Does the First Amendment Guarantee the Right
to Register Disparaging Trademarks?

Can the government refuse to grant its blessing—and the economic benefits that go along with it—to trademarks that disparage individuals or groups? By overruling its own long-standing precedents, the Federal Circuit may have made this issue ripe for determination by the Supreme Court and may have indirectly saved the trademarks of the Washington Redskins from cancellation.

At stake is the constitutionality of Section 2(a) of the Lanham Act1, which allows the U.S. Patent and Trademark Office ("PTO") to refuse federal registration for a trademark that "consists 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." The Federal Circuit's recent decision, holding the disparagement provisions of Section 2(a) unconstitutional, is in direct conflict with a decision in the Eastern District of Virginia that upheld the PTO's right to cancel trademarks of the Washington Redskins professional football team.

The Federal Circuit and In re Tam

The "disparagement" section of the Lanham Act became law in 1946, although the PTO had, and exercised, the authority to refuse registration to offensive marks long before then.2In 1981, the Court of Customs and Patent Appeals—the predecessor to the Court of Appeals for the Federal Circuit—rejected a First Amendment challenge to Section 2(a) of the Lanham Act in In re McGinley,3holding that the First Amendment did not apply because Section 2(a) does not prohibit the use of offensive trademarks, only their federal registration. The court said:

  • With respect to appellant's First Amendment rights, it is clear that the PTO's refusal to register appellant's mark does not affect his right to use it. … No conduct is proscribed, and no tangible form of expression is suppressed. Consequently, appellant's First Amendment rights would not be abridged by the refusal to register his mark.4

The Federal Circuit upheld Section 2(a) again in In re Mavety Media Group Ltd.,5 again in In re Boulevard Entertainment, Inc.,6 and again in In re Fox.With respect to the First Amendment, the court in Fox stated:

  • This court and its predecessor have long assumed that the prohibition "is not an attempt to legislate morality, but, rather, a judgment by the Congress that [scandalous] marks not occupy the time, services, and use of funds of the federal government." … Because a refusal to register a mark has no bearing on the applicant's ability to use the mark, we have held that § 1052(a) does not implicate the First Amendment rights of trademark applicants.8

In Test Masters Educational Services, Inc. v. Singh,the court held that a disputed trademark claimed by Singh lacked secondary meaning and was invalid. The court directed Singh to withdraw his application to register the mark, and enjoined him from re-filing it. The Court of Appeals for the Fifth Circuit held that this prohibition did not violate Singh's First Amendment rights, citing the Federal Circuit's decisions in McGinley and Mavesty: " We join our sister circuit in rejecting Singh's argument that prohibiting him from registering a mark with the PTO violates his first amendment rights."10

On April 20, 2015, a panel of the Federal Circuit decided In re Tam,11 an appeal from the PTO's refusal to register the trademark "The Slants" for an Asian-American rock and dance band. While the PTO had found the proposed mark disparaging to persons of Asian descent, Mr. Tam claimed that he had deliberately chosen the name in order to "reappropriate the disparaging term" and to defy the stereotype represented by it. The panel held that it was constrained by precedent (McGinley and its progeny) to reject Tam's First Amendment challenge to Section 2(a), but Judge Moore, who was the author of the panel's opinion, published "additional views" in which she suggested that, [i]t is time for this Court to revisit McGinley's holding on the constitutionality of § 2(a) of the Lanham Act."12

The court, sua sponte, granted rehearing en banc and vacated the panel's ruling. On December 22, 2015, the court issued its decision, in which it overruled McGinley's holding that the First Amendment did not apply to trademark registration.13 The court agreed that the mark "The Slants" was disparaging, but held (8 to 3) that Section 2(a) was unconstitutional on its face as a violation of the First Amendment.

By overruling its own longstanding precedents, the Federal Circuit may have made recognition of disparaging trademarks an issue ripe for determination by the Supreme Court and may have indirectly saved the trademarks of the Washington Redskins from cancellation.

The Redskins Litigation

In the meantime, more than two decades of litigation involving challenges to Washington Redskins' trademarks resulted in a decision by the U.S. District Court for the Eastern District of Virginia in which the court upheld the PTO's cancellation of the marks as disparaging under Section 2(a).

A petition to cancel the Redskins' trademarks was filed in 1992, and although the PTO granted the petition and cancelled the marks, the court reversed, based largely on a finding of laches.14 A second petition was filed in 2006, and the Trademark Trials and Appeals Board cancelled the marks in 2014.15 Pro-Football then commenced a lawsuit seeking a de novo review of the PTO's decision under 15 U.S.C. § 1071(b).

