The SLANTS Win Epic Trademark Battle – Supreme Court Rules the “Disparagement Clause” of Trademark Act is Unconstitutional

By: John Montgomery


The Supreme Court of the United States has affirmed the judgment of the Court of Appeals for the Federal Circuit, finding the longstanding “disparagement clause” of the Trademark Act of 1946 (the Lanham Act, 15 U.S.C. § 1052(a)) unconstitutional, in violation of the Free Speech Clause of the First Amendment to the Constitution.

In an earlier Osha Liang Newsletter article (click here to access), we reported the history of Simon Tam, lead singer of the rock band The Slants, who sought federal trademark registration for his band’s name. His application for registration was rejected by the United States Patent and Trademark Office (USPTO) under the disparagement clause on the basis that the trademark may disparage, bring into contempt, or disrepute any person, living or dead.  Attempts to overcome the rejection through the administrative appeal processes at the USPTO were unsuccessful. On appeal to the Court of Appeals for the Federal Circuit (CAFC), the Court found en banc that the disparagement clause was unconstitutional under the First Amendment’s Free Speech Clause.

In this anxiously awaited decision, all of the participating justices of the Supreme Court concurred in affirming the CAFC judgment. As a side note, those following recent CAFC cases on appeal to the U.S. Supreme Court might observe that the Supreme Court has not often agreed with the lower court.  In this case, however, all of the participating justices have concurred in affirming the judgment of the CAFC.

The Slants have succeeded not only in winning the right to register their name at the USPTO, but also have succeeded in invalidating a part of the Trademark Act that has been in place since 1946. This was much more than merely overruling the USPTO’s determination that the term “Slants” was disparaging, for example by concluding the disparagement clause did not apply to this trademark. Such a ruling would have avoided the constitutional issue. To be clear, Mr. Tam and his band promote Asian-American acceptance and diversity; arguably the antithesis of disparagement. Mr. Tam presented reams of evidence and vigorously argued that “The Slants” was not disparaging to the very group to which he and all the band members belong. Mr. Tam reportedly sought to make the very point that the term “Slants” should be wrested from the lexicon of disparaging terms.  Thus, the Supreme Court could have decided the case on that basis, leaving the disparagement clause untouched.  Instead, this case took on a constitutional aspect of its own, and the part of the Trademark Act prohibiting registration of disparaging marks has now been held to be unconstitutional by the highest court in the land. The majority opinion held, “the disparagement clause violates the Free Speech Clause of the First Amendment” (Joseph Matal, Interim Director, United States Patent And Trademark Office, Petitioner V. Simon Shiao Tam -No. 15–1293- [582 U. S. ____ , June 19, 2017]).

JUSTICE ALITO announced the judgment of the Court and delivered the opinion of the Court with respect to Parts I, II, and III–A and an opinion with respect to Parts III–B, III–C, and IV, in which THE CHIEF JUSTICE, JUSTICE THOMAS, and JUSTICE BREYER join. GORSUCH J. took no part in the consideration or decision of the case.

In reaching the judgment of the Court, the government’s separate arguments were considered and found to be unpersuasive. Trademarks are not government speech, so the interest of the government in controlling disparagement is not an applicable governmental interest under governmental “subsidized speech” cases.  Also, governmental expenditure for providing the registration system is not a sufficient interest under a “government program” doctrine to allow control by the government against disparaging registrations.

The majority found that the Court need not determine whether the dispute should be determined under a strict scrutiny standard for viewpoint discrimination or under a more relaxed scrutiny standard for commercial speech. Under the relaxed commercial speech standard, the restriction on speech under the disparagement clause, as it was at issue here, must serve a substantial governmental interest, and it must be narrowly drawn to reach only that substantial interest. The disparagement clause was not sufficiently narrowly drawn to apply only to a legitimate governmental interest. The governmental interest to prevent speech expressing ideas that offend is at the heart of the First Amendment protections. The majority opinion reasoned that, “The public expression of ideas may not be prohibited merely because the ideas are themselves offensive to some of their hearers” (citations omitted).  “Speech that demeans on the basis of race, ethnicity, gender, religion, age, disability, or any other similar ground is hateful; but the proudest boast of our free speech jurisprudence is that we protect the freedom to express “the thought that we hate” (citations omitted). The interests of the government in protecting the orderly flow of commerce are also not sufficient to override the First Amendment rights to free speech. “[T]he disparagement clause is not ‘narrowly drawn’ to drive out trademarks that support invidious discrimination. The clause reaches any trademark that disparages any person, group, or institution.”

