On December 22, 2015, The United States Court of Appeals for the Federal Circuit reversed decades of legal precedent and held that the United States Patent and Trademark Office cannot refuse to grant federal registrations for trademarks on the basis of the mark being “disparaging.”[1]  This standard of refusing registrations for “disparaging” marks is derived from Section 2(a) of the Lanham Act, the federal statute that governs U.S. trademark law.[2]

The particular case at issue, surprisingly, was not the Washington Redskins’ long-standing battle with the Navajo to maintain its federal registrations.  Instead, this new precedent is derived from the claims of Simon Tam, the front man for an Asian-American dance-rock band called THE SLANTS.  Mr. Tam named his band The Slants to “reclaim” and “take ownership” of particular Asian stereotypes, knowing that “Slants” is considered a pejorative term and treated as a slur among a significant portion of the relevant population.  Subsequently, Mr. Tam sought to acquire a federal trademark registration for this name.

Overview of the Dispute

The issue here is not whether Mr. Tam can legally name his band “The Slants.”  No one disputes that he is allowed to do so.  The issue the Federal Circuit addressed is whether the First Amendment trumps the Lanham Act and precludes the USPTO’s ability to refuse to register otherwise “disparaging” trademarks pursuant to Section 2(a) of the Lanham Act.  The Federal Circuit held that it does – and that Section 2(a) is accordingly unconstitutional.[3]

The crux of the Federal Circuit’s majority opinion appears to rest on the contention that the potentially expressive nature of trademarks is “private speech” subject to strict scrutiny and that the refusal to grant a registration for private speech may indirectly create a “chilling effect” in the ability of a private individual or entity to select particular words or phrases in formulating a trademark to be applied to goods and services.

Not to bury the lede, but my personal opinion is that the Federal Circuit’s holding is incorrect.  Instead, I agree with the dissenting opinions submitted by Circuit Judges Dyk and Reyna.  I will concede that I am not a Constitutional Law expert.  Nor am I a specialist in the minutiae of First Amendment-based legal precedent.  I am, however, a lawyer that focuses a substantial amount of my practice on trademark law and its applications to business law.  My personal legal opinion is that trademarks are primarily commercial speech, not private speech, and that the First Amendment should not encroach on normatively reasonable regulations on permissible trademarks and the federal registrations thereof.

Personal opinions aside, the following analysis is an overview of the potential conflict between Trademark Law and the First Amendment, as addressed by the In re Tam Court.

Legal Purpose of Trademarks and Section 2(a)

The USPTO defines “trademark” as follows:

“trademark” … protect[s] words, names, symbols, sounds, or colors that distinguish goods and services from those manufactured or sold by others and to indicate the source of the goods.  Trademarks, unlike patents, can be renewed forever as long as they are being used in commerce.[4]

Trademarks therefore, in essence, operate to distinguish goods and services that are publicly offered to consumers.  Trademarks and their associated rights only exist to the extent that these marks are being actively “used in commerce.”  Congress is able to recognize and regulate trademarks through the Commerce Clause of the United States Constitution.[5]

The Lanham Act, meanwhile, exists to “protect the public so it may be confident that, in purchasing a product bearing a particular trade-mark which it favorably knows, it will get the product which it asks for and wants to get.”[6]  The secondary purpose of the Lanham Act “ensures that a markholder can protect ‘his investment from … misappropriation by pirates and cheats’.”[7]  Accordingly, the dual purposes of the Lanham Act are also to protect the consuming public and also the markholder’s commercial interests.  It does not regulate political speech.  It does not serve to protect or regulate private artistic expression.  Trademarks are primarily a commercial property and any rights attributed to trademarks exist only to the extent such trademarks are actively being used in commerce.  Otherwise, Congress has no legal basis to grant trademark rights to markholders.

