is tell the public the following:
1. Federal trademark registration is significant; it matters; it means something. (B&B)
2. Federal trademark registration means nothing. It isn't even a non-monetary commercial subsidy. (Tam)
Obviously these two principles stand in conflict with one another. Meanwhile, the entire Lanham Act is predicated upon registering marks used in 'commerce which Congress can regulate' which makes the notion that the registration isn't a commercial subsidy hard to fathom. Contrast this with copyright where no commercial use is required. There is simply no comparison.
Many First Amendment lawyers and groups I support and admire such as the ACLU applaud this decision. But the Tam case involves very unique facts. The reality of these types of marks is that they are designed to operate as ethnic, gender, sexual-orientation or racial slurs. They are targeted hatred toward a group of persons. The court has required the USPTO to grant federal registration to those slurs so long as the mark holder uses it as a mark in commerce and it meets all the other requirements for operation as a mark entitled to registration. Regardless of what the court wrote today, that registration carries with it powerful benefits. And so, this goes well beyond free speech. It subsidises targeted hate. To quote Justice Alito in B&B Hardware, that is significant.
Gregory J. Chinlund, a partner at Marshall, Gerstein & Borun:
Ostensibly, the decision should bring to a conclusion Pro Football Inc.’s decades-long battles surrounding its federal registrations of REDSKINS marks. Another rather interesting question to ask is whether the decision eventually leads to the additional Lanham Act prohibitions against registration of immoral and scandalous marks being overturned. Whether or not there will be a rush to register disparaging marks with the USPTO remains to be seen. An uptick may be expected but probably from those otherwise would-be applicants seeking to bring social issues to light (like Tam) or simply as a means to protect a controversial (intentional or not) commercial identity.
Anne Gilson LaLonde, author of Gilson on Trademarks:
In the short term, press coverage of the opinion is likely to spawn a brief ‘covfefe’-like surge in US trademark applications. In other words, people unaware of how trademark law works will try to secure a monopoly on various disparaging terms without actual use or bona fide intent to use. But USPTO rejections for lack of intent to use remain constitutional and will continue no matter what the mark happens to be. Rejections for failure to function as a trademark are also still constitutional. Many of the near-term applications for offensive terms, then, will be properly rejected.
The REDSKINS trademarks will remain on the USPTO register, after all the years of fighting over their cancellation. After Matal, the Fourth Circuit has no path forward to ordering the cancellation of those registrations on the ground of disparagement.
As for scandalous marks, I predict that the Federal Circuit will soon rule that FUCT can be registered for apparel in the pending In re Brunetti case. First, the Supreme Court held that offensiveness is not a constitutionally legitimate reason to bar trademark registrations. The Matal plurality quoted an earlier case reminding us that the Supreme Court has "said time and again that 'the public expression of ideas may not be prohibited merely because the ideas are themselves offensive to some of their hearers'”. And Justice Kennedy's concurrence emphasised that the government cannot suppress "a subset of messages it finds offensive" because doing so constitutes viewpoint discrimination.
Second, in its Tam opinion finding the disparagement bar unconstitutional, the Federal Circuit said that "other portions of § 2 may likewise constitute government regulation of expression based on message, such as the exclusions of immoral or scandalous marks." And it explicitly overruled part of a 1981 decision finding the ban on registering scandalous marks to be constitutional. And third, after oral argument in Brunetti, the Federal Circuit asked the USPTO whether Tam would apply to scandalous marks. In a letter brief, the USPTO stated that, yes, the same reasoning would apply to the scandalousness bar.
After Brunetti, then, the scandalousness bar will go the way of the disparagement bar. We may see re-application for marks that were previously denied registration under one of those prohibitions. And companies that use terms with sexual connotations to indicate source in, for example, the pornography market can finally obtain registrations.
Some commenters have concluded that the Matal opinion is bad for minorities and good for hate speech. Here's the answer the court gives in its plurality opinion: The disparagement clause "evenhandedly prohibits disparagement of all groups". So it applies to marks that disparage racists, sexists and homophobes (the court's examples) in addition to those that disparage members of a racial or ethnic minority. That reasoning seems somewhat disingenuous, if literally true.
Perhaps more relevant, in the United States, a trademark does not need to be registered to be used as a trademark. The opinion also doesn't change producers' ability to ornament their goods with offensive terms, if they want to. They could have done that regardless of the disparagement bar. And there are plenty of t-shirts emblazoned with such terms, proclaiming the wearer's hatred for a particular group.
