On June 19, 2017, the United States Supreme Court unanimously affirmed a Federal Circuit ruling that held the "Disparagement Clause" of Section 2(a) of the Lanham Act (15 U.S.C. § 1052(a)) unconstitutional on its face. Under the Supreme Court's decision in Matal v. Tam1, the United States Patent and Trademark Office ("PTO") can no longer refuse federal registration to trademarks that "disparage... persons... institutions, beliefs, or national symbols, or bring them into contempt or disrepute."
Given the Supreme Court's categorical rejection of the Disparagement Clause, can the PTO still rely on the remainder of Section 1052(a) to reject marks that are misleading, deceptive, or unlawful, or marks that are "immoral or scandalous"? An examination of the unusual procedural history that brought the case to the Court— and of the complex series of opinions that made up the ruling—may answer some of these questions, but not all.
In 2010, Simon Tam tried to register "The Slants" as the trademark for an Asian-American rock and dance band. Following the procedures set forth in the Trademark Manual of Examining Procedure, the examiner was required to decide under Section 1052(a) whether the proposed mark referred to "identifiable persons, institutions, beliefs or national symbols," and then, if so, to determine "whether that meaning may be disparaging to a substantial component of the referenced group."
The examiner found the mark offensive and denied registration, although Mr. Tam had claimed that he had chosen the name not to disparage, but to "reappropriate the disparaging term" and to defy the stereotype represented by it.
On appeal, a panel of the Federal Circuit held that it was constrained by precedent2 to reject Tam's First Amendment challenge to the Disparagement Clause.3 However, Judge Moore, who wrote the decision for the panel, urged that "[i]t is time to revisit McGinley's holding on the constitutionality of § 2(a) of the Lanham Act." Prompted by Judge Moore's commentary, the Federal Circuit, sua sponte, granted rehearing en banc, vacated the panel's ruling, and issued its decision, holding (by a vote of eight to three) that the Disparagement Clause was unconstitutional on its face.4
The Supreme Court granted the government's petition for certiorari and issued its decision. While all eight voting justices (Justice Gorsuch did not take part in the decision) concurred in the Court's holding that the Disparagement Clause is unconstitutional on its face, they concurred on only one legal theory. That theory is the central holding of Justice Alito's opinion: that the Disparagement Clause results in viewpoint discrimination and is subject to strict constitutional scrutiny, which it cannot overcome. The justices concurred that while the government is allowed to adopt viewpoint discrimination in its own speech, it may not do so with respect to regulation of private speech. The Court rejected the government's argument that trademark registration is government speech, concluding flatly that "[t]rademarks are private, not government, speech."5 The Disparagement Clause, the Court held, imposes viewpoint discrimination on private speech because it permits registration of positive or flattering marks, while prohibiting negative or disparaging marks.
In a separate opinion, Justice Kennedy, joined by Justices Ginsburg, Sotomayor, and Kagan, concurred in Justice Alito's central holding and argued that because viewpoint discrimination imposed on private speech requires rigorous constitutional scrutiny, it was unnecessary to discuss other issues.6
Justice Alito's opinion, however, sets out several additional grounds for holding the Disparagement Clause unconstitutional and for rejecting the government's defense of the clause. First, Justice Alito rejected the claim that trademark registration provides a government subsidy that would allow the PTO to impose viewpoint restrictions.7 Second, he refuted the suggestion that the government may impose restrictions on trademarks because trademark registration is a government program. Even in situations where the government establishes a program—such as a government forum for private speech—the government may not impose viewpoint discrimination.8 Finally, Justice Alito opined that even if the Disparagement Clause were tested under the relaxed scrutiny standard applicable to commercial speech, it would not survive because the government does not have a legitimate interest in preventing speech that offends, and because the clause is not narrowly drawn.9 However, only four justices subscribed to these portions of the opinion.10
In light of the Court's categorical ruling that the Disparagement Clause is unconstitutional on its face as a violation of the First Amendment, what is left of Section 1052(a)?
First, both the Supreme Court and the Federal Circuit appear to caution that their rulings do not affect misleading, deceptive or unlawful marks. As the Federal Circuit majority stated in In re Tam,11 "[u]nlike many other provisions of § 2, the disparagement provision does not address misleading, deceptive, or unlawful marks." And as Justice Kennedy stated in his concurring opinion in Matal v. Tam,12
This case does not present the question of how other provisions of the Lanham Act should be analyzed under the First Amendment. It is well settled, for instance, that to the extent a trademark is confusing or misleading the law can protect consumers and trademark owners... This case also does not involve laws related to product labeling or otherwise designed to protect consumers.