On July 8, 2015, the U.S. District Court for the Eastern District of Virginia issued its memorandum opinion and order in Pro-Football, Inc. v. Blackhorse,16 affirming the ruling of the TTAB and ordering the cancellation of the challenged trademarks. The court ruled that Section 2(a) did not violate the First or Fifth Amendment; that there was extensive evidence to establish that the trademarks were disparaging; and that the defense of laches did not bar the petition for cancellation. An appeal from the court's decision is pending.

Tam and Blackhorse: Irreconcilable Differences?

The Tam majority and the District Court in Blackhorse disagreed on virtually every conclusion that might be drawn from the essentially undisputed facts.

Both courts acknowledged that federal trademark registration creates significant legal and competitive advantages—not available at common law— for the registered trademark holder.The Blackhorse decision listed some of them:

  1. constructive notice of the registrant's claim of ownership of the trademark; 
  2. prima facie evidence of the validity of the registration, of the registrant's ownership of the mark, and of his exclusive right to use the mark in commerce as specified in the certificate; 
  3. the possibility that, after five years, registration will become [incontestable] and constitute conclusive evidence of the registrant's right to use the mark; 
  4. the right to request customs officials to bar the importation of goods bearing infringing trademarks; 
  5. the right to institute trademark actions in federal courts without regard to diversity of citizenship or the amount in controversy; and
  6. treble damage actions against infringing trademarks and other remedies.17

The Tam majority offered a similar list.18 But while the Tam court argued that the denial of these benefits imposes an impermissible burden on speech, the Blackhorse court (and the Tam dissenters) asserted that these benefits create a federal subsidy, which the government is free to regulate or withhold. As Judge Dyk stated flatly in his Tam dissent, " That trademark registration is a subsidy is not open to doubt."19

The Blackhorse court cited McGinley for the proposition that Congress is entitled to decide that offensive marks should "not occupy the time, services, and use of funds of the federal government." Judge Moore pointed out in her "additional views" that after McGinley was decided, the PTO became user-funded, and while she conceded that the government expends resources in post-registration enforcement activities that are not covered by PTO user fees, she contended that such expenditures are too attenuated to justify restrictions on registration.20

The Tam majority found that the disparagement restrictions would have a chilling effect on protected speech by imposing unconstitutional conditions on the availability of government benefit.21 In his dissent, Judge Dyk responded: "But that is commonly the effect of the denial of subsidies. […] A chilling effect does not turn a subsidy provision into a regulatory provision, so long as the subsidy is not designed to limit speech outside of the subsidized program. That is not the case here."22

The two courts were equally at odds on the issue of whether the trademark registration process constituted government speech that would be exempt from the First Amendment or whether the restrictions regulated private speech.

The most fundamental disagreement, however, is summarized in the Blackhorse decision:

  • As a threshold matter, throughout the pleadings the parties conflated the legal principles surrounding trademarks with those surrounding trademark registration. . . . [T]he Court is … compelled to highlight what is at issue in this case—trademark registration, not the trademarks themselves. … [T]he TTAB itself pointed out that it is only empowered to cancel the statutory registration of the marks under Section 2(a); it cannot cancel the trademarks themselves. … Thus, regardless of this Court's ruling, PFI can still use the Redskins Marks in commerce.23

The Tam majority, on the other hand, contended that, "Whether a user of an unregistrable, disparaging mark has any enforceable common law rights is at best unclear. …The government's suggestion that Mr. Tam has common-law rights to his mark appears illusionary."24

Context and Intention

These fundamental conflicts are made even more complicated by context.

In McGinley and the other Federal Circuit cases that upheld Section 2(a), the challenged marks were refused registration as "scandalous" because of their sexual or vulgar content, and so they provide little guidance about disparaging marks. Moreover, while the Federal Circuit's impulse to rehear Tam en banc apparently sprang from its desire to revisit McGinley, the Tam majority limited its holding to the disparagement portion of Section 2(a). It left those portions dealing with "immoral" or "scandalous" marks—the only ones actually disallowed in McGinley—for future review.

In Tam, the majority agreed that the challenged mark was disparaging, but believed that it was not simply commercial speech, largely because Mr. Tam chose the mark in order to "reclaim the negative racial stereotype it embodies."25 At least for Judge Dyk, who believed that Section 2(a) was valid for commercial speech but unconstitutional as applied to Mr. Tam, the mark was protected not because of its nature or content, which was admittedly disparaging, but because of Mr. Tam's "clear desire to editorialize on cultural and political subjects."26

Should the difference between commercial speech (subject to an intermediate scrutiny standard) and political speech (subject to strict scrutiny) depend on the identity and subjective intention of the speaker?

