Supreme Court Ruling Opens Door to Additional Constitutional Challenges to the Lanham Act

The Supreme Court ruled that the anti-disparagement clause in the Lanham Act violates the Free Speech Clause in the First Amendment.  Matal  v. Tam.  As a result, the United States Patent and Trademark Office may no longer deny registration of a federal trademark application on the ground of disparagement.  Several states, including Massachusetts and New Hampshire, have anti-disparagement trademark provisions that will no longer be enforceable either.

The Supreme Court ruling opens the door to similar constitutional challenges to the related Lanham Act provision precluding registration of marks that consists of or comprises “immoral, deceptive, or scandalous matter.”  That provision is likely to be struck down under the First Amendment and may also be challenged under the void for vagueness doctrine embodied in the due process of the Fifth Amendment to the Constitution.

Prior to Tam, the anti-disparagement clause precluded federal registration of trademarks that might “disparage  . . . or bring [] into contempt or disrepute” any “persons, living or dead”.  The Lanham Act did not define disparage.  The Supreme Court did not define it either and instead assumed a definition that equates with offensive.

At issue in Tam was a registration application by a rock band for the term “THE SLANTS”, the name of their band.  “Slants” is considered by some derogatory of persons of Asian descent.  The applicants did not offer it for a derogatory purpose, but instead sought to use it to eliminate its derogatory impact.  Mr. Tam explained:  “We want to take on these stereotypes that people have about us, like the slanted eyes, and own them.  We’re very proud of being Asian – we’re not going to hide that fact.”

The Tam decision has broad implications.  It means, for instance that the Washington Redskins are likely to prevail in their effort to re-instate their six registrations that were cancelled by the Trademark Trial and Appeal Board in 2014.  While the Redskins are the most high-profile brand to be impacted by the decision, numerous lesser-known brands may seek reconsideration of previous trademark denials.  For instance, before the TAM ruling, the Trademark Trial and Appeal Board had denied registrations in “Budda Beachwear”,  since it was determined to disparage Buddhism, “Heeb”, since it was derogatory for “Hebrew”, and Daman Wayans’ application to register “NIGGA” as part of his entertainment company, since it was offensive to a substantial composite of African-Americans.

However, the PTO’s determination of what qualifies as disparaging has been somewhat unpredictable and inconsistent. For example, the TV show “Queer Eye for the Straight Guy” was granted a trademark, despite the fact that the name can be considered disparaging to homosexuals.

Tam is likely to lead to a flood of trademark applications for trademarks that to some may be similarly offensive.  And some applicants previously denied under the anti-disparagement clause will likely refile their applications that contain all sorts of words, names and symbols that can be considered offensive or otherwise disparaging.

But the Tam decision also raises the potential for trademark applicants to make a First Amendment challenge to the Lanham Act’s prohibition on the registration of trademarks that consists of or comprises “immoral, deceptive, or scandalous matter.”

The statute does not define “scandalous”, but like the restriction against disparaging marks, the courts and the PTO focus on whether a mark is offensive.  For instance, the PTO found the mark BULLSHIT profane and therefore scandalous and not registrable.

The “scandalous” provision was not directly at issue in Tam.  But the Federal Circuit assumed it to be unconstitutional in its own decision in Tam, which the Supreme Court affirmed on appeal.  The Federal Circuit in a footnote in Tam overturned its earlier 1981 decision, In re McGinley, in which it rejected a First Amendment challenge to the “scandalous” provision.  The Supreme Court did not address that footnote in its decision.

If directly challenged under the First Amendment, the scandalous provision will almost surely fall.  Allowing the PTO to determine whether a mark is scandalous is tantamount to allowing it to regulate viewpoint, in violation of the First Amendment, according to Tam.

The PTO may insist that it does not analyze whether a mark is per se scandalous, but instead considers it in the context of the goods or services presented in the application, based upon a substantial composite of the population.  That is not likely to save the provision from a constitutional challenge, since the government, not the people, determines whether a mark is scandalous.

The International Trademark Association filed an amicus brief in Tam, arguing that the anti-disparagement provision should be void for vagueness.  The amicus brief further argued that the inconsistent application of the anti-disparagement provision creates uncertainty concerning the registrability of trademarks, and may have a significant effect on brand owners’ willingness to invest in a brand.

Tam did not advance the void for vagueness argument, and the Supreme Court did not rule on it.  However, the Court did reference the PTO’s acknowledgement that the guidelines for determining whether a mark is scandalous or disparaging “are somewhat vague”.   A separate challenge by a future trademark applicant denied on the ground the mark is “scandalous” may also succeed on the argument the prohibition is void for vagueness.

But Tam does not mean it is open season for the registration of any trademark whose meaning may offend others.  Under the unlawful use doctrine, the PTO will deny registration for trademarks sought in unlawful sales ofr services.  As an example, although the growing and selling of marijuana has become legal in several states, the PTO will not register trademarks for marijuana retailers or for products that contain cannabis, since the commercial sale and recreational use of marijuana is illegal under federal law.



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