Court of Appeals Rules that Prohibition Against Federal Registration of Disparaging Trademarks is Unconstitutional Restriction of Free Speech

A recent Court of Appeals decision that could have an impact on the Washington Redskins trademark dispute about their team name, is covered in the following article by my law partner, Mitchell Stabbe, who specializes in trademark law.  He writes about a case where the Court determined that a trademark rule that has led to the denial or rejection of trademarks deemed to be disparaging was an unconstitutional infringement on Free Speech.  This is the first of what we hope will be many articles on this blog from Mitch and his team of trademark specialists: 

In a decision that could have a significant impact on the well-publicized dispute over the REDSKINS trademark, the US Court of Appeals for the Federal Circuit recently ruled that the prohibition against federal registration of disparaging trademarks violates the First Amendment and is unconstitutional.  The case involved an appeal from the denial by the Patent and Trademark Office (“PTO”) of an application by Simon Shaio Tam to register the mark THE SLANTS for an Asian-American band, which selected the name in order to make a statement about racial and cultural issues.  The PTO had found that, regardless of intent, the likely meaning of phrase THE SLANTS may be disparaging to a substantial composite of persons of Asian descent.

Each of the previous appeals affirmed the finding that the mark is disparaging, and held that the issue of constitutionality could not be addressed because of a binding precedent issued by the Federal Circuit in 1981.  That precedent could only be reversed if all of the Federal Circuit judges (as opposed to a panel of three judges, which decides most cases) ruled together.  The court agreed to consider the question whether the prohibition against disparaging marks is constitutional.  In a 9-3 ruling, the Federal Circuit reversed its own precedent and concluded that the statutory prohibition violates the First Amendment and is unconstitutional.  The court reasoned that, by denying registration to disparaging marks, the Government was targeting speech based on the content of the message conveyed by the mark, which is almost always a violation of the First Amendment requirement that the Government make no laws abridging freedom of speech.  Even though the lack of a federal registration does not limit the right to use a mark, the court ruled that denying registration would restrict freedom of speech by creating a disincentive to the adoption of disparaging trademarks because the markholders would be denied the “truly significant and financially valuable benefits” of registration.  (We will address those benefits in an upcoming post.)

The court also pointed out the many of the inconsistent and seemingly arbitrary (and colorful) decisions by the Trademark Office over the years on the question of whether a mark was disparaging.  For example:

• FAGDOG was registered as a trademark for greeting cards, but the same mark was denied registration as a trademark for shirts, caps and other clothing items on the basis that the term FAG is “contemptuous and disparaging” (contemptuousness is not a ground for denying registration);
• HAVE YOU HEARD SATAN IS A REPUBLICAN was refused registration as a trademark for sweatshirts and t-shirts on the basis that the “mark refers to REPUBLICANS in a disparaging manner because SATAN depicts evil,” but the mark THE DEVIL IS A DEMOCRAT was approved for registration for the same goods without any objection being raised; and
• HEEB was refused registration for a blog about religion, social interaction and popular culture and for a dating website because the mark is “an anti-Semitic ethnic slur derived from the word ‘Hebrew’” and thus communicated “hostility toward or prejudice against Jews as a religious or racial/ethnic group,” but HEEB is registered for magazine publishing.

Even so, as any experienced trademark practitioner can tell you, if inconsistency were grounds for challenging a mark, virtually every mark filed with the PTO would be at risk.

Three members of the court agreed that the bar to registering Mr. Tam’s mark was unconstitutional as applied to him, because he was engaging in political speech, which is at the heart of the First Amendment.  However, the three dissenting judges would not have invalidated the statutory provision entirely, because they viewed it as constitutional when applied to commercial speech, which is entitled to less protection under the First Amendment than political speech.

This decision will not directly impact the outcome of the appeal from the decision cancelling various federal registrations for the REDSKINS trademark.  That case is pending in the US Court of Appeals for the Fourth Circuit, which is not obligated to follow the decision from a Court of Appeals from another circuit.  The Fourth Circuit could, however, be persuaded by the reasoning of the Federal Circuit, or it could adopt the position of the dissenting judges.  Ultimately, the U.S. Supreme Court may have the final say on the matter, either if it accepts an appeal by the PTO in this case or if it accepts an appeal from the losing party in the REDSKINS case.

If this ruling stands, broadcasters and media companies can look at seeking trademark protection for phrases that you might not feature on a radio or TV station in hours when children are listening, or which may come from edgier programming that some people may find offensive.  So watch as these cases, including the REDSKINS case, make their way through the courts to see if this view of the First Amendment’s interplay with trademark law is adopted by other courts.