Trademark's "Happy Talk Clause" (Matal v. Tam)
Yesterday the US Supreme Court found unconstitutional the Lanham Act’s “happy-talk clause,” i.e., the anti-disparagement clause as it was applied against registrant Simon Tam for his rock band’s mark, “THE SLANTS.” Matal v. Tam, Case No.: 15-1293 (June 19, 2017). The case came amidst significant controversy because it was believed to not only have implication on this lesser known rock band but also to have significance to well-recognized, national sports teams like the Washington Red Skins whose trademark had been recently cancelled by the Office under the same clause. In the Red Skins’ case, Judge Lee out of the ED VA affirmed the Trademark Trial and Appeal Board’s cancellation of their mark and the Fourth Circuit appeal is pending, awaiting this decision.
As a matter of background, Congress included a clause in the trademark code that allows the Trademark Office to deny registration of marks that include disparaging references to “persons, living or dead, institutions, beliefs, or national symbols” 15 USC §1052(a). Specifically marks that “may disparage” or “bring them into contempt, or disrepute” had previously been disallowed. The anti-disparagement clause not only prohibits registration for trademarks that include racial epithets but also prohibits trademarks that down other groups like political groups, capitalists and socialists. Registrant Tam contested the denial of his mark by the Trademark Office arguing that his use of the phrase “THE SLANTS” was not intended to disparage East Asian Americans but rather disempower others from using the term in a harmful or disparaging manner. Accordingly, in Tam’s view the mark did not meet the definition of “disparaging” as defined by the statute because the mark was not used disparagingly nor was it aimed at a singular person.
The Court of Appeals for the Federal Circuit found the anti-disparagement clause unconstitutional under the First Amendment, Free Speech clause. The US Supreme Court affirmed the same in a disjointed opinion. Only eight justices participated in the adjudication of this case and there was a dead-lock on a good number of the issues presented in the case. However, the Court unanimously held that the disparagement clause is unconstitutional under the First Amendment and that the registration of federal trademarks does not constitute “government speech;” thus trademark registration requirements are not entitled to the government-speech exception under the First Amendment.
Justice Alito, writing for the majority (in this sense), articulated that the registration of a federal trademark does not constitute government speech because such registration does not “constitute approval of a mark...” at 15. Justice Alito distinguished a body of government-speech cases by underlining the comparative level of contribution “the government” does or does not have in the speech sought to be regulated. at 16-17. For example, Johanns involved a federal statute financing beef advertisements to promote purchasing. The government’s contribution to the creation of those ads was significant enough to cause the ads to be considered regulatable government speech under the First Amendment. The same grounds distinguished the Summum case (related to public park monuments through which the government was “speaking”) and the recent Walker case (related to Texas specialty license plates).
First, license plates have long been used by the States to convey state messages… Second, license plates “are often closely identified in the public mind” with the State, since they are manufactured and owned by the State, generally designed by the State, and serve as a form of “government ID.”… Third, Texas “maintain[ed] direct control over the messages conveyed on its specialty plates…” As explained above, none of these factors are present in this case.
at 17. Since the Office was not seen to have as intense a level of contribution with respect to registered marks as in these three cases, expression associated with the mark could not be said to be “government speech.”
Three justices joined Justice Alito separately in the following. First, J. Alito indicated that the federal trademark program cannot be characterized as a government subsidy. Under some precedent, where the government subsidizes certain programs it is more so allowed to regulate speech associated with the program. at 18-19 citing Agency for Int’l Development. J. Alito and company wrote that because the PTO does not pay money to those seeking registration, the federal trademark program cannot be seen as a government subsidy program. Id. Second, Justice Alito and his three joining colleagues went on further to indicate how this case was not a government program case either. at 20-22. Under Supreme Court precedent, where the federal government provides a program, it has some allowances in regulating speech associated with the program. Justice Alito distinguished this precedent by noting their similarity to the government subsidy cases where the government creates the “forum” where speech occurs; still, given the anti-disparagement clause’s heavy focus on viewpoint the clause could not square evenly with this precedent either.
Finally, the opinion-of-Alito-plus-three acknowledged that the speech regulated by trademark law is possibly commercial in nature. Justice Alito applied a test of intermediate scrutiny, as government regulations of commercial speech must be “narrowly drawn” to a “substantial interest” under Central Hudson. at 24. Under this test, Justice Alito reasoned that the disparagement clause was not appropriately drawn (or tailored) to meet the identified governmental interests in protecting underrepresented groups, encouraging racial tolerance and privacy, and the orderly flow of commerce mainly because the clause is gapingly broad – equally prohibiting marks that both denigrate and promote discrimination. at 24-26.
Justice Kennedy and three other justices agreed that trademark registration is not government speech but wrote separately to emphasize how the broadly written disparagement clause was carte blanche viewpoint discrimination. at 2-3. This second opinion-of-four further treaded upon acknowledging that trademark registration may very well be commercial speech, however given the vague construction of the trademark clause (as-was), it could not be said to be sufficiently drawn to justify the identified substantial government interests.
So, for now, all prior determined foxes have free reign into the hen house of federal trademarks and we are likely to see the “First Amendment” exercised more heavily in trademark filings absent the anti-disparagement clause. While Matal v. Tam answered many hot button questions, it did not necessarily close the canister of worms on this issue because certain groups continue to challenge trademark-owners that employ their names or images without having anything to do with them personally nor financially. It is possible that a legislative amendment will follow with more narrowly drawn language as to the sorts of disparagement the Trademark Office finds most reprehensible, i.e., to protect a narrower subset of significant governmental interests. Such an amendment might pass scrutiny under the commercial speech test, for example. Accordingly, IP stakeholders will want to monitor trademark registration guidelines as they seem to be continuously evolving.
