Supreme Court to review exclusion of disparaging marks from federal trademark registration

On September 29 2016 the Supreme Court granted certiorari in Lee v Tam. In so doing, the Supreme Court agreed to review a decision of the US Court of Appeals for the Federal Circuit which held that the statutory prohibition on disparaging marks from federal trademark registration was unconstitutional.

The trademark application at issue in Lee was for the mark THE SLANTS. The applicant was Simon Shiao Tam, a member of Asian American rock band The Slants. The mark was refused registration under Section 2(a) of the Lanham Act, which prohibits the registration of a mark that consists of “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”. The mark was alleged to be likely to be disparaging to persons of Asian descent. After the Trademark Trial and Appeal Board affirmed the examiner’s rejection of the mark, the applicant appealed to the Federal Circuit. On rehearing en banc, the issue before the Federal Circuit was whether the Lanham Act’s prohibition of disparaging marks burdens private speech in violation of the First Amendment of the Constitution.

The Federal Circuit first found that the statute was subject to strict scrutiny because the regulation was not content or viewpoint neutral. Specifically, the Federal Circuit found that the US Patent and Trademark Office (USPTO) will reject a mark under the statute only when it finds that the mark refers to a group in a negative way. The Federal Circuit did not agree with the USPTO’s position that strict scrutiny did not apply because the statute regulates only commercial speech. Instead, the Federal Circuit held that it is always a mark’s expressive character that is the basis for exclusion. The USPTO also argued that the prohibition does not ban speech because the applicants are still able to use the mark in commerce and may seek protection for the mark under state law. The Federal Circuit held that whether the regulation burdens rather than bans the use of the mark is immaterial. In a concurring opinion, two judges opined that they would also have invalidated the statute on the basis that is unconstitutionally vague under the Fifth Amendment of the Constitution.

The Supreme Court did not indicate the grounds on which it granted the petition for a writ of certiorari. However, the Supreme Court’s decision to take up Lee suggests that it will decide whether Section 2(a) of the Lanham Act is constitutional. If the Federal Circuit decision is upheld, federal trademark registration may be available for marks for which registration was previously precluded.             

Lee is likely to have a substantial impact on a prominent case currently on appeal in the Fourth Circuit involving whether the Washington Redskins American football team may maintain several federal trademark registrations that include the term 'Redskins'.  A decision by the USPTO to cancel those marks under the same statute at issue in Lee was affirmed by a district court in 2015. The mark is alleged to be derogatory to Native Americans.