By Mark Conrad
While the use of racially and ethnically insensitive language, even in a context of hate, is generally protected under the First Amendment,[1] a longstanding exception exists under the Lanham Act, the federal legislation regulating trademarks. Section 2(a) of the Act explicitly prohibits the registration of trademarks that contain language that a “substantial composite of the referenced group” perceives as disparaging a religion, nation, ethnic group, or belief system.[2] This provision has become the focal point of a dispute that may have a significant effect on the right of sports teams to seek or maintain trademark protection for names that could be considered offensive or disparaging to Native Americans. While many collegiate teams have changed such names and logos, in part due to public pressure and NCAA policies,[3] there are professional sports teams which remain committed to retaining such brand names and designs.
Protected trademark status gives the holder significant legal advantages. Registration gives the holder property exclusive rights to use the mark “in commerce” and the ability to take action against infringers of that mark by others, either through product confusion or by dilution of the reputation of the mark.[4] However, the law creates a specific exemption for marks that disparage individuals or groups under sec. 2(a).
Lee v. Tam[5] challenges that prohibition. Although the dispute does not involve a sports-related entity, the Supreme Court’s upcoming ruling could result in legal relief for the trademark owners of controversial team names like the Washington Redskins or the Cleveland Indians. It could also permit or invigorate trademark protection of more such potentially offensive terms. However, if the court upholds sec. 2(a)’s ban on disparaging marks, it could encourage more attempts to eliminate trademark protection of such insensitive or offensive team names, thereby limiting brand protection.
Lanham Act sec. 2(a)
Section 2(a) denies trademark protection to any mark that “consists 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.”[6] The provision has two distinct segments and it is the constitutionality of second portion of this statute, known as the “disparagement clause” that is being considered by the high court.[7] This paper will only focus on that segment of the statute.
There are several public policy reasons for the sec. 2(a) restrictions. One is that the government should not “favor or approve” the use of such materials and should not “squander” its resources on the protection of such marks. In addition, “there is a state interest to protect the sensitivities of those who may be offended by such marks,”[8] thereby discouraging the use of terms that, for example, could be offensive to the majority of people in certain groups.[9]
The scope and definition of the terms such as “scandalous” or “disparaging” are not found in sec. 2(a) or its predecessor statute, or in the legislative history of the Lanham Act, resulting in considerable discretion by the USPTO and the courts to come up with appropriate standards.[10] The USPTO has denied a number of registrations on the basis that they carry words or messages that disparage a religion, nation, or ethnic group.[11] Court determinations involving section 2(a) have not been many and until recently, cases have not involved a constitutional challenge.
The Tam Litigation
A rock band composed of Asian-American performers, led by Simon Tam, sought registration for “The Slants.” The request was rejected by the trademark examiner on the ground that applicant’s use of the term may disparage or bring into contempt or disrepute persons, institutions, beliefs or national symbols under . . . Section 2(a).”[12] On appeal, the Trademark Trial and Appeal Board (“TTAB”) affirmed. In the ruling, the Board applied a two-part test to determine “disparagement”: (1) what is the likely meaning of the matter in question, taking into account not only dictionary definitions, but also the relationship of the matter to the other elements in the mark, the nature of the goods or services, and the manner in which the mark is used in the marketplace in connection with the goods or services; and (2) if that meaning is found to refer to identifiable persons, institutions, beliefs or national symbols, whether that meaning may be disparaging to a substantial composite of the referenced group.[13]
The TTAB panel concluded that both parts were satisfied. In so doing, it noted that various dictionary definitions prove that “slant” is a derogatory term for Asians and looked at the prevailing view of various civil rights organizations which viewed the term as a racist reference that based on the epicanthic fold, or flap, over the eyes of some Asian peoples, giving the eyes a slanted look.[14] It rejected the argument that the term was used as a term of empowerment by the musicians, but rather, noted that the public perception of the meaning of “THE SLANTS,” as used in connection with applicant’s services, shows that meaning to be a derogatory reference to people of Asian descent.”[15]
The group appealed to the Federal Court of Appeals, which affirmed the USPTO ruling.[16] The appeals panel reiterated the view of the Board that despite the fact that “Slants” may have innocuous meanings, it is clear that a large number of people would consider the term disparaging to Asians, adopting the approach taken by the Board. The panel then addressed the group’s constitutional challenge that sec. 2(a) served as an unwarranted restriction on Tam’s First Amendment rights. Citing past precedent, the panel concluded failure to register a mark considered disparaging was not a restriction on speech rights because it does not limit the right of the group to use the term “Slants.”[17] It also summarily denied claims that the provision was “vague” and the standards employed for determining disparaging marks lacked due process. The court rejected the notion that the PTO applied the disparagement standard arbitrarily.
