US Supreme Court abolishes ban on offensive trademarks

Listen to this article

The clause was ultimately found to violate First Amendment free-speech rights. The decision is already making itself felt. The disparagement clause became a topic of much media discussion in the past few years, especially after the federal government challenged as offensive the NFL Washington franchises’ “Redskins” moniker. But by June 29, 2017, in light of the Supreme Court’s decision in Tam, the Justice Department had officially halted its efforts to strip the “Redskins” name of federal trademark registration.

Background facts and lower court holding

The case stems from an Asian-American dance-rock band’s attempt to obtain federal trademark registration for the name “The Slants.” The USPTO assessed the band’s application and refused to register the mark under 15 U.S.C. § 1052(a), known as the disparagement clause. The clause provides that the USPTO may refuse to register a trademark on the principal register if the mark is found to “disparage” any “person, living or dead.” This provision has been found to apply to “non-juristic” persons such as racial or ethnic groups.

Although applicants denied federal registration can still use their mark, and enjoy some benefits and protections under federal and state law, they lose major benefits that come with being listed on the Principal Register—including the ability to obtain exclusives rights to use the mark in commerce, enjoy the presumption of exclusive and valid ownership in their mark, and prevent the importation of infringing goods. So although not necessary, the registration of federal trademarks is an extremely valuable asset.

The examiner who reviewed “The Slants” application applied a two-part test and found (1) that the mark was associated with an identifiable group (Asians) and (2) that the mark’s meaning “may be disparaging to a substantial composite” of persons of Asian ethnicity—a finding based in part on the definitions of the terms “slants” and “slant-eyes”. The burden then shifted to the band to show that the mark was not disparaging. The band’s lead singer, Simon Tam, tried to accomplish this by disclosing that he chose the mark not to offend Asian-Americans, but to repurpose an ethnic slur and rebrand it with a good meaning.

Tam lost this fight, unsuccessfully went through the Trademark Trial and Appeal Board appeals process, and eventually appealed to the Court of Appeals for the Federal Circuit. Sitting en banc, the Federal Circuit sided with Tam and his bandmates, finding that the disparagement clause was facially unconstitutional because it amounted to “view-point discrimination” that did not pass strict scrutiny; that is, the clause was not narrowly tailored to serve an important government interest.

The Supreme Court’s view

The government petitioned the Federal Circuit’s decision to the Supreme Court, which granted certiorari to answer a single question asking whether the disparagement clause in the Lanham Act “is facially invalid under the Free Speech Clause of the First Amendment.”

The court, in an 8-0 decision attributed to Justice Samuel Alito (joined in part by Chief Justice Roberts and Justices Thomas and Breyer), agreed with the federal circuit and held that the Lanham Act’s disparagement clause is facially unconstitutional because it violates the First Amendment. Alito reaffirmed the court’s longstanding position that the First Amendment protects even offensive viewpoints. He elaborated that:

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, in so holding, shot down all arguments the government raised to defend the disparagement clause. Specifically, the court ruled against the government’s claims that trademarks are (1) “government speech” exempt from First Amendment scrutiny; (2) a government “subsidy” subject to government control; and (3) “commercial speech” subject to a lesser standard of review.

The court included several noteworthy quotes in denying each of these arguments. In striking down the “government speech” theory, Alito recognized that if trademarks were considered government expression the federal government would be “babbling prodigiously and incoherently.” He illustrated his point by asking, “if trademarks represent government speech, what does the Government have in mind when it advises Americans to . . . ‘Just do it’ or ‘Have it your way?’” as Nike and Burger King suggest consumers do.

Justice Alito’s point is that just because the government issues trademark registrations, that does not mean it endorses the mark’s meaning or expression. It, therefore, has no real right to monitor a trademark’s general meaning, even if it offends the masses.

Alito also denied the government’s justifications for the clause. The government and its amici defended the USPTO’s ability to refuse registration for certain marks by highlighting the disparagement clause’s important purposes, including preventing underrepresented groups from being “bombarded with demeaning messages in commercial advertising” and protecting the flow of commerce from racist, sexist, or other discriminatory marks.

The court, though, dressed down these justifications and found they amounted to nothing more than the government’s belief that it has an unrestricted “interest in preventing speech expressing ideas that offend.” But Alito recognized that this belief contradicts longstanding First Amendment jurisprudence that “speech may not be banned on the ground that it expresses ideas that offend.” Viewpoints may be offensive, but the First Amendment protects the right to express offensive ideas, even in trademark form.

The court’s decision, again, has already had big ramifications, most noticeable in the government’s decision to throw in the towel on its challenge to the Washington Redskin’s trademark. Surely other pending litigation dealing with this issue will come to a close sooner than expected and the USPTO will likely see an increase in applications for -and registrations issued to – more colorful, offensive trademarks.