July 30, 2017

In Landmark Decision, the Supreme Court Strikes Down Key Provision of the Lanham Act that Prohibits Registration of Disparaging Trademarks

On Monday, June 19, 2017, the U.S. Supreme Court in Matal v. Tam, 582 U.S._ (2017), unanimously struck down the disparagement clause of the Lanham Act, 15 U.S.C.A. § 1052(a), on grounds that it violates the Free Speech Clause of the First Amendment.   The disparagement clause – in force for over 70 years – is found in section 2(a) of the Act and prohibits the registration of trademarks that “may disparage . . . persons, living or dead, institutions, beliefs, or national symbols, or bring them into contempt, or disrepute.”  15 U.S.C.A. § 1052(a).  Justice Alito, writing for the Court, opined that the provision “offends a bedrock First Amendment principle: Speech may not be banned on the ground that it expresses ideas that offend.”

The disparagement clause has been the subject of much debate since 2014 when the Patent and Trademark Office (PTO) cited  the clause in revoking six federal trademark registrations belonging to the Washington Redskins, a result which was affirmed by a district court in Virginia.  The Supreme Court’s holding in Tam is no doubt music to the ears of Redskins’ owner Dan Snyder, whose appeal of the district court’s ruling is currently pending before the U.S. Court of Appeals for the Fourth Circuit.  Given the Supreme Court’s invalidation of Section 2(a), a victory for the Redskins in the Fourth Circuit appears all but guaranteed.

Of course, the ruling is also a victory for the trademark applicant in Tam – the front-man of the Asian-American band THE SLANTS – whose application to trademark the band name was rejected by the PTO pursuant to section 2(a).  Although the band sought to “reclaim the stereotype [of Asians having slanted eyes] and take ownership of the term,” the Trademark and Trial Appeal Board affirmed the PTO Examiner’s finding that the name “THE SLANTS” is disparaging to people of Asian descent.

In its petition, the Government argued that trademarks are “government speech” and thus outside the purview of the Free Speech Clause of the First Amendment.  The Court disagreed, noting that the Government “does not dream up these marks, and it does not edit marks submitted for registration.”  Justice Alito mused that the Government is hardly advancing a particular message or viewpoint in registering marks and, if it is, “the federal government is babbling prodigiously and incoherently.”  The PTO has made clear that registration of a mark does not constitute approval of it.  And unlike, for example, advertisements promoting beef products, license plates, or landmarks in public parks, trademarks have never been traditionally used to convey a government message.

The Court also rejected the argument that the Government is permitted to regulate speech in connection with offering benefits under government programs.  The Government argued that it is not required to subsidize activities it does not wish to promote.  But the Court drew a key distinction between cases in which the Government actually pays cash subsidies or their equivalent to promote certain activities (e.g., cash grants to artists or funds to private parties for family planning services) and the federal registration of trademarks, in which applicants and trademark holders actually pay the Government fees.

Finally, the Court declined to adopt a new doctrine providing for a limited public forum for private speech, with content-, or speaker-based restrictions.  The Court explained that the disparagement clause does not provide a limited public forum for private speech; rather, it “discriminates on the bases of ‘viewpoint’” by denying federal registration to viewpoints deemed offensive by certain groups.

Accordingly, the Supreme Court held that the disparagement clause of the Lanham Act regulates private speech and fails to meet even the relaxed scrutiny of Central Hudson Gas & Elec. Corp. v. Public Serv. Comm’n of N.Y., 447 U.S. 557 (1980) because the provision is “not ‘narrowly drawn’ to drive out trademarks that support invidious discrimination.”

The result is that the PTO can no longer deny the registration of any mark that meets the Lanham Act’s other viewpoint-neutral requirements.  The ruling, of course, is likely to result in a marked increase in trademark applications for offensive or hateful marks that the PTO now has no choice but to register.  Nonetheless, free speech advocates claim that the result is a major win for freedom of expression. The decision certainly confirms that the Court is loath to carve out exceptions to free speech protections.  Indeed, as Justice Kennedy wrote in a concurrence, “To permit viewpoint discrimination in this context is to permit government censorship.”