What makes the ruling significant are the “additional views” of one of the judges, who argued that it was time to reconsider the constitutionality of sec. 2(a).[18] Noting that In re McGinley, the leading precedent, should be reexamined in light of the passage of time and the “wide criticism” of that ruling, Judge Moore noted the enhanced constitutionalization of commercial speech doctrine could mean that sec. 2(a)’s ban on trademarks that disparage may be on constitutional thin ice. Noting that commercial speech is undoubtedly protected speech under the First Amendment since 1976, [19] Judge Moore observed that the band’s adoption of “Slants” was more than a brand identifier — it takes on a cultural and political avocation, as the group selected the name to “reclaim” and “take ownership” of Asian stereotypes.[20]
Trademark registration, according to the judge, is more than just an administrative process. Disagreeing with McGinley, Judge Moore opined that important rights of exclusive use and enforcement against infringers are limited, resulting in a “severe burden” on the use of such marks and a chilling effect on speech.[21]
Judge Moore addressed the constitutionality of sec. 2(a) and the interplay of commercial speech doctrine. Clearly, the anti-disparagement provision singles out particular speech by its content — and discriminates against speech that has disparaging and offensive viewpoints. Under a strict scrutiny standard, it would be hands-down unconstitutional. However, since it can be argued that trademarks are commercial speech, the standard of review is relaxed. Courts have utilized a form of intermediate scrutiny under the so-called Central Hudson standard.[22] Instead of strict scrutiny, commercial speech regulation employs a multi-part test. First, commercial speech “must concern lawful activity and not be misleading.” If this is the case, the inquiry becomes whether (1) “the asserted governmental interest is substantial,” (2) “the regulation directly advances the governmental interest asserted,” and (3) the regulation “is not more extensive than is necessary to serve that interest.”[23] Judge Moore concluded that sec. 2(a) did not pass this standard since the government’s interest in discouraging the use of disparaging marks that may be offensive to persons, institutions, beliefs, or national symbols, was not substantial enough to justify the ban.[24]
The En Banc Ruling
Judge Moore’s role in this case did not end with this opinion, as the full panel of the circuit reconsidered the case and issued an en banc ruling penned by the same judge.[25] In her 9-3 majority ruling, she opined that sec. 2(a) is unconstitutional as it condones discrimination based on the views of the speech. Reiterating her earlier opinion, and now writing for the court, she further concluded that the section failed under either strict scrutiny review appropriate for government regulation of message or viewpoint, or even intermediate scrutiny, since no legitimate interest justifying the prohibition was made by the government.
Her majority opinion stated that the “viewpoint discrimination” of the disparagement ban deserved strict scrutiny analysis. However, the court, sensitive to the fact that commercial speech occupies a less exalted First Amendment position, took pains to note that the ban did not involve a commercial rationale. In fact, the court crossed a line in determining that a trademark (which is, after all, a commercial branding device) may often have a more expressive aspect over and above its commercial-speech branding. Mr. Tam explicitly selected his mark as a hybrid between non-commercial and commercial speech to create a dialogue on controversial political and social issues. “With his band name, Mr. Tam makes a statement about racial and ethnic identity. . . He advocates for social change and challenges perceptions of people of Asian descent. His band name pushes people. It offends. Despite this—indeed, because of it—Mr. Tam’s band name is expressive speech.”[26]
Therefore, sec. 2(a) results in classic viewpoint discrimination based on the nature of the expressive conduct. One who wishes to register a potentially disparaging trademark that may make a political or societal commentary may be “chilled” from doing so — a policy that is practically fatal in a constitutional analysis. In so concluding, the court rejected the claim that sec. 2(a) constituted “government speech” which is insulated from any First Amendment review.[27]
The case produced several additional opinions, most of which affirmed the unconstitutionality of the disparagement portion of sec. 2(a) as applied against Tam, but differed notably as to the validity of sec. 2(a) as commercial speech. Some of the key points center on the scope of the relationship between trademarks and commercial speech because commercial speech does not occupy the same level of governmental scrutiny as political speech.[28] While the majority concluded that sec. 2(a) fails even if considered commercial speech because of its political elements, four judges disagreed in some degree in their concurrences and dissents. Because of the doctrinal differences in the constitutional theory and the disagreements among the judges, the Supreme Court granted certiorari to decide whether the disparagement provision is facially unconstitutional.
