The ‘SLANTS’, Disparaging Trademarks and the Free Speech Argument: Matal v. Tam (2017)

Introduction:

According to the United States Patent & Trademark Office, a ‘trademark’ is: a word, phrase, symbol, or design, or a combination thereof, that identifies and distinguishes the source of the goods of one party from those of the others. In the United States, trademark law emerged in the mid-1800s, serving the two-fold purpose of: ‘protecting the property and reputation of a mark-holder’, and, ‘protecting the public from deception’.

Discontentment with the Federal Trademark Act, 1905 led to efforts for the legislative overhaul and it was in 1938 that Congressman Fritz Garland Lanham (of Texas) introduced the bill which eventually bore his name, that is, the Lanham Act. Despite the opposition surfaced from the Justice Department which considered ‘trademarks’ monopolistic, and the intervening war years, which delayed the passage of the bill, President Truman signed the bill, metamorphosing it into law on 5th July, 1946, and this law became effective one year thereafter.

One of the star features of the Lanham Act was the creation of a ‘Central Federal Registry for Trademarks’, however, in the United States registration of trademarks is not a requirement for trademark protection, but it is advisable, as it serves the following two purposes: (1) Constructive notice of the registered trademark to the public in general; and, (2) Legal (rebuttable) presumption as regards the validity of the trademark.

Much water has flowed down the bridge since 1946. The commercial world has undergone a sea change and consequently to address these challenges suitable amendments were brought to the Lanham Act, from time to time, by the Congress, in particular to combat trademark counterfeiting and cyber-squatting.

Recently, the United States Supreme Court in the case of, Matal v. Tam, 582 U.S. ___ (2017), was faced with the following issues of relevance: (1) Whether or not the ‘Disparagement Clause’ of the Lanham Act, which prohibits the registration of a trademark which disparages persons (living or dead), institutions, beliefs or national symbols, or bring them into contempt or disrepute, is facially in the teeth of the First Amendment to the United States Constitution?; (2) What is the purpose of the ‘Disparagement Clause’ of the Lanham Act?; (3) Is it wrong to say that the content of a registered trademark is government speech?; (4) Can disparaging trademarks be prohibited under the ‘commercial speech doctrine’?; (5) Will it be correct to state that the ‘Disparagement Clause’ of the Lanham Act is ‘view-point neutral’?  

First Amendment & Disparagement Clause (The Lanham Act):

Facts of the Case: Matal v. Tam:

• In this case, the applicant (Simon Tam), lead singer of a dance-rock group, applied for trademark registration of the term “THE SLANTS” as the name for his dance-rock group.
• The term “THE SLANTS” is derogatory term for individuals of Asian descent. The applicant and other members of his dance-rock group believed that by taking the slur (THE SLANTS) as the name of their dance-rock group, they shall be able to reclaim the term and shall further be able to drain its denigrating force.
• The PTO (Patent and Trademark Office) denied substantial benefits of federal trademark registration to the mark “THE SLANTS”.
• The PTO did so citing the mandate of the Disparagement Clause contained in 15 U.S. Code § 1052 (a).
• The applicant contested the denial of registration vide the administrative appeals process, but the same was of no avail.
• The applicant took the case to the Federal Court. The Federal Circuit (en banc) found the “Disparagement Clause” facially unconstitutional and in the teeth of the Free Speech Clause of the First Amendment.
• The decision of the Federal Circuit (en banc) was affirmed by the United States Supreme Court on 19.06.2017.

Purpose of the First Amendment:

The First Amendment prohibits the Congress and other government entities (and instrumentalities) from abridging the freedom of speech; however, the First Amendment does not say that the Congress and other government entities (or actors) must abridge their own ability to speak freely. The fundamental principle behind the First Amendment is that the government should not punish or suppress speech, based on disapproval of the ideas or perspectives that the speech conveys. The First Amendment guards against laws which are “targeted at specific subject matter”[1], for this is a form of speech suppression known as the “content based discrimination”; this category of content based discrimination includes a sub-type of laws that go further, aiming towards the suppression of “particular views” on a subject, this kind of suppression of free speech is known as the “view-point discrimination”. In the case of, Rosenberger v. Rector and Visitors of Univ. of Va.[2] it was held that, a law found to discriminate based on view-point is notorious form of content based discrimination.

