Part One: The Weighty Legal Questions

Last month, the Supreme Court granted certiorari to review Lee v. Tam, a case about whether the federal government can deny registration to trademarks that disparage individuals or groups.  At issue was the United States Patent and Trademark Office’s denial of trademark registration to a band called The Slants, a name that was intended to reclaim and de-stigmatize an Asian stereotype.  The Slants appealed the denial of its registration application.  The Federal Circuit Court of Appeals, sitting en banc as a full court, held that the denial of a trademark registration on the basis that it was racially insensitive violates the First Amendment.  The Federal Circuit applied strict scrutiny to find that the disparagement clause of the federal trademark registration statute discriminates against speech on the basis of viewpoint and is therefore unconstitutional.

This case will decide many weighty legal questions, such as (1) does the First Amendment even apply to trademark registration, (2) is the denial of a trademark registration benefit treated differently than a direct penalty on speech, and (3) are trademarks purely commercial speech that are not subject to the highest constitutional scrutiny.

The facts of this case are particularly striking, because the trademark for the band The Slants was registered by Simon Shiao Tam to make a statement against racism and stereotyping.  But if the Patent and Trademark Office deems a brand or product disparaging to consumers, the PTO can deny trademark registration.   The outcome of Lee v. Tam will also have implications for the Washington Redskins, whose trademark registration was cancelled as being disparaging to Native Americans, and whose case is pending before the Fourth Circuit.  The government’s position, that “the Constitution does not require Congress to open the federal trademark registration system to racial epithets,” applies to The Slants and the Redskins, despite the difference in how the names may be considered disparaging, and to many others applying for trademark protection.  A separate provision of federal trademark law, which prevents registration of scandalous or immoral matter, might also be vulnerable to invalidation if the disparagement clause is deemed unconstitutional.

This case will decide sweeping issues of government power to regulate speech when the government creates a system that gives procedural and substantive benefits to some speech and not others.  The right not to have one’s speech discriminated against on the basis that someone at the PTO finds the speech disparaging is countered by the government’s interest in disassociating its federal trademark registration system with what many might consider a racial slur.  In Part One of a series on this case, I will provide a broad overview of the legal issues.  Subsequent parts will delve deeper into the doctrine, precedent, and implications of the case.

Does the First Amendment apply at all to trademark registration?

The Federal Circuit’s decision in Lee v. Tam overturned a previous case, In re MicGinley, which held that the refusal to register a trademark does not affect the right to use a trademark or actually suppress speech in violation of the First Amendment.  In Lee v. Tam, the Federal Circuit reversed course and held that the government has no more latitude to constitutionally burden speech indirectly than it has to ban speech outright.  Registration provides important benefits to trademark holders and triggers First Amendment protections.
Trademarks protect “brand names and logos used on goods and services.”  A trademark, by identifying goods or services as being from a particular source, rewards a producer’s investment in its product and prevents consumers from being confused as to the source of a particular product.  When we see a Coca Cola product, or even a Coca Cola tee shirt, we know that the source of that product is actually Coca Cola, with its particular virtues and vices.  Producers of goods protected by trademark can sue alleged trademark infringers for the confusion caused to consumers by the trademark infringement.

The trademark provision at issue in Lee v. Tam, 5 U.S.C. § 1052(a), forbids registration of a trademark if the mark “may disparage or falsely suggest a connection with persons, living or dead, institutions, beliefs, or national symbols, or bring them into contempt, or disrepute.”  Generally speaking, a producer does not need to register a trademark to receive the benefits of trademark laws.  As long as there is consumer confusion based on the infringement of an identifiable brand, a producer can claim trademark rights.  However, the ability to register a trademark provides to a trademark owner a number of important protections, such as a presumption that the trademark is valid in any court proceeding against an alleged trademark infringer, assistance from United States customs in blocking imports that infringe upon a registered trademark, and federal pre-emption of any state trademark/consumer protection laws that may award fewer damages in trademark infringement cases.  Further, once a trademark is registered, others can easily search federal documents to see that the particular mark may not be claimed by others.  Finally, the owner of a registered trademark is allowed nationwide exclusive rights in the trademark, even if the trademark is not used nationwide.