It's squarely up to consumers to decide whether to buy products displaying disparaging terms. Will customers really turn out in droves to buy potato chips, kitchen appliances or purses sold with a label bearing a racial slur? Will they go out to eat in restaurants that bear a name that disparages a particular religious group or sexual orientation? If they do, it's a symptom of underlying causes that go far deeper than trademark registration. Still, there may be a subset of consumers who support those trying to reclaim an offensive word, like The Slants or the owners of the DYKES ON BIKES mark.
Finally, I assume that at some point Congress will reluctantly amend the Lanham Act to eliminate the bar on registration of disparaging and scandalous marks. It won't be a popular bill because no politician wants to come out in favor of disparagement, scandalousness and offensiveness. But the Matal opinion doesn't leave Congress many options.
Mark Sommers, a partner at Finnegan:
The court of public opinion is now the final arbiter over federally registering disparaging words and racial slurs as brand names, as SCOTUS struck down the Lanham Act’s prohibition against registering such words as trademarks under Section 2(a). In sum, the federal government’s 70-plus year tenure in making determinations of disparaging words has ended, as it amounted to viewpoint discrimination in violation of free speech. As Justice Alito penned in the majority opinion, “the proudest boast of our free speech jurisprudence is that we protect the freedom to express ‘the thought that we hate’”, while then labelling Section 2(a) as “not an anti-discrimination clause; it is a happy-talk clause” not so narrowly drawn to only “drive out trademarks that support invidious discrimination”.
Justice Kennedy’s concurring opinion debunked Section 2(a)’s claimed “viewpoint neutrality,” in noting that any subject first defined by its content and then approved based on only one particular type of comment [“a positive or benign mark but not a derogatory one”] is not viewpoint neutral. And while some may point to merchants as the ultimate winners of today’s decision under the pretext that disparaging words can now be federally registered as exclusive, proprietary trademarks, that would too hasty. After all, merchants must now commercially balance the federal ownership of source-identifying disparaging words against their inherent repugnant nature and associated public blowback and outrage – a similar balance to that which has existed under the common law in the marketplace for generations.
Ted Davis, a partner at Kilpatrick Townsend:
The opinion is further evidence of the court’s departure from its traditional reliance on Central Hudson when determining whether a government restriction violates the Free Speech Clause. Although Central Hudson makes a late appearance in the opinion, it does so only after the court has reached a holding of unconstitutionality based on the statutory language’s lack of viewpoint neutrality. Such an approach should immunise most of the other prohibitions on registration set forth in the Lanham Act, eg, those bearing on deceptive marks, abandoned marks, functional matter, etc, from similar constitutional challenges: With the exception of Section 2(a)’s prohibition on the registration of immoral and scandalous marks (which the USPTO has conceded are similarly situated), those prohibitions are viewpoint-neutral, and the odds of the opinion taking down the entire registration system therefore are slim.
Ed Timberlake, attorney at law at Forrest Firm:
Throughout the course of the case it has seemed that people have a tendency to lump into the same basket what are actually distinct refusals [specifically offensiveness (ie, scandalous and immoral) and disparagement]. To me, it seems significant that disparagement is altogether more pointed than offensiveness. It seems to me quite reasonable for government to say you can adopt something as a trademark, you can use something as a trademark, you can enforce something as a trademark, but if it singles out members of an identifiable group, a substantial composite of who may feel disparaged – not simply slighted, not merely offended, but singled-out and disparaged – then don't expect us also to give you a gold star.
It's perhaps understandable that people want to jump straight to what will happen with applications for registration currently suspended based on scandalousness (court cases have tended not to treat scandalousness and immorality as separate issues), but I think we'd do well to spend a little time letting disparagement sink in first. ‘US Seeing Great Advances in Disparagement’ is hardly a headline to be proud of (particularly at this moment). Also worth noting is the mind-bending nature of Tam being wrapped in the flag and announced with the trumpet fanfares that typically accompany discussions of the First Amendment when the upshot of his hard-won registration is that Tam (who has been free to use the name The Slants all along) will now presumably proceed to start limiting the speech of all other bands similarly bent on reclamation.