As noted in the beginning of the article, the stakes for sports teams like the Washington Redskins are large. This stems in part to longstanding public pressure to change their name (as have many college teams over the last two decades), but also to a recent court ruling that conflicts with Tam. The Supreme Court’s resolution in Tam will likely settle the Redskins’ trademark challenge.
The Redskins’ trademark challenge in Pro Football Inc. v. Blackhorse,[29] considered a similar constitutional challenge to sec. 2(a), but the federal district court made an opposite determination from that of the en banc majority in Tam. The Blackhorse court canceled the six trademarks owned by the team, concluding that the disparagement prohibition does not infringe upon the mark owner’s First Amendment rights because “[no] conduct is proscribed[] and no tangible form of expression is suppressed,” and even if it did, such an infringement would be “government speech” that is exempted from First Amendment application.[30] In so deciding, the court adopted precedent in similar cases in the Fifth and Federal Circuits (the latter all but reversed by that same circuit in Tam).[31]
The Blackhorse court took a more traditional administrative law approach, treating trademark approval under the Lanham Act as discretionary decisionmaking by the USPTO and not as an action that suppresses speech. Notably, it also rejected the idea that trademarks constitute protectable commercial speech.[32] Upon disposing of the constitutional question in summary judgment, the court then applied sec. 2(a) and concluded based on dictionary evidence; literary, scholarly, and media references; and statements of Native American individuals and groups that the Redskins Marks consisted of matter that “may disparage” a substantial composite of Native Americans.[33] The case was appealed to the Fourth Circuit, but in deference to the Supreme Court consideration of Tam, it has not heard arguments.
The Supreme Court Options and the Effect on Disparaging Trademarks
During oral arguments, many of the justices appeared skeptical of the government’s view that sec 2(a) was immune from First Amendment scrutiny under the “government speech” doctrine. Government speech is a relatively recent doctrine that permits the government to express viewpoints in its own speech, without triggering claims of viewpoint discrimination.[34] This is a confusing contradiction of a doctrine. On the one hand, the government cannot restrict certain individual speech on this basis, but can allow this same speech if done by the government.
Counsel for Tam argued that governmental speech immunity should apply to sec. 2(a), but a number of justices were skeptical as to whether a statutory policy of denying trademarks due to offensiveness or disparagement is the kind of speech considered under this (vague) concept. Other questions focused as to whether the speech is ultimately commercial or not or whether it is ancillary to the central idea of trademark as brand identification. While questions at oral argument do not necessarily indicate a decision one way or the other, it is safe to that the sec. 2(a) may be on somewhat thin ice.
The high court could rule in one of several ways. The most sweeping result would be an affirmance of the en banc panel’s majority opinion, concluding that the disparagement portion of sec. 2(a) is unconstitutional on its face either based on strict scrutiny or under the commercial speech’s Central Hudson test. In so ruling, the court would reject the governmental activity defense, thereby overruling at least three decades of judicial precedent.[35] Or, it may not go as far, concluding that sec. 2(a) is not a violation of free speech rights if applied to “purely commercial’ marks (those exclusively used in commerce), but unconstitutional if the trademark application has a political or social commentary. A victory for Tam, but one where sec. 2(a) remains intact, albeit more limited in scope. Alternatively, the court could affirm the approach taken in Blackhorse, by jettisoning a First Amendment argument and relying on a literal reading of the Lanham Act and its goal to create an administrative mechanism to regulate trademarks. This would be more in keeping with established precedent, coupled with a more traditional regulatory approach based on the theory that a trademark is more a form of government subsidy than a potentially discriminatory determination of what speech is disparaging to groups and what speech is not.