If a producer (like The Slants or Washington’s football team) is not legally allowed to register its trademark, it can still use the mark on any promotional materials.  It is an open question whether the owner of a trademark that cannot be legally registered (because the trademark violates the disparagement clause) can even still sue under the federal Lanhman Act to prevent the mark from being used by others (only registered marks quality for treble damages for willful infringement), but state law consumer confusion statutes would still be available to non-registered trademarks.  Because the substantive ability to sue is not based on the registration of a trademark, the government has argued that registration is a pure government benefit whose denial is less constitutionally suspect.  This argument was rejected by the Federal Circuit.

Does the government have the power to select speech for benefits in a viewpoint-discriminatory way in a system it creates?

Under the First Amendment, the failure to provide a subsidy or benefit is generally treated as the same as attaching a punishment to particular speech — imagine if the ability to call the police were conditioned on whether the caller had views that would be interpreted to disparage a particular group.  Or, more concretely analogous, imagine if the government denied copyright protection (which, admittedly, provides more benefits than mere copyright registration) to a novel because some readers of the novel might find that it contains disparaging words.  Denial of a benefit, in the First Amendment context, is treated the same as attachment of a penalty (direct suppression via criminal law or civil liability), because both have great potential to chill speech.

This principle is different than in other contexts, where the omission/commission distinction is important.  Individuals (and the government) generally have more leeway to avoid acting or giving others a benefit (even it if harms others) than we do in affirmatively acting to penalize others.  To preserve autonomy, we are not generally required to affirmatively act.  I will go to jail for taking someone’s property away, but not for failing to give someone my property, even if that person really needs it.  But because the First Amendment speaks generally of abridging speech, the First Amendment prohibits discrimination on the basis of viewpoint, whether or not this discrimination comes in the form of the denial of a subsidy generally applied to others or to the imposition of a penalty. (If the government sets up a fund that discriminates on some other quality, like artistic merit, that is not considered viewpoint discriminatory in the same constitutionally suspect way.)

Of course, as the government argues in this case, the government is permitted to use its own funding to support its own messages and programs.  Speech that is the government’s own can discriminate on the basis of viewpoint (the government can launch an anti-smoking campaign without having to also advance pro-smoking commercials).  But trademark registration does not affect expression that belongs to or is attributed to the government.  Trademarks are understood to be speech by the trademark holder, despite being protected by federal law.  Unless the Supreme Court is prepared to define government speech extremely broadly in a way that erodes our speech protections as private citizens, then trademarks are clearly private speech.   An overly broad definition of government-associated speech is somewhat of a concern after Walker v. Texas Division, Sons of Confederate Veterans, in which the Court held that a license-plate scheme, where individuals obtain privately made specialty license plates after approval of the slogan by the state of Texas, constituted government speech.  Only one judge on the Federal Circuit, Judge Lourie, was prepared to say that because trademarks bear the imprimatur of the government, they deserve lower constitutional scrutiny.

Does trademark registration regulate only commercial speech?

Judge Reyna, in dissent, would have treated trademarks as commercial speech, subject to intermediate scrutiny, which is more deferential to the government than the strict scrutiny applied generally to content- or viewpoint-based restrictions on speech.  Because the statute targets the expressive elements of the speech, however, the Federal Circuit held that the highest form of constitutional scrutiny should apply.  Under strict scrutiny, the disparagement clause could not survive because it was not narrowly tailored to serve a compelling government interest.

Several other judges would have deemed the speech at issue — The Slants’ trademark — to be political speech, but other trademarks to be purely commercial speech.  These judges would have overturned the denial of The Slants registration, but not, perhaps, the Washington football team’s registration cancellation.

Stay tuned for more on Lee v. Tam as the merits briefs are filed, including more in depth opinions and analysis on the legal issues.

Part Two of this series is now here. Part Three of the series is now here.

(Analysis of the opinion is now here.)