Does a Ban on "Disparaging" Trademarks Violate Free Speech?

Steven D. Schwinn, John Marshall Law School

The Supreme Court will hear oral arguments tomorrow in Lee v. Tam, the case testing whether the Patent and Trademark Office violated free speech when it denied a trademark to an all-Asian-American dance-rock band called The Slant, pursuant to a statutory prohibition against registering a "disparaging" mark.

Our analysis of the lower court ruling is here.

Here's my preview, from the ABA Preview of U.S. Supreme Court Cases, with permission:

FACTS

Simon Tam is the front-man for an all-Asian-American dance-rock band called The Slants. Tam formed the band in 2006 not only to play music, but also to express his views on discrimination against Asian-Americans. So when Tam turned to name the band, he sought to embrace a term that has been used as a racial insult against Asian-Americans, “slant.” (In so doing, Tam drew on a tradition of “re-appropriation.” Re-appropriation is when members of a minority group reclaim terms that have been used to insult or stigmatize them and redirect those terms as badges of pride.)

The Slants’s political statements sweep well beyond the band’s name. For example, their first album was called “Slanted Eyes, Slanted Hearts”; their fourth was called “The Yellow Album.” Some of their song lyrics advocate for Asian pride and promote cultural heritage. (For more on The Slants, check out their web-site, at www.theslants.com.)

In 2011, Tam sought to register The Slants as a trademark. The trademark examiner refused to register the mark, however, because it was likely to disparage persons of Asian descent, under Section 2(a) of the Lanham Act. (As described below, this section prohibits the Patent and Trademark Office from registering scandalous, immoral, or disparaging marks.) The Trademark Trial and Appeal Board agreed.

Tam appealed to the United States Court of Appeals for the Federal Circuit, arguing that the Board erred in finding the mark disparaging and that Section 2(a) violated the First Amendment. A three-judge panel affirmed the Board’s determination that the mark was disparaging, and rejected Tam’s free-speech claim. The full court, however, reversed and ruled that Section 2(a) violated the First Amendment. The government brought this appeal.

CASE ANALYSIS

Congress enacted the Lanham Act in 1946 to provide a national system for registering and protecting trademarks used in interstate and foreign commerce. In enacting the Act, Congress sought to help assure consumers that a product bearing a particular mark is, indeed, the product that the consumer seeks, and to protect a markholder from misappropriation and misuse of the mark.

Under the Act, trademark registration comes with significant benefits. For example, the holder of a federal mark has the right to exclusive, nationwide use of the mark where there is no prior use by others. Moreover, a markholder can sue in federal court to enforce the trademark; obtain assistance from U.S. Customs and Border Protection in restricting importation of infringing good; and qualify for a simplified process for obtaining protection in countries that have signed the Paris Convention. Finally, a markholder can use registration as a complete defense to state or common law claims of trademark dilution.

Under the Act, the PTO must register a trademark unless it falls into one of several categories of marks precluded from registration. One of those categories, Section 2(a) of the Act, bars registration of a mark that “[c]onsists 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.” The PTO has used Section 2(a) to deny or cancel “disparaging” marks such as Stop the Islamisation of America, The Christian Prostitute, Marriage is for Fags, Democrats Shouldn’t Breed, Republics Shouldn’t Breed, and others. Perhaps most famously, the PTO used Section 2(a) to cancel six trademarks of the Washington Redskins NFL football team (although this decision is now on appeal and may be affected by Tam’s case).

In denying a mark under Section 2(a), the PTO denies a significant government benefit to speech based on the content and viewpoint of that speech, even though the government does not prohibit the speech itself. (The Slants can still use The Slants, even if the name does not enjoy trademark protection.) The parties dispute whether this kind of denial violates the First Amendment.

The government argues that Section 2(a) does not violate the First Amendment, because it does nothing to restrict Tam’s speech. The government argues that laws that restrict speech can violate the First Amendment, but that federal programs that subsidize speech (like the Lanham Act) cannot. The government points to precedents upholding the denial of federal tax-exempt status for non-profit organizations’ lobbying activities and sustaining federal regulations that prohibited the use of family-planning funds for abortion-related services. The government also says that it can decide not to subsidize speech at all, and, based on a case from just two Terms ago, that it need not provide a “mobile billboard” for offensive messages on state specialty license plates. Walker v. Texas Div., Sons of Confederate Veterans, Inc., 135 S. Ct. 2239 (2015). In short, the government contends that it has “significant discretion to decide which activities to fund and what criteria to use for inclusion in government programs.”

The government argues that Section 2(a) falls squarely within these principles. It says that trademark registration confers a significant government benefit, and that it has discretion in determining how to allocate this benefit. The government claims that the PTO’s denial of registration does not restrict Tam from using “The Slants”; it just means that Tam does not get the benefits of federal registration.

