Federal Court finds prohibiting registration of disparaging marks violates First Amendment

By Marie-Andrée Weiss

On December 22, 2015, the Federal Circuit held that the disparagement provision of § 2(a) of the Trademark Act violates the First Amendment and ruled in favor of Simon Tam, a musician seeking to register the name of his group, THE SLANTS, as a trademark. The Federal Circuit vacated the holding of the Trademark Trial and Appeal Board (TTAB) which had held that Mr. Tam’s mark was unregistrable. The case is In re Simon ShiaoTam.

The Slants is a rock band composed of Asian-American musicians. Mr. Tam chose the name of his group “to make a statement about racial and cultural issues in [the U.S.] (p.  4) and to “reclaim” and “take ownership” of Asian stereotypes (p. 11). Its repertoire includes songs with lyrics inspired by “childhood slurs and mocking nursery rhymes” (p. 11).

Mr. Tam applied to register THE SLANTS as a trademark in 2011, but the U.S. Trademark and Patent Office (USPTO) denied it because it found that THE SLANTS has “long been a derogatory term directed towards those of Asian descent.” As scandalous, immoral or disparaging trademarks cannot be registered under § 2(a) of the Trademark Act, the USPTO denied the registration.

The Trademark Trial and Appeal Board (TTAB) affirmed. Mr. Tam then appealed to the Court of Appeals for the Federal Circuit. A panel affirmed the TTAB, finding THE SLANTS to be disparaging. But the Federal Court ordered, sua sponte, a rehearing en banc, and the majority  held that § 2(a) is unconstitutional.


The prohibition on registering disparaging trademark

The majority opinion described § 2(a) as “a hodgepodge of restrictions” (p.  7) Indeed, it forbids the registration of trademarks consisting of or comprising “immoral, deceptive, or scandalous matter,” and also prohibits the registration of deceptive marks, such as marks falsely suggesting a connection with a person.

While deceptive speech is not protected by the First Amendment, the prohibition of immoral, deceptive and scandalous matter is a restriction “based on the expressive nature of the content” (p. 7). But such restriction does not serve the two main purposes of trademarks, that is, (1) protecting consumers against confusion as to the origin of the goods or services, and (2) protecting the investment of trademarks holders. Instead, § 2(a) “[o]n its face… is aimed at the suppression of dangerous ideas” (p. 50).

The panel had held that Mr. Tam could not argue that § 2(a) violates the First Amendment, because he is not barred from using the mark without trademark protection, and therefore refusing to register his mark does not implicate the First Amendment. The panel relied on In re McGinley, where the United States Court of Customs and Appeals held that the USPTO’s refusal to register a mark it considered scandalous did not infringe on the appellant’s First Amendment rights, because the “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.”

The government, relying on McGinley, argued that the disparagement provision of § 2(a) does not ban speech, because a disparaging mark may be protected at common law and used in commerce. However, the majority opinion noted that while The Slants may indeed continue to use its chosen name, denying the group the benefit of a federal trademark registration prevents it from benefiting from the “truly significant and financially valuable benefits upon markholders” provided by such registration (p.  28). The court further noted that holders of a disparaging mark are likely not to use in commerce, and even to abandon it: speech is thus suppressed.

The majority opinion noted that McGinley had been decided “at a time when the First Amendment had only recently been applied to commercial speech” and that its analysis “was cursory, without citation to legal authority” (p.  16). That finding had triggered the sua sponte decision to review the case en banc.


Strict scrutiny, and intermediate scrutiny are two different First Amendment standards of review

The majority opinion found that “§ 2(a) regulates expressive speech, not commercial speech, and therefore strict scrutiny is appropriate” (p.  56).

Strict scrutiny is applied by the courts when reviewing a law restricting speech based on its content.