Given the apparent importance to the court of the subjective intent of the trademark claimant, it is tempting to wonder whether the court would have been less receptive to the claimant's argument in Tam if the claimant had been a band composed of Caucasian—instead of Asian—men who made themselves up to look stereotypically "Asian" and who called themselves "The Slants" because they believed it would be a good marketing gimmick.

It is equally tempting to wonder whether the court would be more receptive to the claimant's position in Blackhorse if the claimant, instead of being the marketing behemoth of Professional Football, had been a team of Native American football players who called themselves the Redskins in order to turn a disparaging racial stereotype into a badge of honor and defiance.

Should the difference between commercial speech (subject to an intermediate scrutiny standard) and political speech (subject to strict scrutiny) depend on the identity and subjective intention of the speaker? If that is the lesson of Tam, then the Federal Circuit will have provided us with a very difficult standard to apply.


Endnotes

1 15 U.S.C. § 1052(a).

2 "The Trademark Act of 1905 provided specific authority to refuse to register immoral or scandalous marks, …; the USPTO refused to register disparaging marks on those grounds before the Lanham Act of 1946 was enacted, which explicitly incorporated a disparagement proscription, … 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., dissenting, internal citations omitted).

3 660 F.2d 481, 484 (C.C.P.A. 1981).

4Id., 660 F.2d at 484 (internal citations omitted)

5 33 F. 3d 1367, 1374 (Fed. Cir. 1994).

6 334 F.3d 1336, 1343 (Fed. Cir. 2003).

7 702 F.3d 633, 635 (Fed. Cir. 2012).It is interesting that McGinley, Mavesty, Boulevard and Fox all involved trademarks rejected because they were "scandalous" or "immoral," not because they disparaged a person or group.

8 702 F.3d at 634-35 (internal citations omitted).

9 428 F. 3d 559 (5th Cir. 2005).

10 428 F. 3d 559, 578, n. 9.

11 785 F. 3d 567 (Fed. Cir. 2015), reh'g en banc granted, opinion vacated, 600 F. Appx. 775 (Fed. Cir. 2015).

12 785 F.3d at 573 (Moore, J. additional views)

13 In re Tam, 808 F. 3d 1321, 1374 (Fed. Cir. 2015).

14 Pro-Football, Inc. v. Harjo, 565 F.3d 880 (D.C. Cir. 2009).

15 Blackhorse v. Pro-Football, Inc., 111 U.S.P.Q. 2d 1080, 2014 WL 2757516 (T.T.A.B. 2014)

16 Pro-Football, Inc. v. Blackhorse, 2015 U.S. Dist. LEXIS 90091 (E.D. Va. July 8, 2015) ("Blackhorse").

17 Id., [cite] citing Georator Corp. v. United States, 485 F.2d 283, 285 (4th Cir. 1973) (citing 15 U.S.C. § 1051 et seq.), abrogated on other grounds by NCNB Corp. v. United States, 684 F.2d 285 (4th Cir. 1982).

18 In re Tam, 808 F.3d at 1328.

19 In re Tam, 808 F.3d at 1368 (Dyk, J. dissenting).

20 In re Tam, 785 F.3d at 580-81 (Moore, J., additional views)

21 In re Tam, 808 F.3d at 1348-49.

22 In re Tam, 808 F. 3d at 1370 (Dyk, J., dissenting).

23 Blackhorse, 2015 U.S. Dist. LEXIS 90091 at 15-16.In his dissenting opinion in Tam, Judge Lourie agreed with this position: "The lack of a federal registration does not alter the informational function of a trademark: disparaging marks may still be used to identify the source of goods or services… .The denial of federal trademark registration thus does not deprive the mark holder of trademark protection because of the content of its mark; the markholder still has trademark rights under the Act in addition to its common law rights."In re Tam, 808 F.3d at 1375 (Lourie, J. dissenting)

24 In re Tam, 808 F.3d at 1344.

25 In re Tam, 808 F.3d at 1373 (Dyk, J. dissenting in part and concurring in part) "This case exemplifies how marks often have an expressive aspect over and above their commercial-speech aspect.Mr. Tam explicitly selected his mark to create a dialogue on controversial political and social issues."In re Tam, 808 F.3d at 1338.

26 In re Tam, 808 F.3d at 1373 (Dyk, J. dissenting in part and concurring in part).