The government argues next that the lower court erred in ruling that Section 2(a) was facially unconstitutional. The government says that Section 2(a) is not an unconstitutional condition on a government program, and it is not an impermissible viewpoint-based restriction on speech. Instead, Section 2(a) simply sets out criteria for a government benefit in a way that the Court has upheld, again, just two Terms ago. The government contends that Section 2(a)’s criteria serve legitimate government interests not to encourage the use of disparaging terms and to disassociate itself from racial slurs and other offensive speech. Finally, according to the government, “[t]he Constitution does not put Congress to the choice of either eliminating the federal trademark-registration program altogether or promoting the use of racial slurs in interstate commerce.”

In response, Tam argues that Section 2(a) creates an impermissible viewpoint-based burden on speech. Tam says that Section 2(a) permits the registration of marks that express a positive or neutral view, but not those that express a negative view. He claims that the government’s only interest is in protecting people from offensive trademarks, and that this interest is not sufficiently compelling to justify the viewpoint-based burden.

Tam argues that the government is wrong to try to shoehorn Section 2(a) into First Amendment principles that would allow a burden on speech. Tam says that trademark registration is not a government subsidy, because (unlike the subsidies in the Court’s precedents) it involves no actual disbursement of funds. He claims that registration does not amount to government speech, because the speech involved is by the markholder, not the government. And he contends that trademarks are not commercial speech subject to certain government regulation (and he says that it would fail the commercial speech standard, anyway).

Tam argues next that Section 2(a) is unconstitutionally vague. He says that the provision is inherently vague—what does “disparaging” mean?—and that the PTO has applied the provision inconsistently. He claims that the PTO’s methodology, which considers whether a name disparages an entire racial or ethnic group, only compounds the problem, because the PTO does not have a determinate way to measure whether and how a name disparages an entire group. Tam contends that Section 2(a), as a vague restriction on speech, chills speech, and facilitates discriminatory enforcement. He claims that it is therefore unconstitutional.

Finally, Tam argues that Section 2(a) does not bar registration of The Slants, even if Section 2(a) is constitutional. Tam says that the The Slants is not disparaging under Section 2(a); instead, it is exactly the opposite—a re-appropriated term used as a badge of pride. He asserts that the PTO was wrong to deny registration based on whether The Slants disparages an entire racial or ethnic group. He claims that the Act requires the PTO instead to apply Section 2(a) only when a name disparages “persons,” not groups. The Slants, he says, does not meet this test.

SIGNIFICANCE

While this case is certainly important to Simon Tam and his ability to protect his use of The Slants, the underlying issue has received far more attention in the dispute over the NFL’s Washington Redskins. Using the same Section 2(a) involved in this case, the PTO in 2014 cancelled trademark protection for six Redskins trademarks at the request of a group of Native Americans. A federal judge upheld the cancellation, ruling that “Redskins” was disparaging to “a substantial composite of Native Americans” when each of the marks was registered. The Redskins appealed, but the case is on hold pending the outcome of Tam’s case. (The Redskins asked the Supreme Court to review their case along with Tam’s, but the Court declined.) The Redskins’s case illustrates the stakes involved to the markholders: Losing federal trademark protection would mean that markholders could not protect their marks against others’ uses in the federal system, potentially costing markholders substantial revenue and exclusive name rights. The two cases—Tam’s case and the Redskins’s case—together also illustrate the difficulties in identifying and withholding trademark protection from disparaging names, while extending protection to non-disparaging names.

At the same time, denial or cancellation of federal trademark protection does not mean that a person cannot use the name. Tam could still use The Slants, and the Redskins could still use the Redskins, even if they do not receive federal trademark protection. They simply would not get the benefits of federal trademark protection. Moreover, individuals could still seek trademark protection at the state level. (But this would provide protection only within the state, not nationwide. Moreover, states may have restrictions similar to Section 2(a), so that Tam, the Redskins, and others might not qualify at the state level, either.)

Although much of the briefing in the case is couched in constitutional terms, the Court could rule on narrower grounds. For example, the Court could simply rule that the PTO misapplied Section 2(a) in rejecting Tam’s application. (Tam sets the stage for this kind of ruling by arguing that the PTO erroneously considered disparagement to a group, not to “persons,” in evaluating his application.) If so, the Court could simply remand the case with instructions on interpreting Section 2(a), without ruling on its constitutionality. This kind of ruling could limit the application of Section 2(a), but it would not strike the provision.

If the Court engages the constitutional arguments, look for the Court to determine as an initial matter whether the First Amendment even applies. The Court could dodge the harder constitutional issues simply by ruling, as the government argues, that Section 2(a) does not impose a burden on speech, because trademark registration is a benefit or subsidy, and because Section 2(a) does not restrict speech. If so, the Court would uphold Section 2(a), although it might limit it, as above.

If the Court sees Section 2(a) as a burden on speech, however, the Court is almost certain to strike the provision as unconstitutionally vague or as a viewpoint-based restriction on speech. (The Court has consistently expressed its distaste for content-based restrictions on speech in recent years. Viewpoint-based restrictions are even more suspect.)