[co-author: Steffan Finnegan]

On June 19, 2017, the US Supreme Court in Matal v. Tam unanimously affirmed a decision by the US Court of Appeals for the Federal Circuit that Section 2(a) of the Lanham Act, which precludes “disparaging” trademark registrations, is unconstitutional. In particular, the Court rejected the argument that trademark registration is government speech not subject to First Amendment scrutiny. The decision emphasizes that trademarks are private speech that do not become government speech by virtue of registration with the United States Patent and Trademark Office (USPTO). 

Background

The USPTO provides a federal system for registering trademarks, pursuant to the Lanham Act. Section 2 of that Act lists specific categories of marks that are precluded from registration. Specifically, Section 2(a) provides that a mark 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” is precluded from registration.

In 2011, Simon Shiao Tam, the lead singer of the rock group “The Slants,” sought federal registration of the mark “THE SLANTS.” The USPTO examiner denied his application under Section 2(a), finding that “there is . . . a substantial composite of the referenced group who find the proposed mark to be disparaging in the context of contemporary attitudes.” Likewise, the Trademark Trial and Appeal Board upheld the examiner’s decision and also refused registration. Mr. Tam appealed to the Federal Circuit, arguing that Section 2(a) of the Lanham Act is unconstitutional because it violates the First Amendment. 

On appeal to the Federal Circuit, the Government argued that Section 2(a) did not prevent the use of a disparaging mark, only the registration of a disparaging mark. The Government contended that registration of the mark constituted government speech, and was therefore exempt from First Amendment scrutiny. The Federal Circuit, sitting en banc, disagreed. In re Tam, 808 F.3d 1320 (Fed. Cir. 2015). The majority instead found that Section 2(a) engages in viewpoint-based discrimination, regulates the expressive component of trademarks, and is subject to, but cannot satisfy strict scrutiny.

The US Supreme Court granted the USPTO’s petition for certiorari to answer whether Section 2(a) of the Lanham Act violates the Free Speech Clause of the First Amendment.

The Supreme Court’s Decision

The Supreme Court, in an opinion authored by Justice Samuel Alito, answered in the affirmative, holding that Section 2(a) of the Lanham Act violates the Free Speech Clause of the First Amendment, because “it offends a bedrock First Amendment principle: Speech may not be banned on the ground that it expresses ideas that offend.” The Court rejected all of the Government’s arguments, observing that “the government speech doctrine is important - indeed, essential - it is a doctrine that is susceptible to dangerous misuse. If private speech could be passed off as government speech by simply affixing a government seal of approval, government could silence or muffle the expression of disfavored viewpoints.” 

The Court also noted that because the “Government does not dream up these marks, and it does not edit marks submitted for registration” it is “far-fetched to suggest that the content of a registered mark is government speech.” Finally, the Court did not resolve the issue of whether trademarks are commercial speech, reasoning that Section 2(a) would not withstand the more relaxed scrutiny afforded to commercial speech as outlined in Central Hudson Gas & Elec. Corp. v. Public Serv. Comm’n of N.Y., 447 U.S. 557 (1980).

Consequently, the Court affirmed the Federal Circuit’s decision that Section 2(a) of the Lanham Act is facially unconstitutional under the First Amendment’s Free Speech Clause, and that trademark registration applications are subject to strict scrutiny.

Potential Impact

The Supreme Court’s decision will certainly open the door for mark holders seeking registration of colorful marks, which previously would have been precluded. 

However, a word of caution: just because a mark holder now has the option to register an immoral, deceptive, scandalous, or disparaging mark, it certainly does not mean that it is a wise business or marketing decision to do so. Although courts apply First Amendment strict scrutiny to trademark registration applications, public scrutiny also applies. All registration applications are matters of public record. Depending on the unique aspects of each market, the use and registration of disparaging marks may alienate and offend customers.