However, commercial speech only warrants an intermediate scrutiny review. The Supreme Court defined commercial speech in Va. State Bd. of Pharmacy v. Va. Citizens Consumer Council, Inc. as the “dissemination of information as to who is producing and selling what product, for what reason, and at what price.” It is protected by the First Amendment, and the constitutionality of a regulation of commercial speech is reviewed under the Central Hudson intermediate scrutiny standard, under which a regulation must be narrowly tailored to directly advance a substantial government interest. Under the Central Hudson test for commercial speech, commercial speech (1) must concern lawful activity and not be misleading; (2) the asserted governmental interest must be substantial; (3) the regulation must directly and materially advance the government’s asserted interest; and (4) must be narrowly tailored to achieve that objective.


The disparagement provision of § 2(a) does not survive strict scrutiny

For the majority opinion, the disparagement provision of § 2(a) discriminates on the basis of the message conveyed by the mark, and thus suppresses viewpoints from the marketplace of ideas (p. 19).

The majority opinion wrote:

“The government cannot refuse to register disparaging marks because it disapproves of the expressive messages conveyed by the marks. It cannot refuse to register marks because it concludes that such marks will be disparaging to others. The government regulation at issue amounts to viewpoint discrimination, and under the strict scrutiny review appropriate for government regulation of message or viewpoint, we conclude that the disparagement proscription of § 2(a) is unconstitutional” (p.  4).

The majority opinion also noted that USPTO has rejected marks referring to a particular group in a negative way, but has allowed marks referring to a group in a positive way to be registered, and gave as example two registered marks referring positively to people of Asian descent, CELEBRASIANS and ASIAN EFFICIENCY (p.  21). This makes § 2(a) facially unconstitutional.

However, the majority opinion reasoned that § 2(a) does not aim at regulating the commercial component of speech. While some of its provisions restrict deceptive speech, such as a mark falsely suggesting a connection with a person or institution, the disparagement provision of § 2(a) prevents registration of speech based on the expressive nature of the content, and thus discriminates on the basis of the content of the message. Therefore, § 2(a) had to satisfy strict scrutiny to be found constitutional (p. 26).


The majority opinion concluded that denying the benefits of federal registration to marks that the government finds disparaging has a chilling effect on speech and violates the First Amendment (p. 38).


The disparagement provision of § 2(a) does not survive under the Central Hudson test

The majority opinion also found that even if a mark would be considered mere commercial speech, § 2(a) would still be considered unconstitutional under the Central Hudson test for commercial speech


Applying this test, the majority opinion reasoned that “[t]here is nothing illegal or misleading about a disparaging trademark like Mr. Tam’s mark.” (p. 57). The government had claimed it had a “compelling interest in fostering racial tolerance” (p. 59), but the majority opinion quoted R.A.V. v. St Paul, where the Supreme Court explained that, while communities have “the responsibility, even the obligation… to confront [virulent notions of racial supremacy] in whatever form they appear” this cannot be achieved by selectively limiting speech (pp. 59-60).

The majority opinion also noted that § 2(a) does not advance the interest of fostering racial tolerance nor is it is narrowly tailored to achieve that objective (p. 60). Since the government could not prove its substantial government interests in the disparagement provision of § 2(a), it could not satisfy the Central Hudson test, and the Federal Circuit held the disparagement provision of § 2(a) unconstitutional under the First Amendment (p. 61).


The rippling effects of this case

The case was remanded to the TTAB. Should the TTAB once more prevent THE SLANTS to be registered as a mark, the case is likely to make its way to the Supreme Court. Meanwhile, the majority decision is likely to allow several disparaging trademarks, which the USPTO had previously refused, to be registered, whether they were chosen to convey a message of hate or to reclaim a hurtful term.

Indeed, in a case currently on appeal in the Fourth Circuit, Pro-Football, Inc., which owns THE REDSKINS trademark for football exhibitions, and five other related trademarks, had unsuccessfully argued on defense in the Eastern District of Virginia that § 2(a) of the Lanham Act violates the First Amendment. Plaintiffs in this case were five Native Americans who successfully claimed the marks disparaged Native Americans.

In the ShiaoTam case, the Federal Circuit “recognize[d] that invalidating [the disparagement provision of § 2(a)] may lead to the wider registration of marks that offend vulnerable communities” (p. 61). If the answer to hate speech is more speech, will the voices of the more vulnerable communities be heard as powerful corporations retain multi-million dollar trademarks?