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Jun 20, 2017

Matal v. Tam: Trademark Disparagement Clause Held Unconstitutional

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Yesterday, the Supreme Court held in an 8–0[1] decision that the disparagement clause in the Trademark statute—which prohibits the registration of trademarks that may “disparage . . . or bring . . . into contemp[t] or disrepute” any “persons, living or dead,” 15 U.S.C. § 1052(a)—violates the Free Speech Clause of the First Amendment.[2] Justice Alito, writing for the majority, explained that the disparagement clause defies “a bedrock First Amendment principle: Speech may not be banned on the ground that it expresses ideas that offend.”[3]

This case arises out of a dance-rock band’s application for federal trademark registration of the band’s name, The Slants. Pursuant to 15 U.S.C. § 1052(a), the PTO refused registration on the ground that it believed the mark to refer to persons of Asian ancestry and to be disparaging of them—even though the band’s purpose in choosing the name was not to disparage, but instead to reclaim the term for people of Asian descent.[4] The United States Court of Appeals for the Federal Circuit (the “CAFC”), in a panel decision, originally affirmed the PTO’s decision,[5] but then revisited the decision en banc and held that the disparagement provision of § 1052(a) is facially invalid under the First Amendment.[6] The Government petitioned for certiorari, and the Supreme Court yesterday affirmed the CAFC’s en banc decision.

In finding the disparagement clause unconstitutional, the Supreme Court rejected the Governments’ following three arguments: (1) trademarks are government speech, not private speech; (2) trademarks are a form of government subsidy; and (3) the constitutionality of the disparagement clause should be tested under a new “government-program” doctrine.[7]

As important as this case is to The Slants, it will likely have an even larger impact on the Washington Redskin’s billion-dollar franchise. In 2014, the PTO’s Trademark Trial and Appeal Board ordered the cancellation, under the disparagement clause, of six of the team’s registrations for various configurations of the word REDSKINS.[8] The team’s appeal, which proceeded on a separate track from this case even though the cases both deal with the constitutionality of the disparagement clause, was stayed in the United States Court of Appeals for the Fourth Circuit during the pendency of this case to preserve judicial resources.[9]

The Supreme Court’s holding in Tam confirms the Redskins’ arguments with respect to the unconstitutionality of the disparagement clause in its case. And while that issue seems case-dispositive from a big-picture perspective, it is conceivable that the team might continue its appeal—subject to mootness—on certain other issues of importance, such as whether the district court erred in finding that the cancellation of the team’s trademark registrations decades after the registrations were granted violates the trademark holder’s procedural due process rights under the Fifth Amendment.[10]

Footnotes

[1] Justice Gorsuch did not participate.
[2] Matal v. Tam, 582 U.S. ___ (2017) (slip op. at 1); Previously captioned Lee v. Tam.
[3] Id. at 3.
[4] In re Tam, 2013 WL 5498164 (T.T.A.B. Sept. 26, 2013), aff’d, 785 F.3d 567 (Fed. Cir. 2015), vacated and remanded en banc, 808 F.3d 1321 (Fed. Cir. 2015).
[5] In re Tam, 785 F.3d 567 (Fed. Cir. 2015), vacated and remanded en banc, 808 F.3d 1321 (Fed. Cir. 2015).
[6] In re Tam, 808 F.3d 1321 (Fed. Cir. 2015).
[7] Tam, 582 U.S. ___ (2017) (slip op. at 12). The Supreme Court also addressed (and rejected) the following periphery argument that Tam raised for the first time in the litigation: the disparagement clause does not reach marks that disparage racial or ethnic groups because the statutory language refers only to “persons” and “persons” includes only natural and juristic persons, not non-juristic entities such as racial and ethnic groups. Id. at 8–9.
[8] Blackhorse v. Pro-Football, Inc., Cancellation No. 92046185 (T.T.A.B. June 18, 2014). The cancellation of the REDSKINS trademarks does not prevent them in any way from continued use of the name, nor does it strip the team of certain common law rights it might have in the marks.
[9] Pro-Football, Inc. v. Blackhorse, Case No. 15-1874, D.E. 121, (4th Cir. Nov. 15, 2016) (order placing case in abeyance pending decision in Tam).
[10] Id., D.E. 20 (4th Cir. Aug. 20, 2015).

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