On June 19, 2017, the U.S. Supreme Court handed down its much-anticipated decision in Matal v. Tam, 582 U.S. __ (2017), issuing a ruling that clarifies that the door is open to trademark registration to a new category of trademarks: trademarks that may disparage others.
The facts that the Court looked at are relatively simple: The Slants, a dance-rock band whose members are Asian-Americans, sought to register their name as a trademark. Although the band argued that they chose the name because they were looking to “reclaim” and “take ownership” of stereotypes about people of Asian ethnicity, the U.S. Patent and Trademark Office (USPTO) refused to register the mark THE SLANTS on the ground that it was a derogatory or offensive term. An appeal to the USPTO’s Trademark Trial and Appeal Board failed on similar grounds. But a further appeal to the U.S. Court of Appeals for the Federal Circuit resulted in this case finding itself before the U.S. Supreme Court: the majority of the Federal Circuit, sitting en banc, found that the USPTO’s basis to refuse to register THE SLANTS was unconstitutional.
The legal background for the appeal is also straightforward. While, as the Court notes, commercial actors have been able to use trademarks that cannot be registered; the difference here relates to the substantial benefits that trademark registration provides. However, contrary to the understanding of many, not every trademark can be registered on the Principal Register, and Section 2 of the Lanham Act provides several bases for denial. These bases include descriptiveness, that the trademark is primarily merely a surname, and that the trademark is confusingly similar to another trademark already in the registry, among others. At issue in Matal v. Tam (previously known as In re Tam) is Section 2(a) of the Lanham Act, which provides in part that a trademark may be refused registration if it “[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 . . . .” 15 U.S.C. § 1052(a).
The USPTO denied The Slants a registration based on the portion of Section 2(a) that prohibited the registration of trademarks that may “disparage . . . or bring . . . into contemp[t] or disrepute” any “persons, living or dead.” The Supreme Court took the case to decide whether this clause was facially invalid under the Free Speech Clause of the First Amendment. In reviewing the issue, the Supreme Court found that this provision of Section 2(a) (what the Court called the “disparagement clause”) does violate the Free Speech Clause of the First Amendment. In delivering the opinion of the Court, Justice Alito wrote: “It offends a bedrock First Amendment principle: Speech may not be banned on the ground that it expresses ideas that offend.”
After reviewing several arguments from the government, which was the petitioner in the case, the Court concluded that the disparagement clause did not meet the test that the restriction serves “a substantial interest,” and must be “narrowly drawn.” The bases that the government provided—preventing speech expressing ideas that offend, and protecting the orderly flow of commerce which might be disrupted by disparagement—were too close to the heart of the First Amendment or were overly broad. In the Court’s words: “It is not an anti-discrimination clause; it is a happy-talk clause.”
The Court’s decision puts to rest The Slants’ struggle to register their own name, and for those challenging the rights in the Washington Redskins trademarks, the Court’s decision extinguishes the challengers’ principal argument. The Court’s decision also confirms (using quite humorous examples) that the issuance of a trademark registration is not government speech, but private speech. (Interestingly, the Court also commented in passing that copyright registration also is private, not government, speech.)
For trademark practitioners, the immediate question is whether Tam can be stretched beyond the specific clause that the Court addressed. The limitations in Section 2 of the Lanham Act expressly refer to refusals of registration of a trademark “on account of its nature,” which language brings to mind the possibility of content-based restrictions. Taken broadly, and despite the Court’s explanations that its holding—and its methods for reaching that holding—are limited, Tam could certainly open the door to new challenges to other portions of the Lanham Act. Section 2(d) appears safe for the moment, as Justice Kennedy’s concurrence expressly notes that the law can protect against trademarks that confuse or mislead the public. However, to the extent that any provisions of Section 2 turn on the content of the speech itself, such as whether the mark is “immoral” or “scandalous,” those provisions may be vulnerable to attack.
Whether the ruling triggers a rush to register words that members of the public deem to be racial slurs will remain to be seen. Certainly, several groups may already be planning post Tam trademark applications, either to block the use of offensive marks by others, or to test the boundaries of public opinion (and good taste). But while registration provides powerful presumptions and benefits, most trademark applications filed in the United States cannot mature into registrations unless there has been a showing of use of the trademark as a trademark in interstate commerce. Therefore, unless there is somehow a new demand for products and services sold under brand names that are likely to disparage others, a flood of newly issued registrations of disparaging marks is unlikely.