By Chanel Lattimer, of Cozen O’Connor
Shakespeare must not have been referring to trademarks, when he famously wrote “what’s in a name? That which we call a rose by any other name would smell as sweet.” In the world of trademarks, a name signifies more than a meaningless convention, but rather provides a valuable and potentially lucrative source indicator. In the case of the Washington Redskins, the team’s name and its federally registered trademarks encompass a brand worth over $131 million, and belong to the NFL’s 3rd most valuable organization, worth over $2.4 billion in 2014 with an 81-year history. Understandably, Dan Snyder, owner of the Washington Redskins, has no interest in changing his team’s name or mascot anytime soon; however, a twenty year protracted trademark battle may force his hand.
On June 18, 2014 the Trademark Trial and Appeal Board (TTAB) cancelled the NFL team’s six federally registered REDSKINS trademarks under Section 2(a) of the Lanham Act. Section 2(a) prevents the federal registration of a trademark that “[c]onsists of or comprises immoral, deceptive, or scandalous matter; or matter 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….”[1] The team appealed the decision to the Eastern District of Virginia, which this July affirmed the TTAB’s decision and upheld the constitutionality of Section 2(a) of the Lanham Act. Both wins mark victories for the opponents of the team’s name and mascot; but the limitations of trademark law and the cancellation procedures mean that the spoils of victory will not lead to the immediate or automatic change in the team’s name.
Results of the Decisions
At this point, the Washington Redskins organization has lost nothing as a result of the decisions. The trademarks remain on the United States Patent and Trademark Office’s (USPTO’s) federal register and will not face ultimate cancellation until the team has exhausted all of its appeals. The team wasted no time in filing a notice of appeal on August 8th against the district court’s decision and would likely take the case to the Supreme Court if allowed. In light of the Supreme Court’s recent B&B Hardware v. Hargis[2] decision, holding that TTAB findings can have preclusive effects on subsequent federal court decisions, the Fourth Circuit will likely not overturn the TTAB and district court’s holdings that the registrations constitute disparaging marks. Consequently, the team will need to rely on other grounds to appeal. Regardless, however, the appeals process means that it may take several more years before the final status of the trademarks is determined.
If and when the USPTO cancels the trademark registrations, the team will lose the host of benefits that come with federal trademark registrations. These benefits include, but are not limited to the ability to: use the ® symbol; bring actions in federal court on the basis of subject matter jurisdiction; seek certain forms of damages including treble damages; record the trademark with the U.S. Customs and Border Protection to prevent the importation of infringing or counterfeit goods. Additionally, a registration empowers the USPTO to quasi-enforce the trademark by citing it against subsequent applications for identical or confusingly similar marks. In spite of the loss of these valuable benefits, the Washington Redskins would still retain the most valuable benefit of all — the ability to use its trademarks. Under trademark law, use begets registration but not vice versa.
Use vs. Registration
Like other areas of intellectual property in the U.S., a trademark registration does not create a trademark. Creating a trademark only requires using the mark in commerce for a particular class of goods and services. Unless identical or confusingly similar to a trademark already in use in connection with related goods or services (i.e. trademark infringement), a trademark can last forever as long as it remains in use in commerce; a feature that makes it unique in comparison to copyrights and patents. Certain “common law rights,” or judicially created rights governed by state law, begin to vest in the trademark upon use. These rights, include the ability to: (i) use the ™ symbol to provide constructive notice to the public of the use of the mark as a trademark; (ii) bring claims against others for unfair competition, false advertising, and trademark or trade dress infringement; and (iii) challenge the federal application or registration of subsequent marks. Even without a federal registrations trademark owners can successfully use their trademarks and enforce their trademark rights.
Accordingly, some trademark owners may choose to never register their trademarks, whether for financial reasons, the planned short-term use of the mark, or the inability to meet the required standards for federal registration. In this case, if the Washington Redskins had not sought federal registration of its trademarks, and instead relied solely upon its common law rights, this case would not have materialized. Trademark laws bars federal registration of disparaging trademarks, but not their use.
Moreover, the fact that the opposers of the REDSKINS trademarks brought the proceeding through the Trademark Trial and Appeal Board (TTAB) also limited the available outcomes. The TTAB only has the ability to prevent a trademark application from registering or cancelling an already existing registration. In other word, the TTAB could strip Dan Snyder of his registrations, but could not force him to discontinue use of the team’s trademarks through injunctive relief.
Tempered Victory…for Now
In spite of the limitations of trademark law and the TTAB cancellation procedure, the proceedings and outcome still offered the opponents of the REDSKINS trademarks their best option for ultimately forcing the team to change its name. First, the opponents had no other viable criminal or civil causes of action to rely upon. Second, the TTAB proceeding presented the least expensive venue, while also providing the most knowledgeable judges of trademark law and the previous REDSKINS case.[3] Third, even if the opponents had chosen to take the case to federal district court seeking injunctive relief, an option as the federal courts have concurrent jurisdiction with the TTAB over issues relating to the registration and cancellation of trademarks[4], establishing irreparable harm and the other required factors against trademarks used media attention and financial sting to eventually force a name change.
Each NFL team owns its own trademarks, but enforcement of the marks fall within the jurisdiction of the NFL. Enforcing the unregistered REDSKINS marks could prove costly overtime. Without federal registrations the NFL cannot rely on the customs and border protection to stop the importation of counterfeit Redskins’ merchandise; a lucrative partnership that has prevented the sale of over $17.3 million worth of NFL counterfeit goods in 2013 and over $19.6 million in 2015.[5] Consequently, unscrupulous counterfeiters selling unauthorized merchandise outside of stadiums and online will likely increase, which will mean less sales of authentic merchandise, a revenue stream split equally among the 32 teams, apart from merchandise sold in the teams’ respective stadiums. Additionally, without the ability to easily bring federal cases and win significant awards through treble damages, thus offsetting outside attorney’s fees, the NFL may choose to litigate less cases.
On top of potential financial losses, the case has garnered significant media attention that has put the owner of the Washington Redskins and the NFL as a whole on the defensive at a time when the “Deflatgate” scandal and multiple instances of domestic abuse have slightly tarnished the NFL image. Recently, the Obama administration has publically encouraged the name change and has stated that the team will not be allowed to return to D.C. and play at RFK stadium until it does so. Moreover, at least 8 schools in the last 2 years in addition to 25 other school in the last 25 years, have dropped their Redskins mascots, and several states are advancing legislation to ban the use of Redskins and similar names. The backlash against Native American school names and mascots, and more recently those referring to and incorporating the confederate flag, demonstrates a shift in the political and cultural tide. Eventually, the seemingly innocuous result of the REDSKINS trademark cancellations may intensify to force Dan Snyder or the NFL to change the team’s name, but certainly not immediately.
Chanel Lattimer
Chanel Lattimer is an associate in Cozen O’Connor’s Intellectual Property Department, based in the firm’s Philadelphia office. Her practice focuses on trademark and copyright prosecution, litigation and enforcement, and intellectual property transactional matters in a variety of sectors, including entertainment, sports and fashion law. She can be reached at clattimer@cozen.com
[1] 15 USC 1052(a).
[2] B&B Hardware, Inc. v. Hargis Industries, Inc., 575 U. S. ____ (2015)
[3] Harjo v. Pro Football Inc., 30 USPQ2d 1828, 1832-33 (TTAB 1994)
[4] 15 U.S.C. § 1119.
[5] https://www.iprcenter.gov/ip-theft/case-studies and https://www.ice.gov/news/releases/federal-agencies-seize-more-195-million-fake-nfl-merchandise-during-operation-team.