The Lanham Act does not provide universal protection for all trademarks.  A mark that resembles another registered mark or is likely to cause confusion or mistake or is likely to deceive is not subject to protection under the law.  These restrictions are consistent with the purpose of the Lanham Act – to protect the consuming public and also the original markholder’s rights.  These restrictions do not trigger the First Amendment.  Section 2(a) of the Lanham Act, meanwhile, further restricts the registration of any trademark that:

“consists 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.”[8]

This is where the Federal Circuit focuses its inquiry.  In particular, Court addresses the alleged constitutionality of the “disparaging” aspect of Section 2(a).  The USPTO rejected Mr. Tam’s trademark application on grounds that THE SLANTS is disparaging to a significant portion of the population.  What does it mean to be “disparaging” though?  The law defines it as follows:

A disparaging mark is a mark which “dishonors by comparison with what is inferior, slights, deprecates, degrades, or affects or injures by unjust comparison.”[9]

Here is where the conflict arises.  The First Amendment states that “Congress shall make no law … abridging the freedom of speech.”  Meanwhile, Section 2(a) of the Lanham Act precludes the registration of any mark that may be “disparaging” to “a substantial composite” of the group referenced by the mark.[10]  Prior to In re Tam, the precedential opinion was In re McGinley, 660 F.2d 481 (C.C.P.A. 1981), which held that:

With respect to appellant’s First Amendment rights, it is clear that the PTO’s refusal to register appellant’s mark does not affect his right to use it.  No conduct is proscribed, and no tangible form of expression is suppressed.  Consequently, appellant’s First Amendment rights would not be abridged by the refusal to register his mark.[11]

The Federal Circuit, through In re Tam, has now expressly overruled McGinley with respect to the “disparaging” aspect of Section 2(a) of the Lanham Act.  Even though the Lanham Act does not govern an individual’s right to use particular mark, even a disparaging mark, the law of the land today is that the refusal to grant the federal rights associated with trademark registration is an unconstitutional restriction on an individual’s First Amendment rights.

How Does the First Amendment Apply to Trademarks?

The majority opinion in In re Tam concludes without much analysis that Section 2(a) is a regulation that “burdens private speech based on disapproval of the message conveyed.”  Thus, trademarks are considered to be “private speech” for purposes of their First Amendment analysis.  Why does this matter?  Because the First Amendment is not absolute.  We all know there are limits to the First Amendment.  It does not give an individual the right to shout “fire” in a crowded theater.  It does not allow one to threaten the life of the President.  It does not allow one to use certain speech that may incite riots.

Legal precedent also distinguishes the nature of speech.  In particular, “private” speech is assessed differently from “commercial” speech.  Likewise, “government” speech can be more restricted than “private” speech.  Thus, whether trademarks are considered to be “private” speech or “commercial” speech is vastly important for setting the foundational standards for what Congress can and cannot regulate when it comes to the nature of trademark protections afforded by the government.  The majority declared that trademarks are “private” speech based, in part, on the potentially “expressive” nature of particular words and phrases in a mark.  The dissenting opinions focus on the commercial nature of trademarks and assert that trademarks should be primarily considered “commercial” speech, even if there may be elements that can be expressive and within the realm of “private” speech.  The resulting opinions are a master-level class in hair-splitting.

Trademarks as Private Speech

The majority holds that trademarks are subject to strict scrutiny under the First Amendment because trademarks are private speech.  Any regulation of private speech is subject to “strict scrutiny” under the law.  What does this mean?  Typically, if you are regulating speech and the court deems it subject to “strict scrutiny,” it means your regulation is going to be found to be unconstitutional nearly every time.  Thus, the question herein is why are trademarks private speech subject to strict scrutiny?

The majority opinion implies that Section 2(a)’s ability to refuse registration “discriminates on the basis of content” and that it is an impermissible content-based restriction.[12]  The majority also states that it is the nature of the message conveyed by the speech that is being regulated.  Specifically, “the idea or message expressed” by particular trademarks is regulated by Section 2(a).[13]  The majority states that it is the government that is discriminating by allowing Section 2(a) to regulate speech and that the government is disapproving of certain messages (the dissenting opinions dispute this, as I will address later).  Accordingly, the ability to reject “disparaging” trademarks targets the expressive nature of the mark.  The majority’s holding in In re Tam therefore finds this to be an unconstitutional burden on private speech.

