Editor’s note: Erica B. E. Rogers, who is part of the Ward and Smith, P.A. law firm, is an attorney focused on intellectual property issues.

RALEIGH – This article continues an earlier discussion of the application of the Latham Act’s disparagement provision to bar trademark registration. At the time the first article was written, the United States Patent and Trademark Office (“USPTO”) had requested review by the United States Supreme Court of In re Tam, a case in which the United States Court of Appeals for the Federal Circuit (“Federal Circuit”) held that the disparagement provision constituted viewpoint discrimination in violation of the First Amendment’s Free Speech Clause. The Supreme Court agreed, recently announcing its decision in the case, now captioned Matal v. Tam.

As a brief reminder of the issue in In re Tam, The Slants, an Asian-American rock group, had been fighting since 2010 to register the name of their band with the USPTO. Their federal trademark application was initially refused because the USPTO determined that the term, “slants” disparages Asian-Americans.

Statutory Basis

The Lanham Act (the federal law regulating trademarks) contains a statutory bar to registration of a trademark that contains matter which “may disparage persons, institutions, beliefs, or national symbols, or bring them into contempt or disrepute.” This provision is known as the “disparagement provision.”

Arguments and Decision

The arguments presented to the Supreme Court by counsel for both sides in Matal v. Tam —Matal, as interim director of the USPTO, and Tam, Simon Shiao Tam, a member of The Slants—are as follows:

The USPTO’s Argument

The USPTO sought to uphold the disparagement provision as constitutional and deny trademark registration to The Slants. The USPTO argued refusal to register the mark was not a prohibition of free speech, but a denial of government benefits. The USPTO reasoned that nothing prevented The Slants from using the mark in commerce and nothing in the First Amendment required the government to incentivize disparagement.

In oral argument, the USPTO also contended that disparaging marks distract the consumer from the objective of a trademark, which is to indicate the source of the goods. Finally, the USPTO reiterated that trademark registration is based in a government program, publication of trademarks on the Federal Register is government speech, and the government has a legitimate reason to bar disparaging marks from registration.

The Slants’ Argument

The Slants sought trademark registration of their band name arguing that the disparagement provision was unconstitutional based on viewpoint discrimination and vagueness.

In oral argument, The Slants maintained that trademarks have both commercial and non-commercial, or expressive, components. That expression triggers the First Amendment. Refusing registration based on disapproval of some speech and not of other speech violated the Free Speech Clause of the First Amendment. Furthermore, the USPTO’s apparent historical inconsistency in application of the disparagement provision was evidence that the provision was unconstitutionally vague.

The Supreme Court’s Decision

On June 19, 2017, the Supreme Court, affirming the Federal Circuit’s prior holding, ruled that the disparagement provision violates the Free Speech Clause of the First Amendment.

All eight Justices agreed that the disparagement provision was unconstitutional viewpoint discrimination. Differences in their reasoning are set forth in the Supreme Court’s full opinion, but unanimously, the Justices sided with The Slants’ arguments.

The Court rejected the USPTO’s argument that trademarks are government speech, holding that they constitute private speech. As noted in one of the concurring opinions, government regulation of private speech must be “viewpoint neutral.” The Court found that the Lanham Act’s disparagement provision violated such neutrality and was therefore unconstitutional because “speech may not be banned on the ground that it offends” and “an examiner [of the USPTO] may not reject a mark based on the viewpoint that it appears to express.”

While the Court briefly discussed whether trademarks constitute commercial speech subject to a more relaxed constitutional analysis, the Court found the determination unnecessary because the Court concluded that the disparagement provision was not constitutional, even under the lesser standard. However, this indicates that the holding in In re Tam may apply even to commercial speech.

USPTO Response

As a result of the Supreme Court’s decision, the USPTO will no longer apply the disparagement provision as the basis to refuse registration. The USPTO also has confirmed that applications suspended awaiting this Supreme Court decision will now be released from suspension and examined for registration.

The Implications of In re Tam on the Analysis of the Lanham Act’s “Scandalousness Provision”

The scandalousness provision of the Lanham Act—which bars registration of marks that comprise immoral or scandalous matter—is also the subject of current litigation. In the Federal Circuit case of In re Brunetti, Erik Brunetti is seeking federal trademark registration of the name of his clothing line “FUCT.” The USPTO refused registration based on the scandalous provision of the Lanham Act, namely, that the applied-for mark is phonetically equivalent to “f*cked,” and thus is vulgar and offensive. Brunetti first appealed the decision to the Trademark Trial and Appeal Board (“TTAB”), which affirmed the refusal, and then to the Federal Circuit, where the matter is pending review. However, the case was set aside awaiting the Supreme Court’s decision in In re Tam regarding the constitutionality of the disparagement provision.

Following, and in consideration of the Supreme Court’s recent decision in In re Tam, the Federal Circuit will presumably move forward with In re Brunetti. However, applications suspended for marks comprising immoral or scandalous matter, that were suspended at the same time as the marks that disparage (March 2016), will remain suspended until the Federal Circuit’s ruling.

The Redskins

Other relevant litigation surrounds the Washington Redskins, a professional football team, and their trademarks. In June 2014, the TTAB canceled six registrations based on the disparagement provision, ruling that the “REDSKINS” registrations disparage Native American persons. The Redskins appealed to the U.S. District Court for the Eastern District of Virginia, which affirmed the cancellation. The matter was then appealed to the United States Court of Appeals for the Fourth Circuit (which also has jurisdiction over matters challenging adverse decisions of the USPTO). The Supreme Court ruling in In Re Tam is likely to influence the decision in this case as well.

Looking Ahead

The Supreme Court decision in In re Tam is important, but the legal requirements, considerations, and interplay between use and registration remain stringently regulated by the USPTO.

There now could be a flood of trademark applications to the USPTO from applicants who earlier believed the disparagement (or scandalousness) provision precluded registration, but the likelihood that many of these marks register is limited. This is because the requirements for federal trademark registration are far more complex than just whether or not the mark disparages, or comprises scandalous or immoral matter. For example, an individual or entity must have actually used a trademark in connection with identified goods or services in interstate commerce, or in commerce lawfully regulated by Congress, prior to achieving federal registration and the benefits offered by federal registration.

In the context of The Slants, free expression is at the heart of the music industry, and the adoption of a band name that serves as reappropriation of a term that was previously deemed disparaging assists to develop a successful brand for the group. However, trademark selection and clearance is extremely context specific, and individuals and entities should realize the long-term considerations and reputational effect their marks may have on their brand.

(C) Ward and Smith, P.A.

Read more about the case at:

http://www.npr.org/sections/thetwo-way/2017/06/19/533514196/the-slants-win-supreme-court-battle-over-bands-name-in-trademark-dispute