The First Amendment champions the cause that, public expression of ideas should not be prohibited merely because the ideas are themselves offensive to some hearers[3], and secondly, that the government may not prohibit the expression of an idea simply because society finds the idea itself offensive or disagreeable.[4]    

Purpose of the Lanham Act:

The Lanham Act provides national protection to trademarks in order to secure to the owners of the marks the goodwill and reputation of their respective businesses and to protect the ability of the consumers to distinguish among competing producers and/or manufacturers.[5]

The Lanham Act prohibits registration of trademarks which may disparage persons (living or dead), institutions, beliefs, or national symbols, or bring them into contempt, or disrepute. The PTO while deciding whether or not, a trademark is disparaging, is to apply the “Two-Part Test”.

In the “Two-Part Test”, the examiner first considers the likely meaning of the matter in question, taking into account not only the 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 market-place in connection with the goods (or services); thereafter, if that meaning is found to refer to identifiable persons, institutions, beliefs or national symbols, the examiner concerned moves to the second step, asking, whether that meaning may be disparaging to a substantial component of the referenced group. If the examiner finds that a substantial composite (although not necessarily a majority) of the referenced group would find the proposed mark to be disparaging in the context of contemporary attitudes, a prima facie case of “disparagement” is made out, and thereafter the burden shifts on the applicant to prove that the trademark is not disparaging. The fact that an applicant may be a member of the ‘disparaged group’ or has good intentions underlying the use of the disparaging term as trademark does not give any credence to the fact that a substantial composite of the referenced group may find the term as objectionable.[6]

Rationale behind ‘Trademarks’:

In the case of, B & B Hardware, Inc. v. Hargis Industries, Inc.[7], it was held that the principle underlying trademark protection is that, distinctive marks- words, names, symbols and the like, can help distinguish a particular artisan’s goods from those of the others. Further, in the case of, United Drug Co. v. Theodore Rectanus Co.[8], it was observed that, a trademark designates the goods as the product of a particular trader and thereby protect the trader’s goodwill against sale of another’s product as his. In addition, in the case of, Wal-Mart Stores, Inc. v. Samara Brothers, Inc.[9] it was held that, trademarks help consumers to identify goods and services that they wish to purchase, as well as, those which they want to avoid.

Rationale behind ‘Registration of Trademarks’:

Registration of trademarks with the PTO, firstly, serves as a constructive notice of the registrant’s claim apropos the ownership of the mark; secondly, it is a prima facie evidence (rebuttable) of the validity of the registered mark and of the registration of the mark, of the owner’s ownership of the mark, and of the owner’s exclusive right to use the registered mark in commerce on or in connection with the goods (or services) specified in the registration certificate; and thirdly, registration of trademark makes the mark ‘incontestable’ once the mark has been registered for the period of 5 (five) years. Lastly, trademark registration enables the trademark holder to stop the importation into the United States, the articles bearing an infringing mark.

Even if a trademark is not federally registered, it may still be enforceable under the Lanham Act by virtue of, § 43 (a), which creates a ‘federal cause of action’ for trademark infringement. Moreover, unregistered trademarks may also be entitled to protection under other federal statutes such as the Anti-cyber-squatting Consumer Protection Act, 15 U.S. Code § 1125 (d). Once a trademark is registered, then, the PTO is not authorised to remove it from the register unless the registering party moves for cancellation, or, the registration expires, or, the FTC (Federal Trade Commission) initiates proceedings based on certain grounds such as trademark infringement or cyber squatting.

Answering the issues that came for consideration before the United States Supreme Court, the Hon’ble Court held as follows:

(1) The Disparagement Clause of the Lanham Act is not narrowly drawn, for it reaches out to any trademark that disparages any person, group or institution. A restriction on speech must serve a substantial interest and it must be narrowly drawn.[10] Curbing of a speech that expresses an idea that offends, strikes at the heart of the First Amendment. The commercial market as of day is already stocked with goods and commodities that disparage eminent figures and groups, and further, the line between commercial and non-commercial speech is not very clear. The Disparagement Clause of the Lanham Act is too broadly worded, and it can possibly have a paralysing effect on the Free Speech Clause of the First Amendment, thus, it is unconstitutional.