The majority distinguishes trademarks from standard “commercial speech” by stating that “it is always a mark’s expressive character, not its ability to serve as a source identifier, that is the basis for the disparagement exclusion from registration.”[14]  Accordingly, the commercial nature of trademarks is deemed irrelevant to the majority’s First Amendment analysis.  The majority points to the prior refusal to register the mark “STOP THE ISLAMISATION OF AMERICA” as an instance of Section 2(a) regulating expressive content based on the messaged conveyed.[15]  This rejection is seen as a government “moral judgment” that restricts a mark’s expressive content.  Accordingly, “[t]hat the speech is used in commerce or has a commercial component should not change the inquiry when the government regulation is entirely directed to the expressive component of the speech.”  The majority also refers to the precedent of R.A.V., where under First Amendment law, for speech that has a dual private/commercial character, the analysis is to be focused on “which aspect of the speech is targeted by the measure being reviewed.”[16]

The Lanham Act does not operate to “ban” speech.  This is not in dispute.  The only issue is whether the refusal to register a mark is an impermissible burden on free speech.  The lack of a federal registration does not preclude any individual from using a trademark in commerce.  It just does not afford that trademark the benefits of the protections through the Lanham Act.  Even though Section 2(a) does not operate to ban speech, the Court held that Section 2(a) nevertheless operates to have tangible negative effects on speech, namely “that denial of a benefit would chill exercise” of the right to use certain words or phrases within a trademark.  Even if the markholder can still use the mark, the Court find that in theory Section 2(a) creates a burden on speakers and benefits others by refusing to provide registration.  These benefits are both speech-based and economic-based, as many have demonstrated that trademarks can acquire substantial value in the relevant marketplace and that federal registration can provide even more economic value.

Trademarks as Commercial Speech

The majority opinion recognizes the commercial features of trademarks but finds the argument that trademarks are purely “commercial speech” to not be compelling.  Meanwhile, the concurring and dissenting opinions directly attack the majority’s conclusion that trademarks are fundamentally private speech.  Judge Dyk noted that the majority may not have properly interpreted Section 2(a)’s underlying purposes and procedural applications.  Specifically, Section 2(a) is written and designed to preclude the use of government resources when a trademark’s message may be disparaging to a substantial composite of the disparaged group.[17]  Thus the Lanham Act is not about the government making a value-based judgment on the trademark’s content or message, but instead applies a series of objective tests to make determinations on behalf of the allegedly disparaged group.  Judge Dyk noted the following:

Thus the purpose of the statute is to protect underrepresented groups in our society from being bombarded with demeaning messages in commercial advertising.  … I do not think that the government must support, or society tolerate, disparaging trademarks in the name of commercial speech.[18]

Judge Dyk further distinguishes between instances where trademarks can be a hybrid of private and commercial speech (hence his concurrence with parts of the opinion).  Judge Dyk also noted the distinction between certain types of other private/commercial speech, notably where the government is legally able to restrict certain speech that is racially or sexually disparaging in the commercial workplace, which can be a violation of Title VII as harassment or the creation of a hostile work environment.[19]  By refusing to make these distinctions, Judge Dyk contends that the law has routinely been “careful to distinguish core commercial speech from speech at the First Amendment’s core.”[20]  This requires the use of common-sense distinctions as applied to commercial speech.  The majority opinion wholly failed to provide an analysis on private versus commercial speech when it comes to trademarks, including the particular trademark at issue.  The majority also ignored that there is substantial precedent for the government to be able to regulate some types of commercial advertising, even if it would be protected in other forms as private speech.[21]  For example, advertising can legally be restricted to protect the audience’s privacy interests.  Trademarks can readily be seen as analogous to advertising when it comes to commercial speech that may have expressive or private-speech type content.