“For these reasons, we hold that the disparagement clause violates the Free Speech Clause of the First Amendment. The judgment of the Federal Circuit is affirmed.”

JUSTICE KENNEDY, with whom JUSTICE GINSBURG, JUSTICE SOTOMAYOR, and JUSTICE KAGAN join, concurred in part and concurred in the judgment.

Selected quotes from the concurring opinion may also be instructive on the views of the concurring justices. “This separate writing explains in greater detail why the First Amendment’s protections against viewpoint discrimination apply to the trademark here.”

The concurring opinion indicates that the disparagement clause clearly presents a case of viewpoint discrimination by the government, and the heightened level of scrutiny applies regardless of whether a trademark is considered commercial speech. “The central purpose of trademark registration is to facilitate source identification. . . . Whether a mark is disparaging bears no plausible relation to that goal.” “A law that can be directed against speech found offen­sive to some portion of the public can be turned against minority and dissenting views to the detriment of all. The First Amendment does not entrust that power to the government’s benevolence. Instead, our reliance must be on the substantial safeguards of free and open discussion in a democratic society.” To permit viewpoint discrimination in this context is to permit government censorship. The concurring justices indicate that the viewpoint discrimination rationale makes it unnecessary to address all the issues raised by the parties.

THOMAS J. presented a separate concurring opinion, joining the majority in the judgment and on all the issues except Part II. Justice THOMAS would not have reached Mr. Tam’s statutory arguments that the disparagement clause did not apply because the trademark was not disparaging. The Court had denied certiorari on that issue; it was not before the Court and should not have been decided. Justice THOMAS gave the reason for writing separately by quoting from an earlier concurring opinion: “I continue to believe that when the government seeks to restrict truthful speech in order to suppress the ideas it conveys, strict scrutiny is appropriate, whether or not the speech in question may be characterized as ‘commercial’ (citation omitted).”  There was concurrence with the judgment of the Court.

Questions remain among trademark practitioners whether other prohibitions against registration of “immoral” or “scandalous” matter, found in the same paragraph (15 U.S.C. § 1052(a)) in which the “disparagement clause” appears, will also be impacted by the ruling. The prohibitions were not directly raised, addressed, or ruled upon as to whether such prohibitions could also fall under the First Amendment rights of free speech. Clearly, those provisions were not held to be invalid in this case, so there is no direct impact. The questions are with respect to the applicability of some or parts of the legal reasoning regarding disparaging trademarks to trademarks deemed immoral or scandalous by the USPTO.  If challenges are made, it is likely that questions will appear of whether such trademarks are protectable under the First Amendment’s strict scrutiny standards or whether they are protectable as commercial speech under lower scrutiny standards. Immoral trademarks and scandalous trademarks might at least be considered as expressions of ideas with which we may agree, disagree, like, or hate. In the event that lower standards of scrutiny for commercial speech are applied, will the governmental interest in controlling immoral or scandalous trademarks or in promoting the free flow of commerce, according to the USPTO’s determination, provide a substantial governmental interest for which the statue is narrowly drawn to protect? We are continuing to watch this developing area with great interest.

Conclusion

Ultimately, Mr. Tam’s First Amendment rights to protect The Slants as a trademark, for commercially promoting his band, its positive image, and its message of acceptance, have been protected. The disparagement clause of the Trademark Act is not valid and may not be used to deny his trademark registration or those of others. Regardless of whether the USPTO believes a trademark is disparaging to any person or group, the trademark may not be denied registration on that basis.

Assuming a trademark otherwise meets the requirements for registration, a registration that was previously denied or cancelled based upon the disparagement clause can now be registered. Whether the invalidity of the disparagement clause will unleash a torrent of applications, for registration of trademarks that could arguably be considered disparaging, remains to be seen. The trademark applicant can control whether to seek to obtain a registration and may do so regardless of any potentially disparaging social comment in the mark, whether intended to be disparaging or not. The USPTO does not have the authority to decide whether a mark is disparaging to any persons or groups.

Whether there will be a large number of such applications for registration of “disparaging” trademarks and whether there may be a push to test Trademark Act prohibitions of “immoral” or “scandalous” registrations remains to be seen.