Jan 31 | 2017

The Band Who Must Not Be Named: Can Racially Offensive Trademarks Be Federally Protected?

When Simon Tam filed a trademark application for his Portland-based rock ‘n’ roll band, THE SLANTS, little did he know that he would spark an epic trademark battle that would lead him all the way to the U.S. Supreme Court. Tam, who is of Asian-American descent, is a staunch advocate of Asian-American rights. He selected THE SLANTS band name to raise awareness of discrimination against those of Asian descent, by, in part, “taking back” the stereotype of this marginalized group. The U.S. Patent and Trademark Office (“USPTO”), however, rejected Tam’s application on the grounds that the mark is a racial slur that disparages Asian-Americans. After losing an appeal to the USPTO’s Trademark Trial and Appeal Board (“TTAB”), Tam faced an unexpected dilemma: either use THE SLANTS mark without a federal trademark registration (which could make it harder to prevent others from using the same or similar marks), or fight the USPTO’s 70-year-old ban on offensive trademarks. Armed with the First Amendment, Tam took the latter route.

The Slants Rock the Disparagement Clause of the Lanham Act

The crux of The Slants case is Section 2(a) of the Lanham Act of 1946, which precludes registration of marks that may “disparage or falsely suggest a connection with persons, living or dead, institutions, beliefs, or national symbols, or bring them into contempt, or disrepute.” Tam appealed the TTAB ruling to the United States Court of Appeals for the Federal Circuit, where he argued that the disparagement provision of Section 2(a) unconstitutionally burdens free speech by not allowing him to call the band whatever he wants.

In order for the government to regulate a fundamental right, like speech, it must pass a standard known as strict scrutiny. Strict scrutiny requires that the government restriction – whatever it may be – further a compelling government interest through the least restrictive means possible. This means that anytime the government regulates speech, no matter how offensive, it must have a very good reason for it. The strict scrutiny standard is triggered whenever the government restricts speech based on the particular idea that it expresses, which is known as viewpoint discrimination. Tam argued that by denying registration of THE SLANTS mark on the grounds of disparagement, the USPTO impermissibly conditioned the benefits of trademark registration on relinquishing the band’s speech. The USPTO, on the other hand, maintained that denying federal registration does little to restrict the band’s use of THE SLANTS mark. Indeed, the band can still call itself “The Slants,” but it would just not enjoy the benefits of federal registration. The USPTO characterizes the disparagement clause as a “reasonable limit on access to a government program” (i.e., the program being federal registration). Nevertheless, the Federal Circuit ultimately agreed with Tam, and in striking down the disparagement provision, it concluded that this provision creates a “chilling effect” for marks “which the government may deem offensive or disparaging.”
The USPTO appealed the ruling to the Supreme Court, which just heard the case two weeks ago.

Does Trademark 1registration Really Matter?

An oft-overlooked concept in trademark law is that trademark rights subsist from the moment a trademark is used in commerce, absent federal registration at the PTO. These rights are referred to as “common law rights,” and they extend to the geographic regions in which a trademark is used. Practically speaking, the owner of a common law trademark can prevent another party from using a confusingly similar trademark in the same geographic area of use, as long as the senior trademark owner began using the mark before the other party. This means that even without a federal registration for THE SLANTS mark, The Slants can still prevent others from using its name, or a confusingly similar name, for similar services (e.g., a rock band) in the same geographic areas that The Slants can claim rights – possibly throughout the United States. This concept underlies much of the USPTO’s argument.

The Benefits of Trademark Registration

On the flip side, how much of a burden does denying Tam the benefit of registration have on speech? The benefits of trademark registration are central to this case. Even though Tam can still use THE SLANTS mark without securing federal registration, there are crucial benefits afforded to owners of trademark registrations that give them a competitive advantage in the marketplace. By way of example, registration provides nationwide notice of the registrant’s claim of ownership, and it serves as clear evidence that the mark is valid, and that the owner has the exclusive right to use the mark throughout the country. Federal registration would provide The Slants with more tools in its arsenal to fight another band that might call itself The Slants should the band ever end up in court. Importantly, securing a federal registration could help facilitate additional revenue streams via licensing and merchandizing deals.

The Supreme Court Takes the Microphone

On January 18, 2017, Tam took an unlikely stage – on the nation’s highest court. The Supreme Court tackled the issue of whether the disparagement provision of Section 2(a) violates the First Amendment rights of those who want to register offensive marks. During oral arguments, the Justices appeared to agree with Tam’s assertions that the disparagement clause discriminates against the ideas expressed in speech, which in this case involves federal registration of THE SLANTS mark. The Justices were not impressed with the USPTO’s justification for the constitutionality of the disparagement clause. Specifically, the Justices appeared to take issue with the USPTO’s main contention that the clause does not discriminate based on viewpoint. In other words, they saw no First Amendment justification in the USPTO denying marks that convey a negative message, while registering marks that convey a positive message (e.g., THE SLANTS vs. THE PROUD ASIANS). Whether the Supreme Court ultimately decides to side with Tam and hold that Section 2(a) is an unconstitutional burden on speech should hinge on whether the court believes that the objectives of the clause justify the burden on speech. In either case, we should know by Summer.

What do The Slants Have in Common With an 85-year-old National Football League Franchise?

The Washington Redskins have a stake in the outcome of this case too, since the Redskins franchise has been fighting a decades-long battle to maintain its federal trademark rights in several REDSKINS marks, which the USPTO has maintained are disparaging to people of Native American descent. After the TTAB cancelled several of its trademark registrations, the franchise appealed to a federal district court, which agreed with the USPTO’s decision to deny registration of the REDSKINS marks. After appealing the case to the Fourth Circuit Court of Appeals, the Redskins petitioned the Supreme Court to hear its case. But, just like the franchise’s 2016 season, the Redskins did not win review by the Supreme Court. Instead, the Fourth Circuit suspended the case until the Supreme Court rules on The Slants case.

Practical Implications

If the Supreme Court decides to strike down the disparagement provision of the Lanham Act, this would mean that those who want to use a racial stereotype as a trademark would enjoy the benefits of trademark registration, regardless of their intent in adopting the mark. Such a ruling might open the floodgates to registration of highly offensive marks, and it would certainly allow Dan Snyder to get what he has wanted all along – registered rights in the REDSKINS trademarks.

By Connie Boutsikaris, Esq.