Second, it is not clear whether the Court's ruling will affect the PTO's ability to reject marks that are "immoral" or "scandalous." Indeed, in his dissenting opinion in the Federal Circuit, Judge Dyk warned that "the majority's opinion not only invalidates the bar on disparaging marks in § 2 (a) but may also effectively invalidate the bar on scandalous marks."13
There are several reasons why this concern may be justified. First, the test for determining what is "scandalous" is very similar to the test that the PTO used for determining what is "disparaging." In Matal v. Tam,14 the Supreme Court pointed out that in the PTO's Trademark Manual of Examining Procedure,
A prima facie case of disparagement is made out if a "substantial composite, although not necessarily a majority, of the referenced group would find the proposed mark to be disparaging in the context of contemporary attitudes."
Similarly, a mark is "scandalous" or "immoral" if it is "offensive" to the conscience or moral feelings of a substantial composite of the public,15 a test that raises many of the same First Amendment concerns as the test for disparagement.
Second, the four Federal Circuit cases that had previously upheld the constitutionality of the Disparagement Clause did not involve disparaging marks, but scandalous marks. The marks disallowed in those cases were of a sexual nature—either explicitly so, or making use of a "vulgar" double entendre. The various opinions expressed in the Matal v. Tam decision do not cite or refer to these cases in any way. Are they still good law as applied to scandalous marks, or will the Supreme Court consider the desire to shock or offend by sexual references a protected viewpoint, like the desire to disparage a person or group?
In light of the Court's decision, we will certainly see more disparaging marks bearing the ® symbol. Whether we will also see more "scandalous" marks remains an open question.
1 Matal v. Tam, 137 S.Ct. 1744 (2017).
2 According to Judge Lourie, "The USPTO's authority to refuse to issue trademark registrations with certain offensive content has thus existed in U.S. law for over one hundred years." In re Tam, , 808 F.3d 1321, 1374 (Fed. Cir. 2015, Lourie, J., dissent- ing, internal citations omitted.) The panel's ruling, however, relied principally on four decisions: In re McGinley, 660 F.2d 481, 484 (C.C.P.A. 1981); In re Mavety Media Group Ltd., 33 F.3d 1367, 1374 (Fed. Cir. 1994); In re Boulevard Entertainment, Inc., 334 F.3d 1336, 1343 (Fed. Cir. 2003); and In re Fox, 702 F.3d 633, 635 (Fed. Cir. 2003)
3 In re Tam, 785 F.3d 567, (Fed. Cir. 2015), reh'g en banc grant- ed, opinion vacated, 600 F. Appx. 775 (Fed. Cir. 2015).
4 In re Tam, 808 F.3d 1321 (Fed. Cir. 2015).
5 Matal v. Tam, 137 S.Ct. 1744 at 1760.
6 Id. at 1765.
7 Id. at 1760-1761.
8 Id. at 1763 ("Giving offense is a viewpoint," so disapproval of offensive marks is viewpoint discrimination.)
9 Id. at 1765. The court also discussed Tam's argument that, even if the Disparagement Clause is valid, it should not apply to him because it should be interpreted to apply only to disparagement of persons, not groups. Seven justices joined in rejecting this argument; Justice Thomas filed a concurring opinion in which he argued that the court should not even have considered this point since Tam had not raised it below. In any event, it had no effect on the outcome although the Court could theoretically have seized on it if it had wished to avoid ruling on constitutionality.
10 Only Justices Roberts, Thomas and Breyer joined in these additional sections (Sections III B, III C and IV).
11 808 F.3d 1321 at 1355.
12 137 S. Ct. 1744 at 1768.
13 808 F.3d 1321 at 1364 (Dyk, J. dissenting in part and concur- ring in part)
14 137 S.Ct. 1744 at 1754.
15 As the court stated in In re Fox, 702 F.3d 633 at 634-635:
As might be expected, what constitutes "immoral ... or scandalous matter" has evolved over time. See id. at 1372. The formal legal framework, however, has remained consistent: in order to refuse a mark, "the [Patent and Trademark Office (PTO)] must demonstrate that the mark is 'shocking to the sense of truth, decency, or propriety; disgraceful; offensive; disreputable; ... giving offense to the conscience or moral feelings; ... [or] calling out [for] condemnation.'" Id. at 1371 (second and third alterations in original) (quoting In re Riverbank Canning Co., 25 CCPA 1028, 95 F.2d 327, 328 (1938)). More concisely, and especially usefully in the context of this case, the PTO may prove scandalousness by establishing that a mark is "vulgar." In re Boulevard Entm't, Inc., 334 F.3d 1336, 1340 (Fed.Cir.2003). This demonstration must be made "in the context of contemporary attitudes," "in the context of the marketplace as applied to only the goods described in [the] application," and "from the standpoint of not necessarily a majority, but a substantial composite of the general public." Mavety, 33 F.3d at 1371 (quotation marks omitted).