Lanham Act Provision Prohibiting Federal Trademark Registration for Disparaging Marks is Unconstitutional: Federal Circuit | Practical Law

Lanham Act Provision Prohibiting Federal Trademark Registration for Disparaging Marks is Unconstitutional: Federal Circuit | Practical Law

In In re Tam, the US Court of Appeals for the Federal Circuit, sitting en banc, vacated the Trademark Trial and Appeal Board’s (TTAB) refusal to register the mark THE SLANTS under Section 2(a) of the Lanham Act, and remanded the case to the TTAB for further proceedings, holding that the provision was an unconstitutional violation of the First Amendment.

Lanham Act Provision Prohibiting Federal Trademark Registration for Disparaging Marks is Unconstitutional: Federal Circuit

by Practical Law Intellectual Property & Technology
Published on 23 Dec 2015 • USA (National/Federal)
In In re Tam, the US Court of Appeals for the Federal Circuit, sitting en banc, vacated the Trademark Trial and Appeal Board’s (TTAB) refusal to register the mark THE SLANTS under Section 2(a) of the Lanham Act, and remanded the case to the TTAB for further proceedings, holding that the provision was an unconstitutional violation of the First Amendment.
On December 22, 2015, in In re Tam, the US Court of Appeals for the Federal Circuit, sitting en banc, vacated the Trademark Trial and Appeal Board’s (TTAB) refusal to register the mark THE SLANTS under Section 2(a) of the Lanham Act, and remanded the case to the TTAB for further proceedings ( (Fed. Cir. Dec. 22, 2015)) (15 U.S.C. §1052(a)). The Federal Circuit held that the Section 2(a) bar against registration of disparaging marks is unconstitutional because it violates the First Amendment.
This case arose from a 2010 application filed by Simon Shiao Tam to register the mark THE SLANTS for live performance entertainment by a musical band. The examiner refused registration under Section 2(a) of the Lanham Act finding that the mark consisted of matter that may disparage, bring into contempt, or disrepute persons, institutions, beliefs, or national symbols. The TTAB affirmed the examiner’s refusal. For more information on the TTAB's September 26, 2013 decision, see Legal Update, TTAB Affirms Section 2(a) Refusal to Register Derogatory Term
Subsequently, Tam appealed to the Federal Circuit, and on April 20, 2015, a panel of the Federal Circuit affirmed the TTAB’s decision. However, within a few days of its decision, the Federal Circuit issued an order vacating its panel decision and stating that it would sit en banc to decide whether the disparaging marks registration bar violated the First Amendment. For more information on the Federal Circuit’s April 20, 2015 decision, see Legal Update, Call for New Slant on Disparaging Marks: Federal Circuit.
In its en banc decision, the Federal Circuit, although acknowledging that its decision could result in the wider registration of offensive marks, concluded that Section 2(a)'s disparagement provision is unconstitutional and therefore vacated the TTAB's decision that the mark is unregistrable and remanded the case.
The Federal Circuit concluded that Section 2(a)'s disparagement provision burdens private speech based on government disapproval of the message conveyed and is therefore subject to strict scrutiny. The court also noted that it is undisputed that the provision cannot survive strict scrutiny. Specifically, the Federal Circuit determined that the Section 2(a)'s disparagement provision:
  • Discriminates based on approval of the message and is not content or viewpoint neutral.
  • Regulates the mark's expressive aspects, not its function as commercial speech noting that:
    • trademarks have an expressive aspect over and above their commercial-speech function, which Section 2(a) targets; and
    • Mr. Tam selected his mark to create a dialogue on political and social issues.
The Federal Circuit rejected the government's arguments seeking to avoid strict scrutiny that:
  • Section 2(a) does not prohibit speech noting that although a trademark owner can use its mark without registration, it is widely recognized that federal registration provides significant and financially valuable benefits to markholders and it is not clear whether Mr. Tam retains any common law rights to enforce his trademark.
  • Federal trademark regulation is government speech because trademarks are understood as a source identifier not as a mechanism to convey a government message or carry a government endorsement.
  • Section 2(a) is part of a subsidy program since, among other things, trademark registration is not a program through which the government is seeking to get its message out through funding recipients.
The Federal Circuit also concluded that even if it were to determine that Section 2(a) were a regulation of commercial speech, Section 2(a) would still fail to survive intermediate scrutiny because the government did not present a substantial interest justifying the bar against disparaging marks. The court noted that permitting the government to burden speech it finds offensive is insufficient.
In addition to the majority opinion, several judges filed concurring and dissenting opinions, specifically:
  • Judge O’Malley, joined by Judge Wallach, concurred but argued that Section 2(a) is also vague and therefore unconstitutional under the Fifth Amendment.
  • Judge Dyk, joined in part by Judges Lourie and Reyna, concurred in part and dissented in part, arguing that the disparaging marks provision was unconstitutional as applied to Mr. Tam but that the majority should not have gone beyond the facts of the case to declare the provision unconstitutional on its face as applied to purely commercial speech.
  • Judge Lourie dissented, arguing that:
    • the court should not further degrade civil discourse by overturning Federal Circuit precedent that has upheld the roughly 70 year old Section 2(a) prohibition against the registration of disparaging marks; and
    • the provision is not unconstitutional as violating the First Amendment because, among other things, a refusal by the US Patent and Trademark Office to register a mark is not denial of an applicant’s right of free speech because the applicant may still use the mark.
  • Judge Reyna dissented, arguing that the provision was not unconstitutional because trademarks are commercial speech and only intermediate scrutiny should apply noting that:
    • Section 2(a) advances a substantial government interest in the orderly flow of commerce since bigoted messages may be discriminatory or at least disruptive to commerce; and
    • any minimal value disparaging speech may offer in the marketplace of ideas is diminished when used in commerce.