Marsha Gentner, a senior counsel at Dykema:
It is interesting that the decision, essentially, was unanimous. All eight justices agreed that the provision is facially unconstitutional under the First Amendment; that the provision constitutes viewpoint discrimination; it does not involve or constitute a government subsidy or government speech; and that whatever test is used (strict or relaxed scrutiny) it doesn’t pass muster. This is in contrast to the en banc Federal Circuit decision, which had three judges who found the provision facially constitutional, two of whom would have upheld the provision as written and applied to Tam.
From a registrability perspective, I don’t see it as having much of an impact as respects contested court proceedings. The Redskins case, of course, is a high profile case, but as respects contested proceedings regarding the issue of registration, in my experience these cases are fairly rare. And it’s probably not the greatest business policy to knowingly offend a large segment of your potential customer base with the mark you choose, regardless of whether or not the USPTO will register it.
I also count five justices (Kennedy, Ginsburg, Sotomayor , Kagan, and Thomas) who believe that, with respect to trademarks, if the challenged action constitutes viewpoint discrimination, it is subject to strict scrutiny, regardless of its status as speech essentially commercial in nature. There have been some recent cases where organisations have used trademark infringement claims to ‘counter attack’ persons or groups opposed to them or their objectives, and this position could have some effect on those cases (making a First amendment defence to a trademark infringement claim easier to maintain). But the trend has been, in those cases bordering on or crossing the viewpoint discrimination line, to sustain the First Amendment defence, so as a practical matter I don’t know there will be much difference there.
What I’m interested in seeing is whether and how cases with marks that would not have been registered in the past will fare now in the courts. I’m thinking of cases involving infringement of a mark that includes a swastika, or depicts the prophet Mohammed (or Jesus Christ) in otherwise lewd marks, or the Kathy Griffin example of the president’s severed head. Granted, such cases may not play well in front of a jury, but what about judges called upon to rule on preliminary injunctions or summary judgment motions?
There has been so much talk lately about the tenor of public discourse – I’m expecting it to get a whole lot more “course” in the trademark field in the future, and that is going to make for some uncomfortable court (infringement) cases.
Susan Weller, member at Mintz Levin:
In my opinion, the Supreme Court's opinion is quite simple and correct. Trademarks are private speech, not government speech, which, thus, prevents any government censorship of the content of trademarks which express an opinion or viewpoint. That is viewpoint discrimination. Of course, adopting a brand that is a moniker of hate and derision would not seem to be a prudent business decision. Moreover, any effort to suppress free speech, even hate speech, is a dangerous proposition.
Mark H Jaffe, trademark and copyright lawyer at Tor Ekeland PC:
While we will probably see a glut of smutty, offensive, and outrageous applications to register trademarks, I don’t foresee a major impact on commercial activity. Brands and manufacturers who adopt offensive names have done so without concern of whether these names could be registered. And many of these applications are for applicants who aren’t likely to make any widespread use of these trademarks.
I would have liked to see more lawyers and artists discuss the implications of Simon Tam being the applicant, as opposed to a partnership or other entity formed for The Slants band. I’ve frequently said that the most important trademark consideration for a band isn’t how to register its trademark, but who owns it. I understand that Tam initially applied to register the trademark before he retained counsel. Often, the individual applicant later assigns the rights to a newly-formed entity and records that assignment with the USPTO. But in this case, once the trademark is registered, the presumption is that it is owned by Simon Tam and not the other band members. This could be significant if there are changes in band membership. We’ve seen this countless times with bands, fighting over uses of the band a name.
Of course, the most obvious winners here are Dan Snyder, the Washington football team, and the Cleveland Indians. There’s little doubt that challenges to the team’s trademark registration will not survive this decision, and there’s no other entity that needed this decision more than the ‘Skins did. Ultimately, I doubt the activists trying to compel Washington to change its name and Cleveland to change its logo will slow down in their fight. Nor should they. Although I hope that both teams make the right decision and correct their wrongs, the battle to cancel their trademarks was an awkward way to achieve that purpose. There is virtually no other way to have the government compel these teams to make these changes. Given that the motive was ultimately to make these teams change their speech, it drove home the First Amendment implications of their challenges. I feel for the activists, but in many First Amendment battles we will have to side with the bad guys and against the well-meaning.
Opinion is clearly divided on the wider implications of Matal v Tam and the practical outcomes that the court's decision will lead to. We'll have further coverage in a forthcoming issue of the magazine.
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