Did the Supreme Court open the floodgate to offensive trademarks?

The Washington Redskins will now enjoy the benefit of using “®” in connection with the team’s name, thanks to the U.S. Supreme Court and a little known band called The Slants. This week, the high court finally settled the (many) years old question as to whether the federal ban on offensive trademarks violates the First Amendment, holding that it does.

Simon Tam, the lead singer of The Slants, chose his band’s name in order to “reclaim” the term and “drain its denigrating force as a derogatory term for Asian persons.” In 2011, he attempted to trademark the name, but the U.S. Patent and Trademark Office refused registration on the ground that it violated the prohibition on trademarks that “disparage … or bring … into contemp[t] or disrepute” any “persons, living or dead” under the Lanham Act.

{mosads}Importantly, nothing stopped Tam from exclusively using The Slants for the name of his band and from stopping others from using The Slants, should he choose to do so, by asserting a claim for unfair competition or false designation of origin under 15 U.S.C. § 1125. However, Tam was not entitled to the benefits accompanying a federal registration, of which there are many.

In Matal v. Tam, the Supreme Court sweepingly rejected the U.S. Patent and Trademark Office’s position that registration of trademarks converts the mark into “government speech” that can be regulated based on the viewpoint that it appears to express. Fundamentally, the First Amendment prevents the government from punishing or suppressing speech based on disapproval of the ideas or perspectives the speech conveys. Therefore, the high court held that the Lanham Act’s disparagement clause violates the free speech clause of the First Amendment.

The impact of the court’s decision is readily apparent in the context of the dispute over the NFL’s Washington Redskins. At the request of a group of Native Americans, the U.S. Patent and Trademark Office canceled the Redskins’ trademarks in 2014 for violating the disparagement clause. A federal district court upheld that cancellation on the ground that “redskins” is disparaging to large number of Native Americans. The Washington Redskins appealed that decision, but that decision was held in abeyance pending The Slants case.

As the Washington Redskins case illustrates, there are potentially huge stakes involved in connection with losing federal trademark protection. Registration of a trademark makes it easier for a party to legally assert the mark against others who try to use it. For example, registration provides nationwide notice of ownership of the trademark as of its registration date and prevents others from registering confusingly similar trademarks.

It also serves as evidence of the validity and exclusive ownership of the mark, with heightened protection after five years and the possibility of becoming “incontestable.”  And registration grants substantial monetary remedies not otherwise available to owners of unregistered (or common law) trademarks, including certain statutory damages against counterfeiters.

The disparagement clause has been around for 70 years. One can only wonder how many trademarks have been refused registration because certain groups of people found them to be offensive. The U.S. Code also includes a related prohibition on trademarks for “immoral” and “scandalous” matter. These focus on the meaning of the mark to the general public, while the test for disparagement focuses on the impression the mark is likely to have on the allegedly disparaged group. The Supreme Court’s decision in The Slants case does not address these similarly subjective grounds for refusal, leaving open this avenue for future registration refusals.

It is curious to consider whether the Supreme Court has opened the proverbial floodgate to the registration of prejudicial or offensive marks — those which could be deemed disparaging, immoral or scandalous under the law — including, for example, “Ku Klux Klan,” which was refused registration in 2005, “Coffee Nazi,” which was refused registration in 2014, or even “Islamic Terrorists,” which was applied for earlier this year.

Matthew S. Nelles is a partner on the dispute resolution team at law firm Berger Singerman, where he focuses his practice on complex commercial and intellectual property disputes, including patent, copyright, trademark, trade secret, and internet liability cases. He is a board certified intellectual property lawyer by the Florida Bar Association.

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