US High Court OKs Bigoted Trademarks 29/06/2017 by Steven Seidenberg for Intellectual Property Watch Leave a Comment Share this:Click to share on Twitter (Opens in new window)Click to share on LinkedIn (Opens in new window)Click to share on Facebook (Opens in new window)Click to email this to a friend (Opens in new window)Click to print (Opens in new window) Steven Seidenberg is a freelance reporter and attorney who has been covering intellectual property developments in the US for more than 20 years. He is based in the greater New York City area and may be reached at firstname.lastname@example.org. When the US Supreme Court issued its decision in Matal v. Tam, trademark applicants celebrated, hailing it as a victory for free speech and trademark rights. But some trademark owners will become very unhappy about the ramifications of the Court’s 19 June ruling. The case began when Simon Tam attempted to obtain a federal trademark registration on the name of his Asian-American rock band, The Slants. The US Patent and Trademark Office (USPTO) rejected the application, because “slants” is a derogatory term for East Asians, and Section 2(a) of the Lanham Act (America’s trademark statute) allows the USPTO to reject marks that “may disparage … persons, living or dead … or bring them into contempt, or disrepute.” The US Supreme Court overturned the USPTO’s decision. The newest Justice, Neil Gorsuch, did not participate in the ruling, but the remaining eight Justices unanimously held [pdf] that the anti-disparagement provision in Section 2(a) violated the free speech clause of the First Amendment to the US Constitution. The Court noted that the anti-disparagement provision withheld federal trademark registration from derogatory marks, but not from pleasant, affirming marks. That was unconstitutional “viewpoint discrimination” because, the Court declared, “[g]iving offense is a viewpoint.” The First Amendment prohibits the government from acting against some speech simply because the speech offends some – or many – people, the Court declared. Even bigoted speech is protected. “Speech that demeans on the basis of race, ethnicity, gender, religion, age, disability, or any other similar ground is hateful; but the proudest boast of our free speech jurisprudence is that we protect the freedom to express ‘the thought that we hate,’” the Court stated. In the wake of Matal, “opportunistic individuals and small companies of questionable morality” will file a plethora of applications for unsavory trademarks, said Lawrence R. Robins, a partner in the law firm of Sullivan & Worcester. He said, “Look out for an immediate influx of applications … not unlike the domain name registration gold rush of the mid-nineties.” First Amendment Absolutism The Matal ruling was a long time coming. The anti-disparagement provision of Section 2(a) had been a part of US trademark law for over 70 years – since the Lanham Act was passed in 1946. For most of that time, the provision’s constitutionality was taken for granted. Nevertheless, few legal experts were surprised when the Supreme Court threw out the anti-disparagement provision on First Amendment grounds. That’s because, in recent years, the Court has adopted a very expansive view of First Amendment rights. “Right now, we are living in age of First Amendment absolutism,” said Prof. Mark McKenna of Notre Dame Law School. “The Supreme Court is sweeping into the First Amendment lots and lots of things that weren’t previously considered part of First Amendment law, including parts of trademark law.” Most trademark experts believe the Supreme Court reached the correct result. “Tam was trying to take back this racial slur [slants] in the context of his band’s name. By denying his trademark registration, the federal government was denying him some rights he would otherwise be entitled to under the Lanham Act. What Tam was doing – that was the core of what the First Amendment is all about,” said J. Michael Keyes, a partner in the law firm of Dorsey & Whitney. Some experts, however, find the Court’s analysis to be flawed. “The Supreme Court dodged the fact that the statutory bar on disparaging marks doesn’t prohibit the use or enforcement of such marks under federal law; it just withholds federal trademark registration [which grants some additional protection to registered marks]. It doesn’t bar speech, it just withholds a government subsidy for speech,” said McKenna. As a result, he states, the ruling in Matal conflicts with earlier Supreme Court cases on government-supported speech. In those cases, the Court found the government could withhold its support from certain speech so long as this affected only the speaker’s rights under the relevant government program and did not restrict the speaker’s rights outside the program. This is a sensible standard, according to McKenna, who added that “the government ought not to be forced to subsidize speech that it deems will hurt the public interest.” Although McKenna’s view has relatively little support in the US, his position on disparaging marks has strong international support. The Paris Convention for the Protection of Intellectual Property allows its member nations to reject trademarks that are “contrary to morality or public order.” Using this standard, most industrialized nations – including Australia, the United Kingdom, the European Union, and all the Commonwealth nations – refuse to register disparaging marks. The EU, for instance, rejected a trademark application for “Paki Logistics,” because it contained a disparaging term for people of Pakistani descent. “Most other countries have a very similar prohibition to the [Lanham Act’s anti-disparagement] provision that was just struck down,” said McKenna. “We will be unusual in the Western world in not having that provision.” Knock-On Effects The Supreme Court attempted to limit the scope of its Matal ruling to just the Lanham Act’s anti-disparagement