In a highly anticipated decision, the Federal Circuit Court of Appeals, sitting en banc, ruled today that Section 2(a) of the Lanham Act, which bars registration of marks that “disparage” a group of persons, unconstitutionally infringes free speech. In In re Tam (No. 14-1203, Fed. Cir. Dec. 22, 2015). In a 9-3 decision, Judge Kimberly Moore wrote that, “The government cannot refuse to register disparaging marks because it disapproves of the expressive messages conveyed by the marks.”

The decision opens the door for federal registration of marks that many would consider offensive or racially insensitive. Moreover, the decision may have an impact on the validity of the REDSKINS trademark registrations. The USPTO granted a petition to cancel several REDSKINS registrations because they were disparaging of Native Americans, and the propriety of that decision is presently before the Fourth Circuit Court of Appeals. The In re Tam decision will no doubt have an impact on that Court’s consideration of the issue. Many commentators believe the Supreme Court may take up the issue.

The Tam case involved the USPTO’s refusal to register the mark THE SLANTS, which was used as the name for an “Asian-American dance-rock band” because the term was disparaging to people of Asian descent. A Federal Circuit panel had previously affirmed the USPTO’s refusal based on precedent that held that the refusal of a registration did not stop the applicant from using the mark and therefore did not bar any speech. On rehearing en banc, the majority applied an “unconstitutional condition” analysis, and held that a federal trademark registration is an important federal benefit that cannot be denied because of the expressive content of the mark. Along the way, the majority ruled that the “content based regulation” could not be justified on the grounds that trademarks are commercial speech. The Court held that the bar against registration did not seek to regulate the commercial function of the mark, but was instead a “viewpoint based” regulation. The Court also distinguished a recent Supreme Court decision in Walker v. Texas Division, Sons of Confederate Veterans, Inc. (135 S. Ct. 2239, 2015), finding that, because an automobile license plate was “government speech,” Texas could refuse a citizen group’s request to display a confederate flag on a license plate. Unlike the license plate, a trademark registration is not “government speech.” Instead, the trademark is private speech and neither the “®” symbol nor the issuance of a government certificate of registration converted the private speech to government speech.

The opinion is littered with often colorful and sometimes disturbing examples of inconsistent decisions by the USPTO. For example, the Trademark Office refused to register the mark HAVE YOU HEARD SATAN IS A REPUBLICAN but allowed the mark THE DEVIL IS A DEMOCRAT. And to make its point that trademarks are not government speech, the Court offered several examples of marks that the government would not support, such as THINK ISLAM and GANJA UNIVERSITY.

Judge Dyk concurred in the result, but disagreed that Section 2(a) was “facially” invalid. He would have held that Applicant’s mark was “political” speech and therefore subject to the strictest constitutional scrutiny. But he would have allowed the regulation of marks that were merely commercial.

Judge Lourie dissented, and would instead follow precedent that there was no First Amendment violation because the denial of a registration did not prohibit any speech.

The case is doubly significant because of its impact on the REDSKINS trademarks, which the USPTO cancelled under the same statute as “disparaging” of Native Americans. A district court decision upholding the USPTO’s decision to cancel the marks is presently on appeal to the Fourth Circuit Court of Appeals. If the Fourth Circuit follows the Federal Circuit decision, then the cancellation of the REDSKINS mark will be reversed.

In addition, the case is significant because it calls into question other parts of Section 2(a), which also bars registration of “scandalous” and “immoral” trademarks. Although the Court did not rule that these other aspects of the statute were also unconstitutional, it nonetheless made it clear that it was open to future challenges to these provisions.

Regardless, many commentators believe that the issue is likely to be resolved by the Supreme Court.

Members of our Intellectual Property Department and its Trademarks Group represent clients in Trademark Trial and Appeal Board (TTAB) proceedings and trademark matters in federal and state court, and advise clients on a wide range of other trademark enforcement and brand protection strategies.

Copyright © 2015 by Ballard Spahr LLP.
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