Knobbe/Martens: Intellectual Property Law

What the *TM*?!?! The Disparagement Clause has been Bleeped

By Loni Morrow, Vicki Nee and Susan Natland July 24, 2017

Trademark law is an important form of protection for the fashion and beauty industry.  It protects both brand owners and consumers by regulating the registration of brands, or source identifiers, of fashion and beauty products.  Historically, it has been difficult to federally register marks that might be deemed “offensive” to others because the Lanham Act, the federal statute governing trademarks, includes a ban against registering marks that are immoral, scandalous, or disparaging.  The U.S. Patent and Trademark Office (“USPTO”) has been inconsistent in its application of the statute over the years.  For example, the USPTO refused to issue registrations for the marks AWSHIT WORKS, PROTECT THE COOCH!,  and I BANGED BETTY for clothing, but issued registrations for HOME OF THE BIGGER BREAST, DON’T BE A BASTARD, and WINE SLUT for clothing.

On June 19, 2017, the U.S. Supreme Court paved the way for the federal registration of offensive trademarks when it issued its opinion in Matal v. Tam (previously Lee v. Tam).  The Court ruled that Section 2(a) of the Lanham Act, which banned disparaging trademarks, violates the U.S. Constitution.  Specifically, it violates the Free Speech Clause of the First Amendment.   

As a brief recap of the case, Simon Tam filed a trademark application for the mark, THE SLANTS, for his dance-rock band.  “Slants” is a derogatory term for persons of Asian descent and members of the band are Asian-Americans.  Tam chose the name in order to “reclaim” an ethnic slur and erase its denigrating connotation.  The USPTO refused to register the mark based on Section 2(a) of the Lanham Act.  Section 2(a) prohibits the registration of a trademark that “[c]onsists of or comprises 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 case went through several appeals until it ended up at the Supreme Court.  For more background on this case, see our previous post here

As a threshold matter, the Supreme Court determined that trademarks are private speech and not government speech.  Because trademarks are private speech, laws regulating their content are subject to heightened scrutiny, which is a standard of constitutional review.  Under heightened scrutiny, the disparagement clause cannot survive.  For a law regulating the content of speech to survive heightened scrutiny, the regulation must be narrowly drawn to serve a substantial interest.  The Court summarized the disparagement clause’s two asserted interests as “preventing speech expressing ideas that offend” and “protecting the orderly flow of commerce.”  The Court did not find these interests to be “substantial” and did not find the restriction “narrowly drawn” as required by heightened scrutiny.  The Court reasoned that the restriction could be interpreted to ban registration of such phrases as “down with racists” on the ground that they are equally offensive as a mark disparaging a minority group.  The Court elaborated that the disparagement clause is not an “anti-discrimination clause; it is a happy talk clause,” and it is much broader than necessary to serve the asserted interests.  Thus, the Court’s majority opinion ruled that the disparagement clause violates the Free Speech Clause of the First Amendment.

The Justices were unanimous in their rejection of the government’s argument that trademark registrations are government speech and, thus, subject to a lower level of scrutiny.  The Court reasoned that, if it were to accept the government’s position, the government could apply the same ban to the registration of copyrights.  The Justices found that this would be a dangerous extension of the government speech doctrine.

While this decision does not specifically address the ban on “scandalous and immoral” trademarks, the Supreme Court did say that the disparagement provision “offends a bedrock First Amendment principle: Speech may not be banned on the ground that it expresses ideas that offend” (emphasis added).  After Tam was decided, the USPTO issued guidance on disparaging as well as scandalous marks.  Currently, there is a pending Federal Circuit case addressing the “scandalous and immoral” provision of the Lanham Act. While that case is being decided, the USPTO has stated that marks suspended based on the “scandalousness provision” should remain pending until a decision is issued in that case.  Although the path is not yet clear for the registration of all offensive marks, Tam will strongly influence the pending Federal Circuit Case.  Overall, all offensive marks, be they disparaging, scandalous, or immoral, will likely become registrable as long as they meet the other requirements of registrability.  However, applicants should note the First Amendment does not extend to words typically exempted from the definition of “speech,” such as obscenity, libel/defamation, and incitement.  In view of this, Lanham Act prohibitions against registration of such words should continue to be valid.

This case had an immediate impact on the fashion industry.  The same day the case was decided, several offensive trademarks were filed at the USPTO for clothing and shoes such as, [*edited] “COME F*CK ME PUMPS,” “F*CK,” “GOOD SH*T,” “THROW THE WHOLE B*TCH AWAY,” “N*GGA,” “AMERICA, THE BOOBIEFULL,” and “N*GGER PLEASE.”  Coincidence?  Likely not.

This decision also immediately affected another high profile trademark case involving the Washington Redskins football team.  The trademark registration for REDSKINS had been cancelled by the Trademark Trial and Appeal Board as disparaging to a “substantial composite” of Native Americans.  The team took its case to the Eastern District of Virginia, which also found that the mark disparaged Native Americans.  The team then appealed to the 4th Circuit, which suspended the case pending the outcome of the Tam case.  Because the Supreme Court found the disparagement clause unconstitutional, the team should be entitled to its registrations, which include registrations for clothing.

After years of litigation over the prohibition against the registration of disparaging marks by the USPTO, the Supreme Court has spoken: File your trademarks, disparaging or not!  And the table seems to be set for the same result regarding the prohibition against “immoral and scandalous” marks.

Meet the Knobbe Martens Attorneys

Loni Morrow practices in many areas of intellectual property law relating to patents, trademarks, copyrights, and trade secrets, focusing on litigation including pharmaceutical patent...
Vicki Nee's practice focuses on trademark prosecution and enforcement, unfair competition, copyright, right of publicity, false advertising, and litigation. Vicki received her law...
Susan Natland advises on all aspects of domestic and international brand protection and enforcement, advertising law, unfair competition, copyright, and data privacy and security...
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