This writer’s view is that the court will more likely limit or eliminate that portion of the statute. Over the last three decades the court’s views on freedom of speech protection in the business context has increased and the Central Hudson standard has become more protective of speech. In addition, a growing chorus of scholars have advocated treating commercial speech on the same constitutional plane as political or artistic speech.[36]
The Stakes for Sports Teams
If the court were to nullify the disparagement provision of sec. 2(a), the stakes for professional and collegiate sports marks would be significant. It would end the present litigation involving the Redskins’ marks. It would make challenges to other such marks more difficult. The result would be that those marks would be protected in the court of law (though not necessarily in the court of public opinion). It would therefore remove a potent remedy for those wishing to pressure other teams to change their names and marks (which also include symbols like “Chief Wahoo” of the Cleveland Indians).
If the court reverses the en banc ruling, and the Redskins’ or Indians’ marks are canceled, the key concern is the potential loss of millions of dollars in merchandise and licensing fees. Without trademark protection, counterfeiters could produce unauthorized items and sell them without fear of trademark enforcement by their respective owners. While common-law trademark rights may still exist, such status lacks the remedies resulting from federal registration and would result in increased legal costs in pursing remedies against infringers. The result can also impact the leagues, which license their merchandise and share in the revenues derived from sales. In what could be a bad omen, sales of Redskins’ merchandise dropped by 43 percent in 2014 (when the USPTO canceled its registration of six Redskins’ marks and before the Federal District Court overturned that ban) over sales the year before.[37]
Although there has been pressure to change the Washington team’s name, owner Daniel Snyder has adamantly refused. While public pressure can still ultimately force his hand, a Supreme Court affirmance of the en banc ruling would weaken the options of those advocates since they no longer could use sec. 2(a) to help achieve that goal.
However, if the disparagement portion of sec 2(a) is ruled unconstitutional, there remain avenues for those who feel aggrieved by a disparaging or offensive trademark. The USPTO’s Trademark Manual of Examining Procedure, permits challenges to trademark applications by “natural or juridic person[s]” who believe they are damaged by the registration of that mark.[38] Those grounds may include marks that are “deceptive,” “misdescriptive,” or “bringing an individual into disrepute.”[39] Additionally, challenges can be made for marks for “likelihood of confusion, deception or mistake.” For example, say that the Redskins image can be claimed as a “noble” one. A party could argue that such a justification can be false, deceptive or even fraudulent, given the general disdain for the term. Certainly, the elimination of the sec. 2(a) disparagement provision would make things more difficult, but the possibility of challenges based on non-core speech issues, such as those above, may give challengers some solace. But we will have to wait and see how the Supreme Court rules to determine if challengers to disparaging marks will have to utilize these alternate approaches.
References:
Baird, Stephen R., Moral Intervention in the Trademark Arena: Banning the Registration of Scandalous and Immoral Marks, 83 Trademark Reports 661, 674-75 (1993)
Beebe, Barton, An Empirical Study of the Multifactor Tests for Trademark Infringement, 94 Calf. L. Rev. 1581 (2006).
Carpenter, Megan M. and Murphy, Karen T., Calling Bullshit on the Lanham Act: The 2 (a) Bar for Immoral, Scandalous, and Disparaging Marks, 49 U. of Louisville L. Rev. 365, 458 (2007)
Central Hudson Gas & Electric Corp. v. Public Service Commission, 447 U.S. 557 (1980).
Farber, Daniel, Commercial Speech and First Amendment Theory, 74 N.W.U. L. Rev. 372 (1979).
In re Lebanese Arak Corp, 94 USPQ2d 1215, 1217 (TTAB 2010)
In re McGinley 660 F.2d 481 (C.C.P.A. 1981)
In re Simon Shiao Tam, Serial No. 85472044 (Sept. 26, 2013)
In re Tam, 785 F.3d 567 (Fed. Cir., 2015).