(2) The purpose of the Disparagement Clause of the Lanham Act is to prohibit registration of trademarks which are scandalous and which are derogatory to persons, institutions, beliefs or national symbols, that is to say, the purpose of the Disparagement Clause is, firstly, to prevent the under-represented groups from being bombarded with demeaning messages in commercial advertising, and secondly, to encourage racial tolerance and to protect the privacy and welfare of individuals. However, the difficulty with this clause is that, it fails to appreciate the argument that, whether a particular mark is disparaging or not, is highly subjective an issue and therefore, general rules of acceptance or rejection of a mark as disparaging cannot be coined.[11] 

(3) Trademarks and their precursors have ancient origin, and trademarks were protected ever since the founding of the United States, in common law and in equity, thus, to state that the federal law creates trademarks would be wholly wrong. To observe that: trademarks are in the nature of government speech and not private speech, or, trademarks are in the form of government subsidy, or, constitutionality of Disparagement Clause should be tested on the anvil of ‘government program doctrine’, are meritless arguments, because, firstly, federal registration of trademark does not make it a government speech which enjoys the exemption of the First Amendment scrutiny; secondly, registration of trademark does not constitute approval of the mark[12], moreover, the argument that trademarks are in the form of government subsidy is an unrewarding defence because neither the PTO pays money to the parties seeking registration of the mark, nor, does the government grants trademark to an applicant without charging him the registration fees; and thirdly, registration of trademark is not compulsory however it is desirable, that is to say, even if a trademark is not registered, the federal cause of action for trademark infringement sustains, so also, action against trademark cyber-squatting. A registered trademark is not a government speech and is thus, outside the purview of the First Amendment exemption.

(4) The Disparagement Clause is very broadly worded. What constitutes commercial speech and what amounts to non-commercial speech is not very obvious. Disparaging trademarks cannot be prohibited under the commercial speech doctrine because commercial speech is no exception to the Free Speech Clause of the First Amendment. It was affirmatively held in the case of, Sorrell v. IMS Health Inc.[13], that, the First Amendment requires heightened scrutiny whenever the government creates a regulation of speech because of disagreement with the message it conveys.   

(5) To say that, the “Disparagement Clause” of the Lanham Act is “view-point neutral” because it applies in equal measure to any trademark that demeans or offends regards being had to 15 U.S. Code § 1052 (a), is wholly incorrect, because, a subject which is first defined by content and then regulated or censored by mandating only one sort of comment can never be view-point neutral.

Thus, in Matal v. Tam (2017), the United States Supreme Court upholding the Free Speech Clause of the First Amendment, struck down the Disparagement Clause of the Lanham Act, terming it as ‘unconstitutional’.

[1] Reed v. Town of Gilbert, 576 U.S. __ (2015), https://www.supremecourt.gov/opinions/14pdf/13-502_9olb.pdf, Visited on: 25.06.2017

[2] 515 U.S. 819, 828-829 (1995)

[3] Street v. New York, 394 U.S. 576, 592 (1969)

[4] Texas v. Johnson, 491 U.S. 397, 414 (1989)

[5] Park ‘N Fly, Inc. v. Dollar Park & Fly, Inc., 469 U.S. 189, 198 (1985)

[6] § 1203.03 (b) (i), Tademark Manual of Examining Procedure, April 2017, https://tmep.uspto.gov/RDMS/TMEP/current, Visited on: 25.06.2017

[7] 575 U.S. __ (2015)

[8] 248 U.S. 90, 97 (1918)

[9] 529 U.S. 205, 212 (2000)

[10] Central Hudson Gas & Elect v. Public Ser. Comm’n of N.Y., 447 U.S. 557

[11] Harjo v. Pro-Football Inc., 50 USPQ 2d 1705, 1737

[12] In re Old Glory Condom Corp., 26 USPQ 2d 1216, 1220

[13] 564 U.S. 552, 566 (2011)