As summarized by Judge Dyk, “disparagement in commercial advertising furthers no First Amendment value.”[22]  Disparaging trademarks similarly lack any First Amendment value when they serve to violate the privacy rights of a substantial composite of a disparaged group.  Moreover, the USPTO assesses disparagement as “essentially a violation of one’s right of privacy – the right to be let alone from contempt or ridicule.”[23]  Judge Dyk justifies the constitutionality of Section 2(a) by stating that operates as the government’s “decision not to assist” disparaging commercial expression.  This is an entirely reasonable assessment of the Lanham Act and its role in regulating trademarks while also maintaining the balance between private and commercial speech.

Judge Reyna echoes many of Judge Dyk’s most salient points and noted that the Supreme Court has previously held that trademarks are “a form of commercial speech and nothing more” and that the “purpose of a trademark is merely to ‘propose a commercial transaction’ by identifying the source of goods or services.”[24]

Just because a trademark may include elements of expressive content, even content that may include matters of public interest or political value, trademarks remain primarily commercial speech.[25]  As stated by Judge Reyna, “commercial speech does not transform into core political speech with full First Amendment protections simply because it ‘links a product to a current political debate’.”[26]  Trademarks are essentially for use in interstate commerce and are therefore “indisputably commercial, not political.”[27]

Additional Considerations

While the crux of the arguments in In re Tam regard the nature of private speech versus commercial or government speech, there were additional factors addressed by the Court.

These considerations included the nature of a federal trademark registration.  By acquiring a federal trademark registration, a markholder gains certain benefits that a common law trademark owner lacks.  This includes the following: exclusive nationwide use of that mark; presumptions of validity in court; the right to have the mark be deemed incontestable after five years of use; the right to sue for infringement in federal court; the rights to receive additional damages from willful infringement; the right to prevent counterfeit goods from importation; and potential international rights and recognitions for use of the mark.[28]

The parties fought over the nature of these rights.  The government attorneys contended that it is a form of subsidy and therefore subject to regulation.  The “subsidy” argument is key because a registration confers additional benefits and presumably does not take anything tangible or substantive away from a markholder that does not have a federal registration.  The majority opinion claims that the potential “chilling effect” of Section 2(a) negates the ability of the government to treat registration as a form of subsidy.  The majority further noted that even registered marks can later be cancelled because of future “disparaging” determinations, which causes economic damages to a markholder that has invested time and resources into a particular mark.  The majority contends that the First Amendment should protect the right to choose potentially “controversial” trademarks and that Section 2(a)’s chilling effect reduces the ability to reliably use such expressive content.

I posit that any such “expressive content” is best protected, if at all, outside the realm of trademark law.  The lack of a federal trademark registration does not reduce a markholder’s ability to inform potential customers about the source of his goods and services in the commercial marketplace. The fundamental tenets of trademark law – protecting the customer from confusion and protecting the markholder from infringement – do not rise and fall with the protection (or lack thereof) for any “expressive content” that may be present within a trademark.

The majority also spent a substantial amount of time comparing trademark registrations to copyright registrations.  I believe this is in error.  There are significant procedural and substantive differences between trademarks and copyrights, including how they are registered by the government and subsequently maintained.  In particular, copyright law governs artistic works and expression.  The Supreme Court has long-since stated that it should not be the arbiter of taste or quality of art.[29]  Copyright is inherently a private artistic expression representing personal taste and style.  While copyrighted works of art can later be commercially sold, the government does not register and regulate copyrights based on quality or artistic value.  The registration of copyrights by the U.S. Copyright Office is completed with minimal administrative oversight.  The Copyright Office does not register works based on quality of the content.