In re Tam, 808 F. 3d 1321 (Fed Cir. 2015)
Isidore, Chris, Redskins Gear Stiff-Armed by Fans. CNNMoney.com (Sept. 4, 2014), http://money.cnn.com/2014/09/04/news/companies/redskins-merchandise/
Lanham Act, 15 USC sec. 1052(a)
Lee v. Tam, 15-1293 (cert. granted Sept. 29, 2016)
Lorillard Tobacco v. Riley, 533 U.S. 525 (2001)
MacMillan Dictionary, Offensive words for people according to nationality or ethnicity, http://www.macmillandictionary.com/us/thesaurus-category/american/offensive-words-for-people-according-to-nationality-or-ethnicity
NCAA bans Indian mascots during postseason USA Today (Aug. 8, 2006), http://usatoday30.usatoday.com/sports/college/2005-08-05-indian-mascots-ruling_x.htm
Pro Football, Inc. v. Blackhorse, 112 F. Supp. 3rd 449 (E.D. Va, 2015)
R.A.V v. City of St. Paul, 505 U.S. 377 (1992)
Rubin v. Coors Brewing Co. 514 U.S. 476 (1995)
Test Masters Educ. Servs. v. Singh, 428 F.3d 559, 578 n.9 (5th Cir. 2005)
Trademark Manual of Examining Procedure, sec. 1203.02 (2016)
Trademark Trial and Appeal Board Manual of Procedure, sec. 303.02 (2016)
Virginia State Pharmacy Board v. Virginia Citizens Consumer Council, 425 U.S. 748 (1976)
Volokh, Eugene, Supreme Court will hear ‘Slants’ trademark case, which is directly relevant to the Redskins controversy. The Washington Post (Sept. 29, 2016), https://www.washingtonpost.com/news/volokh-conspiracy/wp/2016/09/29/supreme-court-will-hear-slants-trademark-case-which-is-directly-relevant-to-the-redskins-controversy/?utm_term=.4fad0ab483d8
[1] See R.A.V v. City of St. Paul, 505 U.S. 377 (1992) (ruling an anti-bias ordinance unconstitutional and reversing a conviction for cross-burning).
[2] See 15 USC sec. 1052(a), discussed infra.
[3] See NCAA bans Indian mascots during postseason (Aug. 8, 2006), http://usatoday30.usatoday.com/sports/college/2005-08-05-indian-mascots-ruling_x.htm
[4] Although the standards vary among the federal circuits, all of the standards have four key factors: the similarity of the marks, the proximity of the goods, evidence of actual confusion, and the strength of the plaintiff’s mark. See Barton Beebe, An Empirical Study of the Multifactor Tests for Trademark Infringement, 94 Calf. L. Rev. 1581 (2006).
[5] 15-1293 (cert. granted Sept. 29, 2016).
[6] 15 USC sec 1052(a).
[7] The first section, involving the ban in “immoral or scandalous matter” may be subject to constitutional challenge; but the court agreed to hear arguments on the disparagement clause.
[8] See Stephen R. Baird, Moral Intervention in the Trademark Arena: Banning the Registration of Scandalous and Immoral Marks, 83 TRADEMARK REP. 661, 674-75 (1993), as cited in Megan M. Carpenter and Kathryn T. Murphy, Calling Bullshit on the Lanham Act: The 2 (a) Bar for Immoral, Scandalous, and Disparaging Marks, 49 U. of Louisville L. Rev. 365, 458 (2007). See also In re McGinley, 660 F. 2d 481, 486 (CCPA, 1981) (court affirmed a decision to register a mark that involved a nude man and woman embracing and apparently exposing male genitalia.
