IP Law Daily Disparagement clause struck down in dispute over THE SLANTS registration
Monday, June 19, 2017

Disparagement clause struck down in dispute over THE SLANTS registration

By Jody Coultas, J.D.

The U.S. Supreme Court has held that a Lanham Act provision against disparaging marks is facially invalid in light of the Free Speech clause of the First Amendment. Justice Alito, writing for the court, noted that trademarks are private, not government, speech. Justices Kennedy, Ginsburg, Sotomayor, and Kagan agreed that the disparagement claims, 15 U. S. C. §1052(a), constituted viewpoint discrimination. The ruling, which affirms a Federal Circuit ruling, clears the way for Simon Shiao Tam and his band The Slants to register the band’s name (Matal v. Tam, June 19, 2017, Alito, S.).

Tam applied for registration of the mark THE SLANTS, in standard character form, for use for "entertainment in the nature of live performances by a musical band." The band chose the term THE SLANTS to "reclaim" and "take ownership" of stereotypes about Asian-Americans. The group "draws inspiration for its lyrics from childhood slurs and mocking nursery rhymes" and named its albums "The Yellow Album" and "Slanted Eyes, Slanted Hearts."

A trademark examining attorney refused to register the mark on the ground that it was likely disparaging to a substantial composite of people of Asian descent, and in a precedential decision, the Trademark Trial and Appeal Board affirmed the refusal. Section 2(a) of the Lanham Act prohibits the USPTO from registering a trademark that consists of matter that may disparage or bring into contempt or disrepute persons, institutions, beliefs, or national symbols. Tam appealed to the Federal Circuit.

On April 20, 2015, a three-judge panel of the Federal Circuit affirmed the Board’s decision. However, one week later the Federal Circuit held a sua sponte hearing en banc, vacated the panel decision, and reinstated the appeal for further briefing on the question of whether the Lanham Act’s bar on registration of disparaging marks violated the First Amendment. On December 22, 2015, in a 9-3 decision, the en banc court held that the government cannot refuse to register disparaging marks because it disapproves of the expressive messages conveyed by the marks or because it finds that such marks would be disparaging to others. The Federal Circuit concluded that under the strict scrutiny review appropriate for government regulation of a message or viewpoint, the disparagement proscription of Section 2(a) was unconstitutional on its face.

The USPTO filed a petition for certiorari asking "whether the disparagement provision in 15 U.S.C. §1052(a) is facially invalid under the Free Speech Clause of the First Amendment."

When deciding whether a trademark is disparaging, the USPTO generally applies a "two-part test." The examiner first considers "the likely meaning of the matter in question, taking into account not only dictionary definitions, but also the relationship of the matter to the other elements in the mark, the nature of the goods or services, and the manner in which the mark is used in the marketplace in connection with the goods or services." If the meaning refers to identifiable persons, institutions, beliefs, or national symbols, the examiner then asks whether that meaning may be disparaging to a substantial part of the group. The fact that an applicant may be a member of that group or has good intentions in using the term does not preclude a finding that the term is disparaging.

Disparagement clause. Tam argued that the disparagement clause does not reach marks that disparage racial or ethnic groups. Specifically, Tam noted that the clause prohibits the registration of marks that disparage "persons," and that the term "persons" "includes only natural and juristic persons," not "non-juristic entities such as racial and ethnic groups." The argument, which was not raised before the USPTO or the Federal Circuit, was refuted by the plain terms of the disparagement clause. The clause covers marks that disparages "persons," which necessarily includes members of that group. Tam’s argument was also rejected in light of Congress’ use of the plural "persons." The clause also applies to marks that disparage "institutions" and "beliefs." Thus, it applies to the members of any group whose members share particular beliefs.

Tam failed to present any evidence in the legislative history showing that Congress meant to adopt his interpretation of the disparagement claims. Also, the alleged practice of the USPTO in the years following the enactment of the disparagement clause in allowing disparaging terms for African Americans and Native Americans was irrelevant.

First Amendment violation. The High Court rejected the government’s argument that trademarks are government speech, not private speech. The government does not create trademarks, nor does it edit marks submitted for registration. An examiner may not reject a mark based on the viewpoint that it appears to express, and does not inquire whether any viewpoint conveyed by a mark is consistent with government policy. "If the federal registration of a trademark makes the mark government speech, the Federal Government is babbling prodigiously and incoherently" and is "unashamedly endorsing a vast array of commercial products and services."

Although the First Amendment forbids the government to regulate speech in ways that favor some viewpoints or ideas, requiring viewpoint-neutrality on government speech would be "paralyzing," according to the court. When a government entity embarks on a course of action, it necessarily takes a particular viewpoint and rejects others. The Free Speech Clause does not require government to maintain viewpoint neutrality when its officers and employees speak about that venture.

Government subsidy. The government’s argument that trademarks are a form of government subsidy was rejected by the court. The Court has previously held that the Government may not deny a benefit to a person on a basis that infringes his constitutionally protected freedom of speech even if he has no entitlement to that benefit. However, the government is not required to subsidize activities that it does not want to endorse. The cases cited by the government, however, all involved cash subsidies, and thus did not apply to this case.

Government-program cases. The Government urged the Court to sustain the disparagement clause under a new doctrine that would apply to "government-program" cases. The argument merges government-speech cases and subsidy cases in an attempt to construct a broader doctrine that can be applied to the registration of trademarks. Those cases occupy a special area of First Amendment case law, and are far removed from the registration of trademarks.

Overly broad. Because the disparagement clause encompassed more than was necessary to serve the interest asserted, the court held that the clause violated the First Amendment. The parties disputed whether trademarks are commercial speech and are thus subject to the relaxed scrutiny outlined in Central Hudson Gas & Elec. Corp. v. Public Serv. Comm’n of N. Y., 447 U. S. 557 (1980). Under Central Hudson, a restriction of speech must serve "a substantial interest," and it must be "narrowly drawn." The Court did not resolve the debate because the disparagement clause could not withstand Central Hudson review. Central Hudson holds that "[t]he regulatory technique may extend only as far as the interest it serves." The disparagement clause failed this requirement. The disparagement clause is not "narrowly drawn" to drive out trademarks that support discrimination, but rather applies to any trademark that disparages any person, group, or institution. "It is not an anti-discrimination clause; it is a happy-talk clause." Commercial speech cannot be cleansed of any expression likely to cause offense, and allowing the suppression of any speech that may lead to political or social "volatility" would endanger free speech.

Justice Kennedy concurrence. Justice Kennedy wrote separately to explain in greater detail why the First Amendment’s protections against viewpoint discrimination apply to the trademark at issue, and submits further that the viewpoint discrimination rationale renders unnecessary any extended treatment of other questions raised by the parties.

Justice Thomas concurrence. Justice Thomas wrote separately, stating his belief that "when the government seeks to restrict truthful speech in order to suppress the ideas it conveys, strict scrutiny is appropriate, whether or not the speech in question may be characterized as ‘commercial.’"

The case is No. 15–1293.

Attorneys: Jeffrey B. Wall, U.S. Department of Justice, for Joseph Matal. John C. Connell (Archer & Greiner, PC) for Simon Shiao Tam.

MainStory: TopStory Trademark

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