138290667Yesterday, the U.S. Supreme Court ruled in Matal v. Tam, 15-1293 (June 19, 2017), that the First Amendment of the U.S. Constitution prevents the U.S. Patent and Trademark Office (“PTO”) from declining to register trademarks deemed offensive or disparaging.  While the decision concerned the PTO’s rejection of an application to register the name of the Portland-based band The Slants, the decision signals that the Washington Redskins’ controversial quest to maintain its name as a registered mark will succeed.

By way of background, Section 2(a) of the Lanham Act – known as the “disparagement clause” – bars registration of trademarks “which may disparage … persons living or dead, institutions, beliefs, or national symbols, or [may] bring them into contempt, or disrepute.”  15 U.S.C. §1052(a).  The PTO rejected the band’s application to register THE SLANTS word mark under Section 2(a) as disparaging to Asians.  The band members – all of whom are Asian-Americans – had argued that they intended the mark to “reclaim” the phrase and “drain” it of any derogatory meaning.

The band appealed the rejection to the Trademark Trial and Appeal Board – the administrative tribunal that reviews PTO decisions – and later to the U.S. Court of Appeals for the Federal Circuit.  Slip Op. at 7.  The Federal Circuit reversed on the ground that the disparagement clause unconstitutionally restricts private speech.  In re Tam, 808 F.3d 1321 (Fed. Cir. 2015).  The Supreme Court granted certiorari.  The Court’s holding regarding the Disparagement Clause is plain and unmistakable:

“this provision violates the Free Speech Clause of the First Amendment.  It offends a bedrock First Amendment principle:  Speech may not be banned on the ground that it expresses ideas that offend.”  Slip Op. at 1-2.

Appellant PTO argued on appeal that trademarks are “government speech,” and therefore not regulated by the First Amendment.  The Court rejected the argument:  “[t]he Federal Government does not dream up these marks, and it does not edit marks submitted for registration.”  Slip Op. at 14.  To hold otherwise, the Court reasoned, would mean that the federal government is “unashamedly endorsing a vast array of commercial products and services.”  Id. at 14-15.  Put simply, “[t]rademarks are private, not government, speech.”  Id. at 18.

The Court likewise rejected the PTO’s argument that it subsidizes the federal registration of trademarks and thus may regulate trademarks expressing certain viewpoints.  Id. at 18-19.  “The PTO does not pay money to parties seeking registration of a mark.  Quite the contrary is true:  An applicant for registration must pay the PTO a filing fee of $225-600.”  Id. at 19.  Indeed, since 1990, the PTO has been a self-funded agency, supported by patent and trademark filing fees.  See id.

This long-anticipated decision is a solid “win” for the First Amendment.  The Slants welcomed the news on their website.  And it will be welcomed by some other trademark owners – notably the Washington Redskins, owner of six trademark registrations that the PTO cancelled in 2014 under Section 2(a) as disparaging to Native Americans (see our prior blog discussion of that case).  The Redskins case is on appeal to the Fourth Circuit Court of Appeals but stayed pending the Supreme Court’s decision in the Tam case.  Given Matal’s clear guidance, expect the Redskins to prevail in short order.

Will the U.S. trademark registry turn into a lurid X-rated cesspool?  Unlikely.  Among other things, the Matal decision does not invalidate other restrictions on speech that have withstood First Amendment scrutiny, such as obscenity, defamation, or anti-discrimination laws.  Nor does it address the “scandalous matter” prong of Section 2(a) barring registration of “immoral, deceptive, or scandalous matter” – though at least “scandalous” marks should be capable of registration under the decision’s sweep.  Moreover, Section 2(a) has never affected common law trademarks.  Nevertheless, expect that Matal will pave the way for increasing numbers of applications to register expressive and possibly scandalous or offensive trademarks.