[9] Examples would include the term “nigger” (offensive to African-Americans), “Spic” (offensive to Hispanics), “Kikes” or “Yids” (offensive to Jews), “wops” (offensive to Italians or Italian-Americans), “Mics” (offensive to Irish or Irish-Americans), “Pollacks” (offensive to people from Poland or Polish-Americans), “Chinks” (offensive to Chinese or Chinese-Americans), “Japs” (offensive to Japanese or Japanese-Americans) and “Redskins” (offensive to Native Americans). For more, see MacMillan Dictionary, Offensive words for people according to nationality or ethnicity, http://www.macmillandictionary.com/us/thesaurus-category/american/offensive-words-for-people-according-to-nationality-or-ethnicity
[10] See, Refusal on Basis of Immoral or Scandalous Matter; Deceptive Matter; Matter which May Disparage, Falsely Suggest a Connection, or Bring into Contempt or Disrepute, Trademark Manual of Examining Procedure (Oct. 2016).
[11] For example, it has canceled registration for the (Washington) Redskins, and for such marks as “Stop the Islamization of America, The Christian Prostitute, Amishhomo, Mormon Whiskey, Heeb, Marriage is for Fags. See Eugene Volokh, Supreme Court will hear ‘Slants’ trademark case, which is directly relevant to the Redskins controversy. The Washington Post (Sept. 29, 2016), https://www.washingtonpost.com/news/volokh-conspiracy/wp/2016/09/29/supreme-court-will-hear-slants-trademark-case-which-is-directly-relevant-to-the-redskins-controversy/?utm_term=.4fad0ab483d8
[12] See In re Simon Shiao Tam, Serial No. 85472044 (Sept. 26, 2013) p. 2
[13] Id. at 8, citing In re Lebanese Arak Corp, 94 USPQ2d 1215, 1217 (TTAB 2010).
[14] Id. at pp. 3-4
[15] Id. at 12.
[16] See In re Tam, 785 F.3d 567 (Fed. Cir., 2015).
[17] See In re McGinley, supra, 660 F.2d 481 (C.C.P.A. 1981) (“The PTO’s refusal to register appellant’s mark does not affect his right to use it. No conduct is proscribed, and no tangible form of expression is suppressed. Consequently, appellant’s First Amendment rights would not be abridged by the refusal to register his mark.”).
[18] See In re Tam, at 573 (Moore, J.).
[19] See Virginia State Pharmacy Board v. Virginia Citizens Consumer Council, 425 U.S. 748 (1976)
[20] See In re Tam at 575.
[21] Id. at 577.
[22] The standard derives from Central Hudson Gas & Electric Corp. v. Public Service Commission, 447 U.S. 557 (1980).
[23] Id. at 566.
[24] In re Tam, at 585.
[25] See In re Tam, 808 F. 3d 1321 (Fed Cir. 2015).
[26] Id. at 1338.
[27] Id. at 1345.
[28] See Daniel Farber, Commercial Speech and First Amendment Theory, 74 N.W.U. L. Rev. 372 (1979).
[29] 112 F. Supp. 3rd 449 (E.D. Va, 2015).
[30] Id. at 455
[31] See Test Masters Educ. Servs. v. Singh, 428 F.3d 559, 578 n.9 (5th Cir. 2005); In re McGinley, 660 F.2d 481, 484 (C.C.P.A. 1981).
[32] See Blackhorse, 112 F. Supp. 3d at 455.
[33] See McGinley, at 489.
[34] See Joseph Blochner, Viewpoint Neutrality and Government Speech, 62 Boston Col. L. Rev. 696 (2011).
[35] See note 32, supra.
[36] See, Rubin v. Coors Brewing Co. 514 U.S. 476 (1995); Lorillard Tobacco v. Riley, 533 U.S. 525 (2001). Justice Thomas, in particular, has stated his preference for the elimination of Central Hudson. See Lorillard, 533 U.S. at 570 (Thomas, J., concurring)
[37] See, Chris Isidore, Redskins Gear Stiff-Armed by Fans. CNNMoney.com (Sept. 4, 2014), http://money.cnn.com/2014/09/04/news/companies/redskins-merchandise/
[38] “Persons” include a “firm, corporation, union, association, or other organization capable of suing and being sued in a court of law.” See Trademark Trial and Appeal Board Manual of Procedure, sec. 303.02 (2016).
[39] See Trademark Manual of Examining Procedure, sec. 1203.02.
