Focus on Trademarks: Registration of Derogatory Terms

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By: Keelin Hargadon


In 2015, The Court of Appeals for the Federal Circuit ordered an en banc review of its own previous decision that the term “The Slants” is derogatory to persons of Asian descent, and therefore was properly denied registration in view of Section 2(a) of the Lanham Act. The resulting opinion, issued December 22, 2015, found the Lanham Act’s provision barring the registration of disparaging trademarks to be an unconstitutional violation of the First Amendment of the U.S. Constitution. This decision has the potential to open up the Federal Register to many marks that previously would have been denied registration, and has clear implications for the ongoing controversy over the “Redskins” trademark for an American football team.

Section 2(a) of the Lanham Act permits refusal of registration of a trademark 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.”  Throughout the years, there have been several cases challenging the constitutionality of Section 2(a).  While this conflict is not entirely new, the disparagement provision has most recently been at the forefront because of the controversy over the federally registered “Redskins” trademarks, found to be disparaging and ordered cancelled by Judge Gerald Bruce Lee in the Eastern District of Virginia in 2015.

During the same time period, Simon Tam, a member of “The Slants,” a United States-based band composed of musicians of Asian-American descent, was fighting a battle to gain a registered trademark for the name of his band.  Starting in 2010, Mr. Tam filed two trademark applications for “THE SLANTS” for “Entertainment, namely, live performances by a musical band,” the first of which was abandoned after an unsuccessful appeal.  The examining attorney refused registration for both applications on the basis that the mark “THE SLANTS” is disparaging to Asian-Americans, pursuant to 15 U.S.C. §1052(a) (Section 2(a) of the Trademark Act).  In evaluating the applied-for mark against Section 2(a), the examining attorney applied both dictionary definitions and evidence of the band’s own use of the mark, including the applicant’s assertion that the band’s adoption of the name “The Slants” was “a way to reclaim a racial slur and to assert Asian pride.”  Unconvinced, the examiner found that “the evidence is overwhelming that applicant chose the mark fully aware of the connection to the racial slur.”  The Trademark Trial and Appeal Board (TTAB) affirmed the refusal in April, 2013.  Mr. Tam appealed to the Court of Appeals for the Federal Circuit, arguing that the TTAB erred in finding the mark disparaging, and also challenging the constitutionality of Section 2(a).

Initially, the Court of Federal Appeals for the Federal Circuit (CAFC) agreed with and affirmed the decision of the TTAB, but hinted in the opinion that Section 2(a)’s potential conflict with the First Amendment of the U.S. Constitution had not been finally decided.  In April of 2015, the CAFC issued an order vacating the previous ruling, and sua sponte ordered the appeal reinstated and reconsidered by the court en banc.  In the subsequent opinion, In re Tam, No. 14-1203 (Fed. Cir., December 22, 2015), the CAFC agreed with the TTAB’s decision that the term “slants” is likely offensive to people of Asian descent.  However, the court ultimately disagreed with the TTAB regarding the constitutionality of the disparagement provision of Section 2(a).  Holding to what was considered somewhat settled law, previous court decisions found that refusal to register a trademark does not implicate the First Amendment because refusal to issue a registration does not prevent an applicant from using a mark.  In re McGinley, 660 F.2d 481 (C.C.P.A. 1981).  However, In re Tam specifically overturned McGinley.  The main issues addressed in the opinion are outlined below.


Issue: The disparagement provision denies rights to certain speakers

Government’s argument:

  • Denial of registration does not prohibit use of mark. Applicants are still free to use the mark without the benefits of federal registration.

CAFC ruled:

  • If the government “could deny a benefit to a person because of his constitutionally protected speech or associations, his exercise of those freedoms would in effect be penalized and inhibited.” Majority Op. at 27.
  • “Denial of [registration] benefits creates a serious disincentive to adopt a mark which the government may deem offensive or disparaging.” Majority Op. at 29.

Issue: The denial of rights is view-point based

Government’s argument:

  • Government asserted that “it ought to be able to prevent the registration of ‘the most vile racial epithets and images,’” and “to disassociate itself from speech it finds odious.” Majority Op. at 20.

C.A.F.C. ruled:

  • “The disparagement provision at issue is view-point discriminatory on its face. The PTO rejects marks under §2(a) when it finds the marks refer to a group in a negative way, but it permits the registration of marks that refer to a group in a positive, non-disparaging manner.”  Majority Op. at 21.
  • The CAFC specifically cited the following registered marks in support of its argument: “CELEBRASIANS” and “ASIAN EFFICIENCY”

Issue: Is §2(a) “Commercial Speech?”

Government’s argument:

  • Trademarks are commercial speech because they are used in advertising. Regulations on commercial speech are analyzed under intermediate (not strict) scrutiny, and therefore the regulation survives as a valid restraint on speech.

C.A.F.C. ruled:

  • Trademarks are NOT evaluated under the disparagement provision for their commercial nature, but instead for their “expressive character.” Therefore, under the strict scrutiny test the restriction cannot survive.

Issue: Is trademark registration government speech?

Government’s argument:

  • Trademark registration is a form of government speech and the disparagement provision can therefore survive intermediate scrutiny.

C.A.F.C. ruled:

  • Trademark registration is clearly private speech. Trademarks are associated with their owners, not with the government.  Therefore, the speech is private, not government, and cannot survive the strict scrutiny test.

Issue: Is trademark law a form of subsidy?

Government’s argument:

  • Trademarks are a form of government subsidy and can therefore be regulated by the government.

CAFC said:

  • The trademark system is funded by users, not tax-payers, and benefits of registration are not monetary. Therefore, federal trademark registration is not a government subsidy.

Issue: Can the government rely on “compelling interest in fostering racial tolerance”

Government’s argument:

  • The disparagement provision under 2(a) should be permitted because the government has a compelling interest in fostering racial tolerance.

CAFC ruled:

  • The government does not have an “interest in fostering racial tolerance that would justify preventing disparaging speech.” Majority Op. at 59.

In conclusion, the In re Tam decision has the potential to change the way trademark applications are examined under Section 2(a), effectively ends reliance upon McGinley, and possibly paves the way for a much more “colorful” Federal Register.

 

On March 8, 2016, attorneys for Tam filed a writ of mandamus asking the Federal Circuit to issue an order forcing the PTO to comply with the December ruling, allowing “The Slants” trademark application to proceed through the examination process.  However, the Federal Circuit denied the writ because the PTO has filed an application for extension of time to file a writ of certiorari to bring the case before the U.S. Supreme Court.  Interestingly, despite the fact that the Federal Circuit has not yet ruled on the Redskins case, attorneys for the team have petitioned the Supreme Court to consider the Redskins case if they consider the Tam case.  The Supreme Court occasionally allows such petitions for companion cases like the Redskins and Tam, where lower courts have issued conflicting rulings on the same issues.