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Why it matters: On June 19, 2017, the Supreme Court held in Matal v. Tam that Section 2(a) of the Lanham (Trademark) Actcommonly known as the disparagement clauseviolates the First Amendment.

Detailed discussion: On June 19, 2017, the Supreme Court held in Matal v. Tam that Section 2(a) of the Lanham (Trademark) Act violates the First Amendment. Section 2(a), commonly known as the disparagement clause, reads in relevant part that [n]o trademark shall be refused registrationon account of its nature unless it[c]onsists ofmatter which may disparage or falsely suggest a connection with persons, living or dead, institutions, beliefs, or national symbols, or bring them into contempt, or disrepute.

Factual background and procedural history: We last discussed the Tam case in depth in our June 2016 newsletter under Supreme Court Asked to Weigh-In on Disparaging Trademarks Issue. Briefly, the underlying case involved an individual named Simon Shiao Tam (Tam), an activist and the frontman for an Oregon-based rock band, who had been attempting to register the trademark The Slants (the bands proposed name) with the U.S. Patent and Trademark Office (PTO) since 2011. Tams stated reason in the trademark application for wanting to name his band The Slants was to reclaim and take ownership of Asian stereotypes. Citing Section 2(a) of the Lanham Act, the examiner refused to register the mark because he found it disparaging to people of Asian descent and felt that a substantial composite of Asians would find the mark offensive. The Trademark Trial and Appeal Board (TTAB) affirmed, and Tam appealed to the Federal Circuit.

The Federal Circuit also initially affirmed, but then sua sponte called for en banc review of the constitutionality issue. In December 2015, the en banc panel reversed, vacating and remanding the case back to the TTAB, holding that:

[t]he government cannot refuse to register disparaging marks because it disapproves of the expressive messages conveyed by the marks. It cannot refuse to register marks because it concludes that such marks will be disparaging to others. The government regulation at issue amounts to viewpoint discrimination, and under the strict scrutiny review appropriate for government regulation of message or viewpoint, we conclude that the disparagement proscription of 2(a) is unconstitutional.

The PTO filed a petition for writ of certiorari with the Supreme Court in April 2016, which agreed to consider the issue and heard oral argument on Jan. 18, 2017.

Supreme Court opinion: In a unanimous opinion written by Justice Samuel Alito, the Court affirmed the Federal Circuits ruling and held that the Section 2(a) disparagement clause violates the Free Speech Clause of the First Amendment because it offends a bedrock First Amendment principle: Speech may not be banned on the ground that it expresses ideas that offend.

In reaching this holding, the Court considered and rejected arguments raised by the PTO that would either eliminate any First Amendment protection or result in highly permissive rational-basis review.

The first of these arguments was the PTOs contention that trademarks are government speech, not private speech, and thus not subject to the restrictions that the First Amendment puts on private speech. The Court rejected this argument, stating that the PTO does not dream up the proposed trademarks, nor does it edit the ones that are submitted for registration. The PTO examiner only registers or, if a proposed trademark falls within one of the statutory exceptions, refuses to register the trademark, and it is thus far-fetched to suggest that the content of a registered mark is government speech. In addition, the Court said that the mere registration of a mark does not convert the mark into government speech (if it did, the Federal Government is babbling prodigiously and incoherently). Moreover, the Court said that [t]he PTO has made it clear that registration does not constitute approval of a mark. The Court concluded on this point that [h]olding that the registration of a trademark converts the mark into government speech would constitute a huge and dangerous extension of the government-speech doctrine and thus [t]rademarks are private, not government, speech.

The second argument put forth by the PTO was that trademarks are a form of government subsidy, pointing to Supreme Court precedent upholding the constitutionality of government programs that subsidized speech expressing a particular viewpoint. The Court rejected this argument as well, stating that it brought up a notoriously tricky question of constitutional law, but the Court had no difficulty distinguishing the cases cited by the PTO from the one before it.

The Court next considered and rejected the PTOs third argument that the constitutionality of the disparagement clause should be tested under a new government-program doctrine because the disparagement clause cannot be saved by analyzing it as a type of government program in which some content- and speaker-based restrictions are permitted.

Finally, the Court addressed the PTOs argument that trademarks are commercial speech and are thus subject to the relaxed scrutiny. The Court rejected this argument, stating that, even if that were the case, the disparagement clause could not withstand the relaxed scrutiny afforded commercial speech because it is not narrowly drawn nor does it serve a substantial interest. The Court concluded, If affixing the commercial label permits the suppression of any speech that may lead to political or social volatility, free speech would be endangered.

Justice Anthony Kennedy (joined by Justices Ruth Bader Ginsburg, Sonia Sotomayor and Elena Kagan) authored a separate concurrence in which he explained in greater detail why the First Amendments protections against viewpoint discrimination apply to the trademark here and render unnecessary any extended treatment of the other arguments raised by the parties:

A law that can be directed against speech found offensive to some portion of the public can be turned against minority and dissenting views to the detriment of all. The First Amendment does not entrust that power to the governments benevolence. Instead, our reliance must be on the substantial safeguards of free and open discussion in a democratic society.

All eyes presumably now turn to Pro-Football, Inc. v. Blackhorse, the long-running litigation involving the cancellation by the TTAB and lower court of the six REDSKINS marks in reliance on the disparagement clause, the latest iteration of which had been put on hold in the Fourth Circuit pending resolution of the Tam case by the Supreme Court. The owners of the REDSKINS marks have been claiming victory and are assuming that the Tam case ensures that the Fourth Circuit will reinstate their marks. We will keep an eye on this litigation and report back.

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Supreme Court: Trademark Disparagement Clause Violates First Amendment - Lexology (registration)