Contrast this with trademark law, which is substantially regulated by the USPTO based on the quality and distinctiveness of trademarks – so as to protect the dual interests of consumers and existing markholders.  Generic trademarks cannot be protected.  Descriptive marks must acquire secondary meaning in the commercial marketplace.  There is an accepted scale of “distinctiveness” that a trademark must satisfy to be registered and protected.  These are substantive requirements that are simply lacking in copyright law when it comes to registration and oversight by the government.  Accordingly, trademarks are fundamentally commercial properties and are treated under the law quite differently from copyrights.  To compare copyrights to trademarks in a First Amendment analysis is a shortcut filled with dangerous outcomes.

While particular aspects of trademarks can include artistic elements or expressive content that may fall within the spectrum of copyright law, the aspects of those works that are subject to trademark laws are purely commercial aspects and should be governed accordingly.  For these reasons, among the others enumerated above, I believe that the majority in In re Tam erroneously expanded the reach of the First Amendment into trademark law and that holding Section 2(a) of the Lanham Act to be unconstitutional is equally in error.

[1] In re Simon Shiao Tam, No. 2014-1203, 2015 U.S. App. LEXIS 22300 (Fed. Cir. Dec. 22, 2015).  A full copy of the opinion can be found at http://www.cafc.uscourts.gov/sites/default/files/opinions-orders/14-1203.Opinion.12-18-2015.1.PDF.

[2]  Lanham Act § 2(a), 15 U.S.C. § 1052(a).

[3]  The Federal Circuit limited its analysis to the “disparaging” element of Section 2(a).  This opinion does not address whether immoral or scandalous marks can be refused registration, though the Court acknowledged that this particular holding may extend to that in later cases.

[4]  See also TMEP § 1202.

[5]  This should be distinguished from the rights attributed to patents and copyrights, which are directly derived from Article I, Section 8 of the Constitution.

[6]  In re Tam, at p. 5 (citing Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763, 782 n.15 (1992) (Stevens, J., concurring)).

[7]  Id. (citing Inwood Labs., Inc. v. Ives Labs., Inc., 456 U.S. 844, 854 n.14 (1982)).

[8]  15 U.S.C. § 1052(a).

[9]  In re Tam, at p. 9 (citing In re Geller, 751 F.3d 1355, 1358 (Fed. Cir. 2014)).

[10]  TMEP § 1203.03(b)(i).

[11] McGinley, 660 F.2d at 484.

[12]  In re Tam, Op. at p. 18-19.

[13]  Id. at 19.

[14]  Id. at 23-24.

[15]  Id.

[16]  R.A.V. v. St. Paul, 505 U.S. 377, 385 (1992).

[17]  In re Tam, Dyk, J. concurring in part and dissenting in part, at p. 2 (citing In re Lebanese Arak Corp., 94 USPQ2d 1215, 1217 (TTAB 2010)).

[18] Id. at p. 3.

[19] Id. at p. 4.

[20] Id. (citing Florida Bar v. Went for It, Inc., 515 U.S. 618, 623 (1995).

[21] Id. at p. 6 (citing Hurley v. Irish-American Gay, Lesbian & Bisexual Group of Boston, 515 U.S. 557, 573 (1995).

[22] Id. at p. 8.

[23]  Id. at p. 8 (citing TMEP § 1203.03(b)).

[24]  In re Tam, Reyna, J. dissenting, at p. 2 (citing Friedman v. Rodgers, 440 U.S. 1, 11 (1979) and Cent. Hudson Gas & Elec. Corp. v. Pub. Serv. Comm’n of New York, 447 U.S. 557, 562 (1980)).

[25]  Id. at p. 3.

[26]  Id. at p. 3 (citing Cent. Hudson, 447 U.S. at 563).

[27]  Id. at p. 4.

[28]  In re Tam, majority opinion at p. 6.

[29]  Bleistein v. Donaldson Lithographing Co., 188 U.S. 239 (1903) (“It would be a dangerous undertaking for persons trained only in the law to constitute themselves final judges of the worth of pictorial illustrations…”)