provision. Nevertheless, the case could have major legal ramifications. There will be effects on the state level, because all US states have their own trademark laws. Many of these state laws follow the Lanham Act and prohibit the registration of disparaging marks. Those statutory prohibitions will probably be held unconstitutional in the wake of Matal. On the federal level, Matal undermines a variety of statutory restrictions on registrable marks. Consider Section 2(a) of the Lanham Act, which prohibits registration of not just disparaging marks, but also marks that are “immoral … or scandalous.” These latter prohibitions were not directly addressed by Matal, but the decision’s reasoning strongly suggests these statutory restrictions are unconstitutional. Whether something is immoral or scandalous depends on one’s viewpoint, and the Supreme Court made it clear that it is unconstitutional for the USPTO to engage in viewpoint discrimination when registering marks. Lanham Act’s Section 2(b) is under a similar legal cloud. That provision forbids the federal registration of any mark that “[c]onsists of or comprises the flag or coat of arms or other insignia of the United States, or of any State or municipality, or of any foreign nation, or any simulation thereof.” The USPTO interprets this to prohibit any mark that contains a government insignia. This prohibition seems constitutionally suspect because trademark applicants could use these government symbols to express their viewpoints – perhaps patriotic, perhaps critical of the government (e.g., an upside down or burning flag). Such expressive marks seem protected under Matal. “Taking Matal to its logical conclusion, I think there is a strong argument that this provision is unconstitutional,” said Keyes. Lanham Act Section 2(c) could also be unconstitutional. That provision forbids the federal registration of any mark that includes “a name, portrait, or signature identifying a particular living individual except by his written consent, or the name, signature, or portrait of a deceased President of the United States during the life of his widow, if any, except by the written consent of the widow.” On its face, this seems to run afoul of Matal, since it prevents trademark applicants from registering marks that express viewpoints on living people (and some deceased presidents). It forbids, for instance, an applicant from registering a mark consisting of a goofy photo of Donald Trump above the name Hair Fuhrer. Not Dead Yet It is far from certain that all these provisions of the Lanham Act will be struck down. The Supreme Court did not, in Matal, flatly forbid possible viewpoint discrimination when it comes to trademark registrations. The Court held merely that in order to engage in viewpoint discrimination, the government must show at least that the discrimination is “narrowly drawn” and serves “a substantial [government] interest.” (The government might actually need to meet a tougher standard – showing that the discrimination is narrowly tailored to further a “compelling governmental interest.” The Court in Matal declined to decide which test is required to limit trademark applications.) The Matal Court found the government had no substantial interest in forbidding the registration of disparaging marks per se. The government might have a substantial interest in prohibiting some bigoted marks – because such marks interfere with commerce – but this did not justify a prohibition on all types of disparaging marks. The prohibition was overly broad and thus unconstitutional, the Court held. The Supreme Court could find that some statutory restrictions on trademark registration are narrowly tailored to serve a substantial government interest. The prohibitions of Sections 2(b) and (c), for instance, could arguably prevent consumers from being misled into thinking that some product was produced or endorsed by a government or living person. But the statutes do not seem narrowly tailored to serve this purpose. They forbid marks that are critical of a government or living person, although few would think the entity being criticized has endorsed these marks. In short: expect legal challenges to various provisions in Section 2 of the Lanham Act. These statutes are now in peril, but some or all of them might somehow find a way to pass constitutional muster. Diluting Trademark Protection Matal will benefit trademark applicants, perhaps in myriad ways. But the decision also seems likely to strip an important legal protection from owners of famous trademarks. US trademark law protects famous marks against two types of dilution: blurring and tarnishment. Blurring occurs when a famous mark’s distinctiveness is impaired because someone else is using the same or similar mark on any type of goods (e.g., Exxon toothpaste). Tarnishment occurs when a famous mark’s reputation is harmed because someone else is using the same or similar mark on inferior goods or in an unsavory manner (e.g., Toyota sex dolls). The legal protection against tarnishment may be unconstitutional in the wake of Matal. “Saying you can’t use a trademark in a way that harms the reputation of the mark, I think that has to be viewpoint discrimination. It prevents you from saying something negative about the mark or the mark’s owner,” says McKenna. Matal’s reach thus goes far beyond disparaging marks. The case answered one issue of trademark law, but posed many new questions. These are likely to keep US courts busy for quite a while. Image Credits: Davis Staedtler Share this:Click to share on Twitter (Opens in new window)Click to share on LinkedIn (Opens in new window)Click to share on Facebook (Opens in new window)Click to email this to a friend (Opens in new window)Click to print (Opens in new window) Related Steven Seidenberg may be reached at email@example.com."US High Court OKs Bigoted Trademarks" by Intellectual Property Watch is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.